the african development bank financing mechanisms for renewable energy
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The African Development Bank Financing Mechanisms for Renewable Energy. Lamin M Drammeh Private Sector Investment Officer Senegal Regional Office. Wednesday, October 20, 2010 ECREEE Regional Forium on ESEI, Dakar, Senegal. Outline. AfDB’s new Energy Department (ONEC) - PowerPoint PPT PresentationTRANSCRIPT
The African Development Bank
Financing Mechanisms for Renewable Energy
Lamin M Drammeh Private Sector Investment Officer
Senegal Regional Office
Wednesday, October 20, 2010ECREEE Regional Forium on ESEI, Dakar, Senegal
Outline
AfDB’s new Energy Department (ONEC) Renewable Energy financing instruments Overview of projects in the pipeline Contact Details
AfDB’s new dept - ONEC
New department created in 2010 for greater focus on climate change and related issues
Mission: to spearhead the Bank’s lending and non-lending operations in the areas of energy and environment and climate change mitigation and adaptation
Addresses climate change and environmental issues by incorporating them into Bank Group supported operations.
Policy
Programs
Project
Ensuring access to energy and bringing Africa on a low-carbon growth path
Optimizing financing instruments to meet Africa’s energy needs
Senior Debt: tenor and currency adapted to project needs; debt arranging capacity:
African Financing Partnership: DFI co-financing platform
A-B Syndication Program: leveraging the AfDB Preferred Creditor Status
Guarantees: partial risk, partial credit
Subordinated Debt
Equity: direct, or indirect (equity funds)
Technical Assistance, incl. for carbon credits
Sovereign loans: Concessional, Non-concessional
Climate Finance
Climate change financing AfDB has set up important mechanisms:
Clean Energy Investment Framework ClimDev-Africa Special Fund Africa Carbon support Project Seed Capital Assistance Fund (SCAF)
Leveraging additional funds through: Climate Investment Funds (CTF and SCF) Global Environment Facility (GEF) Scaling up Renewable Energy Program (SREP) Financing Energy Services for Small-Scale
Energy Users (FINESSE)
Supporting Africa’s access to CIF Clean Technology Fund
Pledges of around US$4.7 billion for 15 countries selected based on current carbon footprint and carbon growth path. US$1.9 billion to be allocated to 6 African countries.
Since 2008, WB and AfDB joint missions to African countries, and workshops as needed, led to preparation and submission of Investment Plans.
Summary of the Investment Plans for African Countries prepared jointly by WB and AfDB
Supporting Africa’s access to CIF The Strategic Climate Fund
The Pilot Program for Climate Resilience USD 730 million for 9 countries and 2 regional programs
Pilot countries in Africa: Mozambique, Niger and Zambia
Strategic Programs for Climate Resilience under preparation which will include projects to be implemented by the WBG and AfDB.
The Scaling Up Renewable Energy Program in Low Income Countries
USD 300 million for 6 countries
Pilot countries in Africa: Ethiopia, Kenya and Mali
No official work has started
Supporting Africa’s access to carbon markets Africa Carbon Support Project
Goal: assist clients in regional member countries to access carbon finance that will improve the commercial feasibility of their investment projects
Purpose: capacity building program for host country government agencies; development of appropriate project preparation documentations (methodologies)
Beneficiaries: private sector investors, CDM community as a whole.
Budget of USD 1.8 Million for 2 years
Financing instruments under development ClimDev Africa
Goal: Contribute to sustainable development by implementing climate-resilient development programs that mainstream climate change information into development planning at all levels in Africa
Purpose: To strengthen the institutional capacities of national and sub regional bodies to make and implement climate-sensitive policy effectively
Jointly implemented by AfDB, UNECA and the AU Commission
Initial budget of USD 135 Million
Financing instruments under development
Sustainable Energy Fund for Africa
ComponentObjective
Instruments
Management
Project Preparation for AfDB
Make potential RE generation/distribution projects bankable by offsetting proj. prep costs
Grants (both Bank-executed and sponsor-executed)
In-house at AfDB w/ support of long term consultants (2)
Support to SMEs in RE/EE
Leverage investment in RE/EE through PSD, particularly in SMEs
Equity investment and technical assistance
Outsourced to Fund Manager (PE-style)
Financing instruments under development
Identified clean energy investments
Technology Capacity Investment Comments
MW KUS$
Biofuel NA 242 A few project on pipeline
Cogen 410 649 Identified by the Cogen program
Geothermal 600 1360 Studies are still to be done
Hydro 283 385 Includes small hydro only
Solar (CSP) 700 2.560 Identified but excl. MENA program
Wind 921 1860Identified but excl. Morocco and South Africa
CSP projects in pipelineCountry No. of
ProjectsLocation Capacity (MW) Est. cost
(US$ million)CTF
Contribution (US$ million)
Algeria 3 MegahirNaama
Hassi R’mel II
807070
322285285
585151
Egypt 2 Kom OmboMarsa Alam[1]
7030
370270
5144
Jordan 2 Maan ProvinceAqaba-Qatrana transmission
100 418410
7240
Morocco 3 Tan Tan[2]
Ain Beni MatharOuarzazate
50125100
240525440
359072
Tunisia 3 IPP-CSP ProjectELMED-CSPTunisia-Italy
transmission
100100+
450450
1140
737340
Total 13 ~900 MW 5,604 750
[1] This is a project with 8 hr storage so the size of the solar field will be equivalent to a 60 MW project. [2] This is a CSP-desalination project
Solar Thermal Power Station Morocco This plant combines
solar and thermal power.
It will produce up to 2000 MW of electricity with an annual saving of one million tons of oil.
Thank you