yemenzwork girefe power point presentation final

8/12/2019 Yemenzwork Girefe Power Point Presentation Final

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Access to Finance for Renewable Energy andEnergy Efficient Products in Ethiopia

by Yemenzwork Girefe

Development Bank of EthiopiaManager, Export Credit Guarantee !pe"ial #und

$dmini%tration Bureau

&ovember, '()'

!enegal, Dakar


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*ntrodu"tion

+he finan"ial %e"tor in Ethiopia mainly "on%i%t% of

bank%,

in%uran"e "ompanie%,

mi"rofinan"e in%titution% and

%aving and "redit "ooperative%-

*n )..(/% Ethiopia reformed it% finan"ial %ervi"e indu%try-

+he reform mea%ure% in"luded "omprehen%ive re%tru"turing of government owned finan"ial in%titution% and

opening the %e"tor for lo"al private e0uity parti"ipation


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Cont-

1ut"ome of the reform

13 privately owned banks,

13 private insurance companiesand

31 micro finance institutionsup to 2une '()'-

+he newly e%tabli%hed bank% and in%uran"e "ompanie% are all

owned )((3 by lo"al private %hareholder%-


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#inan"ing Bank% *n Ethiopia

Ethiopia ha% low geographi" and demographi"

penetration of bank bran"he%,

$ll bank head 0uarter% and bran"he% are

"on"entrated in the "apital "ity, $ddi% $baba-

+he number of bank bran"he% went up from .5)

in '()) to )'67 a% at 2une 4(, '()'-

$% a re%ult the ratio of bank bran"he% to totalpopulation de"rea%ed from 86,()9 to 94,955-


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Mi"ro #inan"e *n%titution% in Ethiopia

+he ob:e"tive of the M#*% i% ba%i"ally poverty alleviation

through the provi%ion of %uitable finan"ial %ervi"e% to the

poor who a"tually do not have a""e%% to the finan"ial

%upport %ervi"e% of the formal finan"ial in%titution%-

+o thi% effe"t, the delivery of mi"rofinan"e %ervi"e to the

poor in Ethiopia i% one of the main effe"tive in%trument% of

in%uring

food %e"urity,

redu"ing poverty and

in"rea%ing employment in both urban and rural area%-


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;ural Energy !e"tor #inan"ing in

Ethiopia

+he Ethiopian government i% implementing a

multi dimen%ional and integrated rural ba%ed

development %trategy with the expe"tation of

rapid and e0uitable development of it% entirepopulation-


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Cont-

+he %trategy re"ognized that energy i% one of

the "riti"al input% for enhan"ing

e"onomi" produ"tivity and

building the human "apital through the provi%ion of

"riti"al %ervi"e% in"luding portable water, health and

edu"ation-

Expanding modern energy %ervi"e%, parti"ularlyele"tri"ity, in rural area% will a""elerate the

e"onomi" and %o"ial development pro"e%%-


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Cont-

+he government of Ethiopia ha% formulated a national rural

ele"trifi"ation %trategy where both the publi" ele"tri"ity

%ervi"e "ompany, Ethiopia ele"tri" power Cooperation

and the private non?government %e"tor will be

involved in extending %ervi"e% to the rural population- *mplementation of the publi" %e"tor rural ele"trifi"ation

program i% already in progre%% and hundred% of rural town%

will be the benefi"iarie% of the program in the "oming year%-


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Cont-

+he %e"ond private?lead rural ele"trifi"ation

%trategy fo"u%ed on ele"trifi"ation of rural area% not

to be "overed by Ethiopian Ele"tri" =ower

Cooperation %y%tem expan%ion plan- +hi% %trategy ha% been implemented through ;ural

Ele"trifi"ation #und Bureau, under the

Mini%try of @ater and Energy, the re%our"e% are

available to viable and eligible private and non?government pro:e"t promoter% on a loan ba%i%-


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1ff?Grid ;ural Ele"trifi"ation =rogram

;ural Ele"trifi"ation Managed #und ADBE a% a +ru%t

$gentA

+he rural ele"trifi"ation managed fund i% one of the rural ele"trifi"ation

program admini%tered by the Bank-

+he main benefi"iarie% of thi% program are,

rural "ooperative% and

intere%ted private %e"tor%-

!o far the bank ha% managed to admini%ter 4( rural ele"trifi"ationpro:e"t% in different region% of the "ountry-

1f the total loan advan"ed, ') of them are die%el pro:e"t% and the

remaining . are %olar home %y%tem pro:e"t%-


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Requirements to be beneficiary of Rural

Electrification Fund Credit Line

Renewable Energy Technologies

E0uity "ontribution 63 of the total pro:e"t "o%t

oan amount .63 of the total pro:e"t "o%t

*ntere%t rate 7-63

Gra"e period Maximum of )' month%

oan repayment period Maximum of 7 year%

Collateral

#or non?movable renewable Energy pro:e"t% like !olar = mini?grid and Mi"ro?ydro =ro:e"t%

+he fixed a%%et of the pro:e"t "an %erve a% a "ollateral

#rom movable renewable Energy pro:e"t% like %olar home %y%tem and %olar lantern pro:e"t%

$dditional "ollateral building or other a%%et% e0uivalent to the loan amount or

+hird per%on well known bu%ine%% per%on written guarantee or

#ederal or ;egional Government guarantee


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Cont-

Non-Renewable Energy Technologies

E0uity "ontribution )63

oan amount 863

*ntere%t rate 7-63

Gra"e period Maximum of 9 month


Collateral #ixed a%%et of the pro:e"t a%

"ollateral


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Cont-

Currently 48( %olar home %y%tem pro:e"t%

with a total number of '6,((( benefi"iarie%

are under pipe line and they are expe"ted

to be benefi"iary of the %y%tem at the end

of the "urrent fi%"al year or at the

beginning of the "oming fi%"al year


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Market Development for ;enewable Energy and Energy Effi"ient =rogram ADBE a%

a lead program implementerA

+he Market Development for ;enewable Energy and Energy

Effi"ient =rogram %eek% to "reate a "u%tomer ba%e large

enough to allow %u""e%%ful private %e"tor operation and

"ompetition, whi"h i% in line with the general dire"tion

adopted in the power %e"tor of Ethiopia-

$t the end of the pro:e"t, the private %e"tor% that are now

ba%ed in the "apital "ity will expand their operation% to rural

area% by %etting up lo"al offi"e% re%pon%ible for

marketing,

in%tallation and

maintenan"e of the ;enewable Energy %y%tem% or "omponent%-


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Cont-

+he overall goal of thi% program i% to promote private

%e"tor led development of the renewable energy and

energy effi"ien"y produ"t%-

DBE will be the lead implementing agen"y for thi%program and will work with a network of M#*% and the

$E+=DD to enable %u""e%%ful promotion of renewable

energy produ"t% and %ervi"e% in Ethiopia by addre%%ing

the main bottlene"k%-


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Cont-

$ "redit line u%ing *D$ finan"ing would be e%tabli%hed

within DBE and would be u%ed to inve%t in pro:e"t%

related to promotion of renewable energy and energy

effi"ien"y produ"t%-

DBE will allow two line% of "redit to %upport thi%

"omponent

1ne would be to support the working capital requirement of

project deelopers and

the other to proide on!lending support to "F#s to lend to $mall

%ouseholds-


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;etail lending to private %e"tor enterpri%e% ,

+he retail loan% will be "arried out by "urrent

loaning department% a""ording to the Bank/%

lending poli"ie% and pro"edure% with minor

modifi"ation%- !pe"ial attention will be paid to the development

role of the pro:e"t while at the %ame time trying

to fulfill the %u%tainability re0uirement


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+erm% and "ondition% for ending under ;etail =art

E0uity "ontribution 4(3 of the total pro:e"t "o%t

*ntere%t rate 8-63

oan amount Minimum of !D ',6((

Gra"e period on average from 9 month% to ) year


Collateral #ixed a%%et for movable pro:e"t%


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@hole%ale lending to Mi"ro #inan"e *n%titution% -

1n?ending +erm% and "ondition% from DBE

to Mi"ro #inan"e *n%titution%

*ntere%t rate 93

oan amount ba%ed on their finan"ial %trength

Gra"e period maximum of ' year%

oan repayment period maximum of )( year%

DBE will bear the full ri%k of the loan% to M#*%


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1n?ending +erm% and Condition% from M#*% to final Benefi"iarie%

M#*% will be free to %et their own on lending rate% on the ba%i%

of market "ondition% and without intere%t rate "ap%-

+he M#*% will bear the full ri%k of the loan% to the borrower%

*ntere%t rate free to %et by M#*%

oan amount Maximum of !D ',6(( for individual

Gra"e period &o gra"e period i% re0uired



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!olar Mobile Charger for ;ural

Community


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!olar ome !y%tem for the =oor of the

=oore%t


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;ural ealth =o%t one of the benefi"iary

of ;E# =ro:e"t


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Die%el Generator for !mall ;ural Group%


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=artial view of Ele"trified ;ural illage%


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!olar Cooker Demon%tration


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!olar ome !y%tem for ighting +


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!olar ome !y%tem


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Con"lu%ion

$""e%% to finan"e for rural hou%ehold% that have

moderate to high "a%h in"ome% but little pro%pe"t of

obtaining ele"tri"ity %ervi"e from the grid with affordable

and reliable renewable ele"tri"ity %upply i% a "orner

%tone- +hu% it help%

to "reate an enabling environment "ondu"tive to inve%tment in

renewable energy

to promote private %e"tor market penetration in rural area% and

to "reate rural delivery me"hani%m% through a parti"ipatory

approa"h


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Development Bank of Ethiopia

+$&F Y1

2anuary '()'

yemenzwork girefe power point presentation final

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