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The African Development Bank Financing Mechanisms for Renewable Energy

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)

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The African Development Bank Financing Mechanisms for Renewable Energy

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  1. 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

  2. Outline • AfDB’s new Energy Department (ONEC) • Renewable Energy financing instruments • Overview of projects in the pipeline • Contact Details

  3. 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 Ensuring access to energy and bringing Africa on a low-carbon growth path Programs Project

  4. 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

  5. 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)

  6. 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

  7. 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

  8. 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

  9. 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

  10. Financing instruments under development

  11. Financing instruments under development

  12. Identified clean energy investments

  13. CSP projects in pipeline [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

  14. 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.

  15. Contact DetailsRichard Claudetr.claudet@afdb.orgMafalda Duartem.duarte@afdb.orgAfDB Web site: www.afdb.org

  16. Thank you

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