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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)

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 nonlending 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.
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
Component
Project Preparation
for AfDB
Support to SMEs in
RE/EE
Objective
Make potential RE
generation/distribution
projects bankable by
offsetting proj. prep costs
Leverage investment in
RE/EE through PSD,
particularly in SMEs
Instruments
Grants (both Bank-executed
and sponsor-executed)
Equity investment and
technical assistance
Management
In-house at AfDB w/
support of long term
consultants (2)
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
1860
Identified but excl. Morocco and
South Africa
Wind
921
CSP projects in pipeline
Country
No. of
Projects
Location
Capacity
(MW)
Est. cost
(US$ million)
CTF
Contribution
(US$ million)
Algeria
3
Megahir
Naama
Hassi R’mel II
80
70
70
322
285
285
58
51
51
Egypt
2
Kom Ombo
Marsa Alam[1]
70
30
370
270
51
44
Jordan
2
Maan Province
Aqaba-Qatrana
transmission
100
418
410
72
40
Morocco
3
Tan Tan[2]
Ain Beni Mathar
Ouarzazate
50
125
100
240
525
440
35
90
72
Tunisia
3
IPP-CSP Project
ELMED-CSP
Tunisia-Italy
transmission
100
100+
450
450
1140
73
73
40
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.
Contact Details
Richard Claudet
[email protected]
Mafalda Duarte
[email protected]
AfDB Web site: www.afdb.org
Thank you