Dec 01, 2016 – SDG Knowledge Hub
The month of November was filled with sustainable energy financing news out of Africa. This Update recaps the African finance initiatives announced concurrently with COP 22, along with various other funding news from around the world and a number of go-to renewable energy finance resources.
African Highlights
Africa has a vision for its renewable energy growth. Launched last year at COP 21 and with a focus on providing clean, safe and affordable energy access on the continent, the Africa Renewable Energy Initiative (AREI) aims to realize 10 gigawatts (GW) of new renewable capacity by 2020 and mobilize the potential to generate 300 GW by 2030. This year, on the eve of COP 22, the Government of France put forward a €6 million grant for the implementation of AREI. In addition, the continent-wide pool of financing known as the Sustainable Energy Fund for Africa (SEFA) received a US$11 million boost from the US Agency for International Development (USAID) Power Africa initiative. The funding, which is the second tranche of a US$20 million commitment, was presented in a signing ceremony at COP 22.
In addition to funding announcements, COP 22 witnessed a number of events shedding light on the state of sustainable energy finance. The African Development Bank (AfDB), which hosts both the AREI Delivery Unit and SEFA, organized an event with the World Bank’s Climate Investment Funds (CIF) on how public and private financing have shaped the ongoing renewable energy transformation in Africa, highlighting how public-private partnerships can reduce risk and mobilize the multi-million dollar investments required for renewable energy projects. A good example of AfDB’s interaction with the private sector came as its Board of Directors approved a US$10 million equity investment in the Technology and Innovation in Developing Economies (TIDE) Fund I. TIDE will invest in new technologies and new companies, including those active in renewables and with innovative business models to produce, finance, and distribute solar energy solutions, in line with the AfDB High 5 priority of ‘Light up and power Africa.’ [AfDB Press Release on AREI] [AfDB Press Release on SEFA] [AfDB Press Release on COP 22 Event] [AfDB Press Release on TIDE]
During EU Energy Day at COP 22, and for the broader North African region, EBRD and the Union for the Mediterranean (UfM) launched a €227.5 million private renewable energy framework for North Africa and the Middle East, designed to develop private renewable energy markets.
In addition to the sweeping pan-African announcements, many regional and national initiatives in Africa were also approved for funding in November. The country host of COP 22, Morocco, is home to the NOORo Concentrated Solar Power (CSP) Complex, which just garnered a US$20 million equity investment from the World Bank’s International Finance Corporation (IFC). In addition, Banque Centrale Populaire (BCP) will be able to on-lend to Moroccan commercial and industrial enterprises for energy efficiency improvements, thanks to a €35 million Morocco Sustainable Energy Financing Facility (MorSEFF) loan from the European Bank for Reconstruction and Development (EBRD), the Agence Française de Développement (AFD) and the European Investment Bank (EIB). Furthermore, EIB and the Dutch development bank (FMO) announced at COP 22 a facility for Banque Marocaine du Commerce Extérieur (BMCE) to support solid waste management practices, which, among other things, are expected to increase energy generation from landfill gas. [IFC Press Release] [EBRD Press Release] [EIB Press Release]
During EU Energy Day at COP 22, and for the broader North African region, EBRD and the Union for the Mediterranean (UfM) launched a €227.5 million private renewable energy framework for North Africa and the Middle East, designed to develop private renewable energy markets. The first project under the Southern and Eastern Mediterranean (SEMED) Private Renewable Energy Framework (SPREF) will be the Khalladi windfarm near Tangiers, Morocco. EIB also confirmed its contribution of an additional €25 million to the Green for Growth Fund, to support energy efficiency and renewables across North Africa, in Morocco, Egypt and Tunisia, as well as Lebanon, Jordan and Palestine. A third COP 22 announcement for the Middle East and North Africa (MENA) was related to EIB’s Catalyst MENA Clean Energy Fund, which highlighted its first projects as five solar plants for the telecommunications company Orange in Jordan. The Fund aims to expand to Tunisia, Morocco and Egypt in the future.