The African Development Bank Financing Mechanisms for Renewable

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 AfDBs new Energy Department (ONEC) Renewable Energy financing instruments Overview of projects in the pipeline Contact Details AfDBs new dept - ONEC

Policy Ensuring ac to energy cess and bringing A fr Programs ica on a low-c arbon growth pa th Project New department created in 2010 for greater focus on climate change and related issues

Mission: to spearhead the Banks 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. instruments to meet Africas 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 Africas 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 Africas 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 Africas 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 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 Rmel 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