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Role of the African Development Bank in Developing Clean Investments
Mrs. Hela Cheikhrouhou – Manager Infrastructure Finance, Private Sector Operations, AfDB
CSP Workshop – Tunis , October 2009
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Clean Investments to be favored in African Countries if economically sustainable
• African Countries are lagging behind in access to electricity and electricity consumption per capita; annual growth in installed capacity is relatively high in some countries to help bridge the gap
• Countries present significant potential for renewable energies
• Africa Region is among most vulnerable to climate change
• AfDB thus Adopted « Clean Energy Investment Framework » and « Climate Risk Mitigation Policy », clearly favoring cleaner & environmentally friendlier technologies if they are economically viable to Regional Member Countries
• Some technologies, like CSP, are too expensive to be considered unless substantial soft financing could be mobilized
• Part of the solution to lower the cost of CSP could be the setup of local factories for some of the components. Such JVs between international players and local investors would also yield skilled jobs and growth. AfDB stands ready to support those initiatives.
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Involvement in The CTF and Preparation of Investment Plans
Jointly with WBG, assist eligible RMCs to identify and present projects that are eligible for CTF funding Contribute to the preparation of Investment Plans in collaboration with WBG – Such as investment Plan for :
Country/IP Status
Egypt Approved ($300m)
MoroccoTo be presented to Oct. 2009 Trust Fund committee ($150m)
South AfricaTo be presented to Oct. 2009 Trust Fund committee ($500m)
Nigeria IP under preparation
MENA CSP IP under preparation
Once IP is approved, for projects where AfDB is designated to support implementation, the team works closely with the Government or private sponsor to prepare and appraise the CTF project and parallel loan from AfDB
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• Wind energy • Hydro Power• Solar Power (Mainly CSP)• Co-generation
The AfDB Main Focus Areas in Clean Energy Investments
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Project name CountryCapacity
(MW)Applied Technology
Financial close (year)
Water supply Mauritania NA Solar Pasteuriser 2006
Bujagali Uganda 250 Hydropower 2007
Sahanivotry Madagascar 15 Hydropower 2008
Buseruka Uganda 10 Hydropower 2008-2009
Evolution One Clean Fund
South Africa 250+ Clean investment
Private equity fund
2009
Agri Business Morocco NA Agro-industrial
project2009
Sample of Clean Investments : Private Sector Department
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Project name CountryCapacity
(MW)Applied Technology
Financial close (year)
• Bujagali Transmission
Uganda 250 Hydropower 2007
• Beni Matar Solar/Gas Thermal Power Station
Morocco250 MW 30
MW Solar
Solar 2007
• Kuraimat Solar/Gas Thermal Power Station
Egypt120 to 150
MW)Solar 2008
Sample Clean Investments : Public Sector Department
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Assist clients tap into funding for project preparation
FundMax Assistance
AmountSector Beneficiary
• Seed Capital Assistance Facility (SCAF)
1 million US$Clean
investment Fund Manager
• Sustainable energy Initiative (SEI)
2 million US$ Clean energy
Sponsors in Selected African countries
• Small hydro program
2 million US$ Small hydro Tea factories
east and South Africa
• Cogeneration 2 million US$ Cogeneration Sugar factories
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AfDB’s lending operations
AfDB has 2 lending windows: Public and Private
Public window
Governments or state owned enterprises
Sovereign
Concessionary terms
Private window
- Privately owned enterprises - “Financially strong”
government owned enterprises
Non sovereign
Commercial terms
Recipient
Guarantee
Financial terms
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• Senior Debt – tenor and currency adapted to project needs
• Guarantees – partial risk, partial credit
• Subordinated Debt
• Equity – direct, or indirect (equity funds)
• Technical Assistance – grants for studies, capacity building
• Assistance to benefit from Carbon Credits- eligible projects
The AfDB adapts its private instruments
to meet investee company’s needs
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In summary...
• Cleaner technologies are to be favoured in African Countries, if made economically sustainable for them, which may require substantial soft financing resources e.g. for developing technologies like CSP.
• AfDB is partnering with WBG to support eligible regional member countries in their applications to the Clean Technology Fund. The MENA CSP IP is ambitious and requires additional donor support in order to be successful.
• AfDB stands ready to mobilize its public and private financing instruments to assist governments and entrepreneurs in African Countries, to optimize the implementation of viable clean investments.
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Private Sector Department
African Development Bank
BP 323, 1002, Tunis Belvedere, Tunis- Tunisia
Tel:+216 7110 2140
Fax:+216 71 834 178
Email: [email protected]
Website: www.afdb.org/privatesector
Contact
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Thank You
