Role of the African Development Bank in Developing Clean Investments

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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)
Morocco To be presented to Oct. 2009 Trust Fund committee (150m)
South Africa To 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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The AfDB Main Focus Areas in Clean Energy
Investments

• Wind energy
• Hydro Power
• Solar Power (Mainly CSP)
• Co-generation

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Sample of Clean Investments Private Sector
Department
Project name Country Capacity (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 project 2009
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Sample Clean Investments Public Sector
Department
Project name Country Capacity (MW) Applied Technology Financial close (year)
Bujagali Transmission Uganda 250 Hydropower 2007
Beni Matar Solar/Gas Thermal Power Station Morocco 250 MW 30 MW Solar Solar 2007
Kuraimat Solar/Gas Thermal Power Station Egypt 120 to 150 MW) Solar 2008
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Assist clients tap into funding for project
preparation
Fund Max Assistance Amount Sector 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 has 2 lending windows Public and Private
AfDBs lending operations
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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The AfDB adapts its private instruments to meet
investee companys needs

• 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

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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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Contact

• Private Sector Department
• African Development Bank
• BP 323, 1002, Tunis Belvedere, Tunis- Tunisia
• Tel[phone]
• Fax[phone]
• Email private-sector_at_afdb.org
• h.cheikhrouhou_at_afdb.org
• Website www.afdb.org/privatesector

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Thank You