green africa power unfccc regional workshop on nationally appropriate mitigation actions for africa...
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Green Africa PowerUNFCCC Regional Workshop on Nationally Appropriate
Mitigation Actions for AfricaKigali, Rwanda
17–19 August 2015
Renewable Energy Financing in Africa
Renewable Energy Project Finance Model
• Debt -by DFI(IFC/PROPARCO/DEG/FMO/OPIC, etc) = (50% - 85%)• Debt -by Banks(Standard Bank/RMB/Barclays etc) = (50% - 85%)• Mezzanine financing(GAP/FMO/DEG) = (5% - 15%)• Equity(Developers such as Scatec solar/BioTherm etc) = (15% - 50%)
Renewable Energy Financing in Africa
Developer Scatec Financing Volume
USD135m
Debt Providers
Standard Bank Group Equity Investors
Norfund / Scatec Solar AS / Standard Bank GroupLtd. / Old Mutual Life Assurance Company Ltd. /Simacel
Legal Advisors
Trinity International LLP / Norton RoseFulbright / DLA Piper LLP / White & Case LLP
ProjectEquipment/ServicesProviders
SMA Solar Technology AG
Case Study in SA: Linde Solar PV Farm - 36.8MW
Source: Clean Energy Platform
Renewable Energy Financing Options
Organization
Technical Assistance/Grant
Equity Capital Mezzanine
Long term loan
Short term loan
Risk Management/Guarantees
DEG X X X X XFMO Entrepreneurial Bank (IDF and AEF) X X X X X XKfW & Partners (SA & Tunisia only) XGlobal Energy Effi ciency and Renewable Energy Fund (GEEREF) X XInternational Climate Fund (UK) X X XGlobal Climate Partnership Fund (SA & Tunisia) X X XIRENA / Abu Dhabi Fund for Development (ADFD) XAfrican Carbon Asset Development Facility (ACAD) X X XClimate and Development Knowledge Network XClimate Finance Innovation Facility (CFIF) X XClimate Technology Initiative (CTI) Private Financing Advisory Network (PFAN) X XNorwegian Investment Fund for Developing Countries (Norfund) X XInteract Climate Change Facility (ICCF) XEnergy and Environment Partnership (EEP) XEIB Climate Change Technical Assistance Facility X XIFC Partial Credit Guarantees X X XIDB's Infrastructure Fund (InfraFund) XIFC Risk Sharing Facility XGAP X
Current StatusGAP formed April 2013.Part of the Private Infrastructure Development Group (PIDG)Funded by UK Government £95m. Funding agreement signed October 2014 & Norwegian government £26m (NOK 300m) signed December 2014Management Board appointed.London based EISER Infrastructure LLP appointed Investment Manager July 2014 supported by Camco Clean Energy plc who have operations in London and several African locations.EISER & Camco are meeting developers to set up a pipeline of projects that need some GAP support to become viable.
Private Infrastructure Development Group• DevCo – managed by WB/IFC advising governments on structuring transactions to
facilitate private sector participation in Infra..• Guarantco – Provides guarantees to lenders to support local currency finance for
projects• ICF-DP – Direct financing for projects in emerging economies• Infraco Africa – Early stage infrastructure project development fund• Infraco Asia• Technical Assistance Facility – Assist other companies in capacity building• The Emerging Africa Infrastructure Fund – PPP offering long term debt and Mezz
debt for infrastructure• GAP
GAP’s Mission• Access to Reliable Electric Power is seen by many as an essential
cornerstone of economic and social development including the enhancement of status of women and girls.
• Sustainable growth through the use of renewable technology brings an added benefit by reducing the effects of climate change.
• GAP will work with private sector developers to help them to bring forward new projects in this field.
• GAP will work with host governments to identify and overcome road blocks that are preventing the start up of new renewable power generation projects.
• GAP will encourage acceleration of new project ideas by measuring success and publicising the results of its activities to as wide an audience as possible.
GAP’s Investment PolicyTotal Funding available currently £121m - to cover investment and operating costs.
• UK Department For International Development (DFID) £70m• UK Department for Energy & Climate Change (DECC) £25m• Norwegian Ministry of Foreign Affairs (MFA) £26m (NOK 300m)
Targeting Private Sector Renewable Energy On Grid Power Generation, Investment in at least three DAC 1,2 and 3 countries in Sub Sahara Africa ( minimum 75% DAC1 & 2).At least three types of renewable technologies (wind, solar, hydro, geo-thermal, biomass, waste to energy)Investment via Mezzanine (Quasi Equity) Loans or Contingent Lines of Credit.Maximum Investment by GAP 20% of Capital Costs.Private Sector must invest at least twice the GAP Investment over the portfolio.GAP loans will be long term (typically 10+ years up to 20 years if supported by an appropriate PPA) and with commercial interest rates usually in the range of 10-12% pa.Investment Commitment Period 2015-2017 - First Investment targeted Q3 2015.
How GAP worksGAP will consider approaches from developers who have projects that fit the GAP mandate.Developers can contact GAP via the website :-www.greeenafricapower.comProjects will be reviewed initially by the Investment Manager’s Team.Final approval rests with the GAP Management Board.All investments held in the name of GAP.
Funding for Future DevelopmentGAP hopes to have committed the full value of its current funding by end 2017 with all funds invested by 2018. Limitations on the number of projects that can be financed would be a maximum of 5 per year.GAP will receive income from its loan portfolio but this will only cover at most one addition project per year from 2018 onwards.GAP can “recycle” proceeds from loan repayments or refinancing of projects but this unlikely to occur significantly before 2020.
GAP Management Board
Jim Cohen – Chairman (based UK)James Neal (based UK)Peter Bird (based Singapore)Godfrey Mwindaare (based Ghana)
Supported by Peter Hutchinson – Executive DirectorBased in London(Contact [email protected])
EISER Infrastructure LLPLondon based fund management group specialising in Infrastructure InvestmentOpened office in Jo’burg late 2014 ( 2 staff full time on GAP mandate)Participation in circa £3bn of Infrastructure InvestmentContact Vivian Nicoli ([email protected])
Camco Clean Energy plcLondon AIM listed company operating in the renewable energy sectorOffices in London, US, RSA (co-located with EISER), Kenya, Tanzania & Togo.Also opening an office in Ghana.Project developer & participation in innovative battery storage technologyAfrica Based Advisory (Climate Change, Environment, Carbon Markets, RE Policy, Land Use & Forestry)Contact Eugene Obiero ([email protected] )