renewAfrica InitiativeAdvancing European commitment to Africa’s clean energy access renew

AfricaI n i t i a t i v e

Table of contents

renewAfrica’sRoadmap and

Next StepsrenewAfrica Initiative

The ProposedProgramme

Africa’s Energy ContextRES4Africa Foundation

renewAfricaInitiative

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renewAfrica InitiativeAdvancing European commitment to Africa’s clean energy access

Africa's growth is asking for energy

Africa is the second most inhabited region globally, after Asia. It is the world’s fastest growing continent in demographic terms.

By 2030, more than 50% of the Africa's population will be living in cities.

African economic growth is projected to accelerate to 4% and 4.1% in 2019 and2020 respectively, but it remains insu�cient to address structural challenges.

Progress in access to electricity is expected throughout the world, but Sub-Saharan Africa lags behind.

Driven in large part by demographic and urbanisation trends, energy demand is expected to increase faster than anywhere else globally (at 2.1% per annum).

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7

Global RES capacity more than doubledover the past ten years, but Africa is lagging behind

2009

12

25

North America

Latin America

Asia Pacific

3.000

2.500

2.000

1.500

1.000

500

0

2019E

Europe

Africa

Middle East

412

384

233 394

704

260

1.264

26

58

Global Installed RES generation Capacity by Region - GW

Asia Pacific 58% Africa 2%MiddleEast1%

Δ 2010-19: + 1.476 GW

Europe 22%

NorthAmerica11%

LatinAmerica7%

Out of the 1.5 TW installed 58% was in Asia Pacific,7% in Latin America, and only 2% in Africa.

Source: IEA – WEO 2018, New Policies Scenario; United Nations – Population Division; EGP Analysis

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Bridging Africa’s energy access gap will requirearound €140 bn of investments in RES capacity

20% 19% 38%Hydro

Hydro

Wind Onshore

Solar PV

Geo

Bioenergy

2010

2017 Additional RES Capacity 2030

2017 2030

Other RES

Projected growth of Africa’s RES capacity

RES Installed In Africa (GW)

145GW

225GW

410GW

44

160116

Source: IEA – WEO 2018, New Policies Scenario; United Nations – Population Division; EGP Analysis

~140 bn€ to beinvested in orderto install ca. 120 GWof additional REScapacity in Africa

60%

21%

43%

6%8%

Regulations and supporting schemesvary across African countries

SUPPORTING SCHEMES

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RES Target and support mechanisms (existing or announced)

RES Target but NO support mechanisms

Scaling Solar

Auctions

REIPPPPR

S

C&I PPA market

The existing EU instruments in Africado not cover all investment phases

Phase

Milestone

Perceivedlevel ofsupport

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Legal, technical and

economic analysis Tender information

& documents Loan, insurances,PPA, guarantees

Construction, commissioning

O&M

Preparation

A gap analysis was carried out to understand and map existing initiatives and support mechanisms,following the criteria:

Bid documents Tender process Award Final agreements Construction and O&M

100% 29% 18% 65% 41%

Bidder consultation RFP

Proposalreview signing

the most uncovered areas

Type of support services o�ered (risk mitigation, technical assistance, capacity building)

Support services for large-scale RE generation (above 50 MW)

European instrument / European support

Geographical coverage

So what is still missing to scale-uprenewable energies in Africa?

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Adequate financingsupport

Sustainable projectdevelopment

An enabling regulatoryframework

Adequate de-riskingmeasures

Urbanconcentration

Demandgrowth

RESpotential

Populationgrowth

Landavailability

We need a comprehensive approach to support EURE investments in Africa

Facilitate high leveldialogue with governments

and authorities

Cover more Africancountries andtechnologies

Design structured tenderprocesses and standardized

documentation

Set the stage forthe right investment

environment

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Provide financial supportand risk mitigation tools

Promote capacitybuilding

and knowledge transfer

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renewAfrica seeks to create an impactfulEU Support Programme

rene

wAf

rica g

oals

Be a gamechanger in scaling up access to REat a transformative scale across the African continent

Propose the major features of a Programme to address allthe identified market gaps and build on best practices

Create a comprehensive one-stop-shop EU Programmefor RE support

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Signatories include key actors fromindustry, finance and academia

Finance Think tanks and consulting firms Independent Power Producers

Industry associations

Manufacturers

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The renewAfrica Steering Committeemembers cover each segment of the value chain

Members of the Steering CommitteeRepresent

the Initiativeand promote

its mission

Approvethe WorkingGroups outputs

Providestrategicguidance

Define the overalltimetable, milestonesand deliverablesof the WorkingGroups

SteeringCommittee’scomposition

Manufacturers Finance

Think tanksand consultingfirms

Independent Power Producers

Industryassociations

6 Working Groups are elaborating the Programme

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WG1 - Governance Final governance structureto be adopted by renewAfricaafter November 2019

WG2 – Advocacy and positioning Advocacy strategy to increase endorsement

and to position the Programme

WG6 – Financial supportFinancial instrumentsto support RE deploymentin African countries

WG3 – Capacity buildingStructured knowledge-transfer

to support local institutions,strengthen their skills and

create an adequate framework

WG5 – Technical assistanceWide set of supporting activitiesacross the whole project cycle

WG4 – RE promotion andPolicy dialogue

Policy recommendations fora successful RES deployment

in African countries

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Working Groups capitalize on the rich and diverseexpertise of the renewAfrica signatories

Governance Advocacy andpositioning

RE promotionand Policy dialogue

Capacity building Technical assistance Financial support

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Working Group 1Governance

An independent and well-functioninggovernance is key to pursue the ambitious

goal of creating a comprehensive andimpactful Programme

Secure EU endorsementfor the Programme

Legal form

Understand how to gain endorsementof the European Commission,and how to build on best practicesof existing support schemes

Funding scheme

A suitable funding scheme willensure the sustainability

of the Initiative

Governance structure

A well-balanced governance structurewill ensure transparency and e�ciency

of decision-making

Need to identify the most suitablelegal form for the Programme

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The expected outcome is a proposal for theProgramme governance and organizational structure

Assessment of potentiallegal form options

• What are the feasible legal form options, considering also the experiences of comparable initiatives? (e.g. Association, Foundation, other options)• What is the preferred legal form for the Programme?

Definition of anorganizational structure

Guidelines to secure EUendorsement for the Programme

• What are the priorities which the organizational structure should be consistent with?• What are the preferred options for organizational structure and related governance principles? (e.g. roles and responsibilities, power of representation)

• What are the relevant existing EU support schemes?• What are the options for gaining meaningful endorsement from the European Commission?

Proposal fora governance structure

• What kind of governance structure will enable renewAfrica to become a comprehensive Programme endorsed by the EU

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Working Group 2Advocacy and positioning

A clear positioning of renewAfricaand a related e�ective advocacy

strategy are key to ensure theengagement of the most relevant

key European and local playersof the RE African markets

Need to harmonize EUe�ort towards RE in Africa

Specific advocacy strategyto be developed

Many EU support instruments forRE investment in Africa already exist,renewAfrica aims to consolidate bestpractices and build a one-stop-shopprogramme

Need to position renewAfricaviz. existing instruments

A clear positioning is a key factorto properly communicate the added

value of renewAfrica and gatherconsensus and active support,

both in the EU and in Africa

Opportunity to pursue synergiesrenewAfrica can benefit from a commone�ort of all stakeholders active in the RE

development in Africa, also those alreadycommitted to other programs

A clear positioning needs to besupported by an e�ective andtargeted advocacy strategy

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The expected outcome is a proposedstrategy for advocacy and positioning of renewAfrica

Exploration of the landscapefor renewAfrica positioning

• What are the existing comparable instruments and programmes supporting RE in Africa? What are their di�erences and commonalities?• Can we pursue any synergies with instruments and programs already active in the field?

Definition of an advocacyand positioning strategy

Definition of an advocacyand positioning plan

• What are the key elements of our communication strategy? (main messages, added value, avenues of engagement, etc.)• What organizations / sector stakeholders could endorse and provide guidance to renewAfrica? (i.e. UNECA, etc.)• Define a roadmap to raise awareness and mobilize the engagement for renewAfrica among key players

• At what international events and workshops could renewAfrica be presented?• Define a roadmap for reaching out and engaging with key stakeholders• What is our advocacy monitoring plan? How will be gather feedback and assess our e�ectiveness?

Proposed strategy foradvocacy and positioning

• Which strategy will allow renewAfrica to spread its mission over the African and European continent, ensuring to engage the most relevant key players in RE African markets?

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A skilled local workforce and competentadministrative / institutional framework

are key to unlock the RES marketpotential in Africa

Trainings to further developproject skills

Trainings to further developtechnical skills

Local skill sets to be enhanced throughtargeted training programs(e.g. local financial intermediariesand investors)

Trainings to further developadministrative skills

Build up competences of localadministrative sta�

(ministries, energy authorities, etc.)

Improve information onlocal capacities

Improve information on localcapacity in terms of

qualification and reliability

Improve quality of technical trainingto stimulate the developmentof a construction andoperations workforce

Working Group 3Capacity building

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The expected outcome is a proposed frameworkto develop a capacity building Programme

Framework forassessing the local context

• How will we identify gaps in the local knowledge, including regulatory/policy making, administrative, contractual, technical and financial skills? (build on RES4Africa study1))• How will we manage our consultative process with local stakeholders? (e.g. survey, meetings, questionnaire)

Comprehensive list ofskills and stakeholders

• What skills should be the focus of the Program’s Capacity Building activities?• Who are the target stakeholders / beneficiaries of the Program’s Capacity Building activities? (e.g. government o�cials, local professional categories)

Map of potentialchannels to deploycapacity building

• What is our strategy for expertise procurement? (insourcing / outsourcing)• What are the potential channels to e�ectively convey capacity building activities locally and at scale? (e.g. local universities)

Standard processto develop localtrainings

• What are the existing e�orts in capacity building? What best practices can we build on? • How do we link capacity building activities to country specificities and Industry needs?

Proposed CapacityBuilding framework

• How do we approach and further develop Capacity Building in the Program?

Note: 1) Res4Africa Report “What does it take to accelerate RES investments in Africa: priorities and recommendations”, June 2019

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Working Group 4RE promotion and Policy dialogue

Structured EU-Africa policy dialogueand public-private collaboration

is essential to reinforce the REmarket attractiveness

Policy and regulatoryframework to be strengthened

Need for a more attractiveinvestment environment

Establish a standardized approachto identify the most suitable practicesto strengthen policy and regulatoryframeworks)

Public-private sectorscollaboration to be enhanced

Open a dialogue channel to allow a mutual,proactive and e�ective collaboration

between policy makers and REindustry players

Need for a more structuredEU-Africa policy dialogue

Set up a structured dialoguechannel between African

and EU institutions

Support governments in designingpolicies to reinforce the attractivenessof RE markets

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The expected outcome is a proposed policy dialogue channelto reinforce RE market attractiveness in African countries

Note: 1) Res4Africa Report “What does it take to accelerate RES investments in Africa: priorities and recommendations”, June 2019

Standard frameworkfor country targeting

• How do we assess gaps in the local regulatory framework concerning RE? (confirm RES4Africa study1).• Are there any relevant country similarities and clusters in terms of existing RE regulatory environments?

Methodology forcountry landing

• What are the existing EU-Africa policy dialogue approaches?• What are the successful past experiences in policy dialogue?• What are the potential avenues to promote RE and its potential to address the energy trilemma? E.g. conferences, seminars and institutional meetings

Guidelines to supportcountries to improve REmarket attractiveness

• What are the policy recommendations and actions needed to create favorable conditions for RE investments?• What are the avenues to improve public-private collaboration and to help industry players build relationships with governments?

Standard stakeholderengagement approach

• What are the relevant public and private stakeholders? What is their impact and influence?• What is our communication strategy and plan ? (e.g. messages, meetings, feedback mechanisms, timing and frequency of communications).

Proposed policydialogue channel

• What form of policy dialogue and public-private collaboration will facilitate the promotion of a RE-friendly regulatory environment in Africa?

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Working Group 5Technical assistance

Technical assistance alongthe whole project cycle is a keydriver for the scale-up of RES

and the increase of the Africanmarket attractiveness

Strengthen assistancein energy planning

Expand businessopportunity assessments

Provide support in the formulationof convincing medium- and long-termRE strategies with the objectiveto overcome grid / market constraintsand build project portfolios

Enhance standardizationof procedures

Support local authorities in standardizingall documents relevant to the development

of a tendering process(bid documents, PPA, etc.)

Provide technical supportat all stages

O�er specific forms of assistanceto all stakeholders involved,

both upstream (e.g. governments)and downstream (e.g. o�takers)

Develop a standard methodology forex ante assessment of investments(including pre-feasibility and feasibilitystudies as well as tax analysis)

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The expected outcome is a preliminary set of technicalservices to support the development of the RES African market

Technical supportframework for designingenergy strategies

• In which activities can we support governments in structuring national RE portfolio? (e.g. targets, tenders)• What are the lessons learned in the formulation of convincing medium- and long-term energy strategies?

Plan of technical assistanceactivities along the entireproject cycle

• What are the relevant assistance activities for each stage of the project cycle? (e.g. upstream - feasibility study, downstream - o�take etc.)• What are the best practices, synergies and opportunities for knowledge sharing?• What is our expertise procurement strategy? What e�ort and resources do we need in order to provide the envisaged support?

Roadmap for enhancingstandardisationof procedures

• What are the relevant procedures that can be standardized? (bid documents, environmental evaluation procedures, PPA, etc.)• What is the level of standardization in various country clusters?• What is the priority of procedures in terms of benefits unlocked?

Assessment oftechnical assistanceneeds for businesses

• In which domains can we provide assistance to industry players? (feasibility studies, permits and licensing, etc.)• In which domains should the Programme build its expertise?

Proposed technicalassistance framework

• What are the technical assistance tools for governments and businesses that will help renewAfrica build a strong and competitive RE project pipeline?

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Working Group 6Financial support

Define a financingapproach

Strengthen support inthe investment phases

Identification of a financing setof instruments able to foster privateinvestment through de-riskinginstruments

Identify a comprehensiveset of de-risking tools

Integrate and build a full financialpackage including guarantees and

insurances to cover all the maininvestment risks (political, regulatory,

counterparty, convertibility, etc.)

Foster a favorableinvestment climate

Enhance the investment climatefor private players planning

to develop RE in Africa

Tap into existing EU investment phaseenergy programs, and identifyinvestment and financing modalitiesfrom financing institutions

Comprehensive set of competitivefinancial and de-risking instrumentsto support RE deployment and foster

investments in African countries

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The expected outcome is to shape a package of financialand de-risking instruments to support RE investments

Analysis of existing financinginstruments and de-risking tools

• What are the main risks a�ecting RE investment in Africa? What are the existing financing schemes? (starting from the ex-ante study conducted by PwC)• What are the financial support instruments and ongoing programs / schemes that could be scaled up? (e.g. EGRE)• What is the preliminary ranking of best performing instruments?

Preliminary list of solutionsfor renewAfrica

Standard financingprocess for the Program

• What are the proven suitable forms of financing support? such as debt (senior, subordinated, soft) and/or equity• What are the suitable existing tools on co-guarantors, insurers, etc.?

• How to we build comprehensive financing and guarantee packages to support renewAfrica?• How do we design the right instruments to respond to country specificities? • Blueprint of the end-to-end standard financing package

Proposed package of financialand de-risking instruments

• What would be the prototype of a financial support package, including complementary de-risking measures and mechanisms?

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The resulting Programme will be an enablerand a de-risking instrument…

It will combine the best diverse features of the existinginstruments to form a stronger, more completeplatform to enhance the development of large scaleRE projects in Africa

It will be based on a holistic approach and set the stage for the adequateinvestment environment, covering all the investments phases and providingtechnical assistance / capacity building support to all stakeholdersinvolved, complemented by dedicated financial support mechanisms

It will leverage the existing best practices and attract the most relevant risk mitigation instruments from the market to provide insurances or guarantees to ensure bankable projects

… covering all the investment phases

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Phase

Milestone

Type of Support

Legal, technical and

economic analysis Tender information

and documents Loan, insurances,PPA, guarantees

Construction, commissioning

O&M

Preparation Bid documents Tender process Award Final agreements Construction and O&M

••

•

•

Public-Private PartnershipsCapacity building and knowledge transferRenewable energy projectsportfolioAllocation of the existing funds

•

•

Standardizeddocuments for thetendering processProject evaluation

•

•

Negotiationprocess forthe contractsfinalizationGuarantees andinsurances tocover risks

•

•

Monitoring in the construction andoperation phaseDevelopmentof local skilledworkforce

Bidder consultation RFP

Proposalreview signing

renewAfrica has gained momentum

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Launch of renewAfrica and signature of the Declaration of Intent by 22 stakeholders Presentation to EIB

and other EDFIs

Presentation to UNECA and AUC to start

EU-Africa dialogue

Since June 4th the Declaration of Intent is open for signature

June 4th Rome

First meeting of the Steering Committee

June 19th Addis Ababa

July 17th Luxembourg

September9th

September16th

Rome

Brussels

Presentation to DG DEVCO and DG Energy

renewAfrica roadmap in order to runat full speed in 2021

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Harmonizationof EU e�orts

to support energytransition in AfricaStructure

the Initiativeand propose

guidelines forthe Programme

Programmedetailed

set up,dedicatedresources

identifieldand allocated

Establishment ofa platform to further

facilitate dialogue withAfrican countries

EU SupportProgrammerunning atfull speed

Selection of one pilotAfrican country to

test the Programme

Presentation of the renewAfrica Initiativeand proposed Programme

to the European Commission

Short-term

Sept. – Dec. 2019 2020 2021 – onwards

Mid-term Long-term

MOROCCO

ZAMBIA

SOUTH AFRICA

ALGERIA EGYPT

JORDAN

ETHIOPIA

KENYA

TUNISIA

What we have done since 2012 Where RES4Africa Foundation is

Dedicated studies andmarket intelligenceto provide an updated picture ofthe current renewable energy marketcontext and specific analysis of themost crucial aspects for unlockingRES investments in a country

Dialogue and strategicpartnershipsto connect stakeholders within strategiccooperation initiatives to achieve projectresults, access financing, and influencepolicy and regulatory dialogue

Capacity building,training andinnovation activitiesto create awareness about REopportunities and support localinstitutions with a knowledgetransfer approach

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A unique and preciseMission: create anenabling environmentfor RES investmentsin Africa

RES4Africa Foundation supports the creation of anenabling environment for RE Investments in African countries

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renewAfrica is one of the five strategicinitiatives promoted by RES4Africa

RES4Africa Foundation

Market readiness Water-Energy-FoodNexus

renewAfrica Expanding capacitybuilding programs

Institutionalpositioning

Benchmarkingprogress in achievingpolicy and regulatory

reforms able to attractinvestments for theintegration at scale

of RE

The Nexus revealsbusiness cases that

reimagine energy connectingwith water and foodto respond to energy

access and developmentneeds

Strengthen itscapacity building e�ortsfor public sector decision

makers on state ofthe art policies andregulations in the

energy sector

Strong institutionalpositioning in a larger

ecosystem at internationaland regional level through

specific and concretealliances

An industry-driveninitiative promoting

the creation of acomprehensive

EU supporting Programmefor an impactful RE

developmentin Africa

Contact

RES4Africa Foundation Renewable Energy Solutions for Africa www.res4africa.orgsecretariat.renewafrica@res4africa.org

Via Ticino, 1400198 Rome Italy

renewAfricaI n i t i a t i v e