Concentrated Solar Power in Middle East and North Africa 9 June 2011 Philippe Roos

Clean Technology Fund (CTF) A Climate Investment Fund (CIF) –Low-carbon technologies with potential for long-term savings of greenhouse gas emissions –Financing for demonstration, deployment and transfer of such technologies Donor countries pledged over $6 billion to CIFs Funds to be disbursed as grants, highly concessional loans or risk mitigation instruments Donors include US ($2bn), UK ($1.4bn), Japan ($1.2bn), Germany ($800m), France ($300m), Norway ($200m), Spain ($150), etc. 2

Why MENA, Why CSP? Middle East & North Africa (MENA), amongst the world's best conditions for CSP – Abundant sunshine, low precipitation, plenty of unused flat land close to road networks and transmission grids – Close to Europe, where green electricity is much valued Concentrated Solar Power (CSP), a technology of choice for climate change mitigation: – Still expensive, but with unexploited economies of scale and economies of experience – Proven technology, utility friendly – Transferable to developing countries, for both energy and manufacturing 3

A Long Term Vision MENA CSP CapacitySeveral hundred MW Several GW Several dozen GW Cost of CSP Cost of fossil fuels/CO Concessional finance for CSP MENA++++0 Export market++++ Domestic market+++ 4

The CTF Investment Plan Supporting the development of the first gigawatt Generation projects in 5 countries – Algeria, Egypt, Jordan, Morocco, Tunisia – At least $4 billion – First project under way: tranche 1 of the 500 MW Ouazarzate complex in Morocco Selected transmission projects – Jordan, Tunisia – $1.6 billion – Intra-MENA optimization, exports to Europe 5

CTF Contribution Endorsement by Trust Fund Committee in December 2009 $750 million earmarked Funds to be channeled through World Bank Group (IBRD, IFC, MIGA) and African Development Bank (AfDB) Highly concessional terms and conditions – 40 year maturity, 10 year grace period – 0.25% service fee 6

Financing the Plan CTF contribution Public & private sponsors: national utilities & IPPs Public & private lenders: multilateral & bilateral donors, commercial lenders, ECAs Guarantees and risk mitigation instruments 7

Challenges Implementation of policy and regulatory environment in MENA and EU Arranging suitable financing package for each project 8

Opportunities Security of supply for non oil producers, increased export potential for oil producers Export of electricity to Europe Local manufacturing – Job and wealth creation – Export of components 9

Local Manufacturing World Bank commissioned study carried out in 2010 by Ernst & Young and the Fraunhofer Institute Significant manufacturing potential in the region – Strong manufacturing base (auto and aero subcontracting) – Major CSP technology manufacturers already involved in 3 ongoing hybrid CSP projects in the region (Morocco, Algeria, Egypt) Target components – Construction and civil works – Mounting structures – Non-CSP-specific elements (piping, cables…) – Then, mirrors and possibly float glass – Later, production of receivers 10

Impact on Local Economies Increased local content Job creation up to 80,000 by

Conclusion A key technology for climate change mitigation and security of energy supply in the region Many challenges but implementation of the investment plan is under way To bridge the financial gap, efforts are required on all fronts: MENA countries, donors, European Union Local manufacturing, for much needed job and wealth creation Opportunities for project developers and equipment manufacturers 12

13 (tab on Solar)