1 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

2 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.

3 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/IPStatus EgyptApproved ($300m) Morocco To be presented to Oct Trust Fund committee ($150m) South Africa To be presented to Oct Trust Fund committee ($500m) NigeriaIP under preparation MENA CSPIP 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

4 Wind energy Hydro Power Solar Power (Mainly CSP) Co-generation The AfDB Main Focus Areas in Clean Energy Investments

5 Project nameCountry Capacity (MW) Applied Technology Financial close (year) Water supplyMauritaniaNASolar Pasteuriser2006 BujagaliUganda250Hydropower2007 SahanivotryMadagascar15Hydropower2008 BuserukaUganda10Hydropower Evolution One Clean Fund South Africa250+ Clean investment Private equity fund 2009 Agri BusinessMoroccoNA Agro-industrial project 2009 Sample of Clean Investments : Private Sector Department

6 Project nameCountry Capacity (MW) Applied Technology Financial close (year) Bujagali Transmission Uganda250Hydropower2007 Beni Matar Solar/Gas Thermal Power Station Morocco 250 MW 30 MW Solar Solar2007 Kuraimat Solar/Gas Thermal Power Station Egypt 120 to 150 MW) Solar2008 Sample Clean Investments : Public Sector Department

7 Assist clients tap into funding for project preparation Fund Max Assistance Amount SectorBeneficiary 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 Cogeneration2 million US$CogenerationSugar factories

8 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

9 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

10 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.

11 Private Sector Department African Development Bank BP 323, 1002, Tunis Belvedere, Tunis- Tunisia Tel: Fax: Website: Contact

12 Thank You