1. The African Development Bank Financing Mechanisms for Renewable Energy Lamin M Drammeh Private Sector Investment Officer Senegal Regional Office Wednesday, October 20, 2010 ECREEE Regional Forium on ESEI, Dakar, Senegal

2. Outline AfDBs new Energy Department (ONEC) Renewable Energy financing instruments Overview of projects in the pipeline Contact Details

3. AfDBs new dept - ONEC New department created in 2010 for greater focus on climate change and related issues Mission: to spearhead the Banks lending and non- lending operations in the areas of energy and environment and climate change mitigation and adaptation Addresses climate change and environmental issues by incorporating them into Bank Group supported operations.

4. Optimizing financing instruments to meet Africas energy needs Senior Debt: tenor and currency adapted to project needs; debt arranging capacity: African Financing Partnership: DFI co-financing platform A-B Syndication Program: leveraging the AfDB Preferred Creditor Status Guarantees: partial risk, partial credit Subordinated Debt Equity: direct, or indirect (equity funds) Technical Assistance, incl. for carbon credits Sovereign loans: Concessional, Non-concessional Climate Finance

5. Climate change financing AfDB has set up important mechanisms: Clean Energy Investment Framework ClimDev-Africa Special Fund Africa Carbon support Project Seed Capital Assistance Fund (SCAF) Leveraging additional funds through: Climate Investment Funds (CTF and SCF) Global Environment Facility (GEF) Scaling up Renewable Energy Program (SREP) Financing Energy Services for Small-Scale Energy Users (FINESSE)

6. Supporting Africas access to CIF Clean Technology Fund Pledges of around US$4.7 billion for 15 countries selected based on current carbon footprint and carbon growth path. US$1.9 billion to be allocated to 6 African countries. Since 2008, WB and AfDB joint missions to African countries, and workshops as needed, led to preparation and submission of Investment Plans. Summary of the Investment Plans for African Countries prepared jointly by WB and AfDB

7. Supporting Africas access to CIF The Strategic Climate Fund The Pilot Program for Climate Resilience USD 730 million for 9 countries and 2 regional programs Pilot countries in Africa: Mozambique, Niger and Zambia Strategic Programs for Climate Resilience under preparation which will include projects to be implemented by the WBG and AfDB. The Scaling Up Renewable Energy Program in Low Income Countries USD 300 million for 6 countries Pilot countries in Africa: Ethiopia, Kenya and Mali No official work has started

8. Supporting Africas access to carbon markets Africa Carbon Support Project Goal: assist clients in regional member countries to access carbon finance that will improve the commercial feasibility of their investment projects Purpose: capacity building program for host country government agencies; development of appropriate project preparation documentations (methodologies) Beneficiaries: private sector investors, CDM community as a whole. Budget of USD 1.8 Million for 2 years

9. Financing instruments under development ClimDev Africa Goal: Contribute to sustainable development by implementing climate-resilient development programs that mainstream climate change information into development planning at all levels in Africa Purpose: To strengthen the institutional capacities of national and sub regional bodies to make and implement climate-sensitive policy effectively Jointly implemented by AfDB, UNECA and the AU Commission Initial budget of USD 135 Million

10. Financing instruments under development Sustainable Energy Fund for Africa Component ObjectiveInstrumentsManagement Project Preparation for AfDB Make potential RE generation/distribution projects bankable by offsetting proj. prep costs Grants (both Bank-executed and sponsor-executed) In-house at AfDB w/ support of long term consultants (2) Support to SMEs in RE/EE Leverage investment in RE/EE through PSD, particularly in SMEs Equity investment and technical assistance Outsourced to Fund Manager (PE-style)

11. Financing instruments under development

12. Identified clean energy investments TechnologyCapacityInvestmentComments MWKUS$ BiofuelNA242A few project on pipeline Cogen410649Identified by the Cogen program Geothermal6001360Studies are still to be done Hydro283385Includes small hydro only Solar (CSP)7002.560Identified but excl. MENA program Wind9211860 Identified but excl. Morocco and South Africa

13. CSP projects in pipeline CountryNo. of Projects LocationCapacity (MW) Est. cost (US$ million) CTF Contribution (US$ million) Algeria3Megahir Naama Hassi Rmel II 80 70 322 285 58 51 Egypt2Kom Ombo Marsa Alam [1] 70 30 370 270 51 44 Jordan2Maan Province Aqaba-Qatrana transmission 100418 410 72 40 Morocco3Tan Tan [2] Ain Beni Mathar Ouarzazate 50 125 100 240 525 440 35 90 72 Tunisia3IPP-CSP Project ELMED-CSP Tunisia-Italy transmission 100 100+ 450 1140 73 40 Total13~900 MW5,604750 [1] This is a project with 8 hr storage so the size of the solar field will be equivalent to a 60 MW project. [2] This is a CSP-desalination project

14. Solar Thermal Power Station Morocco This plant combines solar and thermal power. It will produce up to 2000 MW of electricity with an annual saving of one million tons of oil.

15. Contact Details Richard Claudet r.claudet@afdb.org Mafalda Duarte m.duarte@afdb.org AfDB Web site: www.afdb.org r.claudet@afdb.org m.duarte@afdb.org

16. Thank you