FINANCING RENEWABLE ENERGY IN AFRICA Angela Nalikka, Manager - - PowerPoint PPT Presentation
FINANCING RENEWABLE ENERGY IN AFRICA Angela Nalikka, Manager National and Regional Power Systems Joao Cunha, Manager Renewable Energy Webinar - Norwegian Energy Partners 19 May 2020 Outline 1. AfDBs role in lighting and powering Africa 2.
Angela Nalikka, Manager National and Regional Power Systems Joao Cunha, Manager Renewable Energy
19 May 2020
▪ Established in 1964 ▪ 54 African countries and 26 non- African countries ▪ USD 93 billion authorized capital ▪ Resources primarily raised from capital markets ▪ Established in 1972 ▪ Financed by 27 State participants and 4 regional donors ▪ USD 36 billion subscription ▪ Concessional financing terms for 37 eligible Regional Member Countries ▪ Established in 1976 by Nigeria ▪ Targets the Bank’s neediest countries ▪ Maturing in 2023 ▪ USD 242 million total resources KEY FIGURES CLIENTS PRODUCTS ▪ Private companies or SPVs in Regional Member Countries ▪ Governments of middle-income countries ▪ Governments of low-income countries ▪ Governments of poorest countries ▪ Technical Assistance, Grants ▪ Policy Advisory ▪ Loans, Equity, Risk Mgmt & Mitigation ▪ Concessional loans ▪ Technical Assistance, Grants ▪ Technical Assistance
➔Unparalleled access to governments, parliaments, private sector and other stakeholders ➔A broad range of products available to our clients (financing instruments, de-risking solutions, sectoral expertise, etc.) ➔Cooperation between public and private counterparties which is crucial in moving transactions forward
UA 13.8 billion committed to energy sector projects since 2000, of which UA 11.1 billion for the public sector and UA 2.7 billion for the private sector More than 3.7 million connections to the grid since 2000, and 560,000 off-grid connections since 2018 +18.5 GW of additional installed energy, of which 5.4GW from renewable energy resources +22,500 kilometers of transmission lines constructed, of which 9,800 are regional interconnections +102,000 kilometers of distribution lines constructed
Theme 1: Setting up the right enabling policy environment Theme 2: Enabling utility companies for success Theme 3: Dramatically increase the # of bankable energy projects Theme 4: Increasing the funding pool to deliver new projects Theme 5: Supporting bottom of the pyramid energy access programs Theme 6: Accelerating major regional projects and driving regional int. Theme 7: Rolling out waves of country-wide energy transformations
SOUTH AFRICA
NIGER CHAD ETHIOPIA
NIGERIA KENYA TANZANIA ZAMBIA NAMIBIA MALI
ANGOLA CONGO, DEM REPUBLIC SOUTH SUDAN SUDAN LIBYA
ALGERIA
EGYPT
Legend
21% - 40% 41% - 60% 61% - 80% 81% - 100% 0% - 20% Total IPP investment (for plants >5MW) > USD 2 Bn USD 0.5 Bn – 1.3 Bn < USD 0.5 Bn Share of IPPs in total installed capacity
Main reform goal
investment flows in the power sector Two Financially Viable Utilities > 27 GW in new capacity IPPs in >30 countries Atleast 34 African countries established regulatory frameworks Two Whole Concessions
Sources: Revisiting Reforms in the Power Sector in Africa (AfDB & Association of Power Utilities), Electricity Regulatory Index (ERI) for Africa 2019 (AfDB)
Unintended Consequences
50 100 150 200 250 300
North America Europe China India Africa
Source: IEA Africa Energy Outlook 2019 – Unit in dollars per capita
Source: IEA Africa Energy Outlook 2019 – Unit in GW
50 100 150 200 250
Coal Gas Oil Hydro Other RE
Africa 2010 2018 North Africa 2010 2018 South Africa 2010 2018 Rest of Africa 2010 2018
5 10 15 20 25
Ethiopia Côte d'Ivoire South Africa
Source: World Bank, 2015 – Unit in loss percentage
Africa average Developing countries average
Development of a 120 MW hydropower power plant in the central part of Zambia and a 276 km transmission line to connect the IPP to the power grid.
Zambia’s power generation capacity
Development of a 300 MW wind farm in the north west part of Kenya
Vestas, IFU 1000km transmission line to connect project to grid
Non-sovereign Window
Sovereign Window
Completion Risk
Key Figures
Total Project Cost EUR 635 million Debt : Equity 70 : 30 Senior Loan - Private EUR 100 million PRG EUR 20 million (up to 4× total exposure)
A 147 MW power station located in south- western Rwanda and eastern DRC between Lake Kivu and Lake Tanganyika on Ruzizi river.
Project Sponsors: Governments, IPS, SN Power
Cha Challe lenges wit ith Ut Utili ility-Scale RE RE Sm Small-Scale an and Dec Decentraliz ized RE RE
0.30/kWh) subsidized
quality and unreliable
IPPs
new transformational agenda focuses on transparency in public affairs, including energy.
AfDB, EB and EIB
A Gr Gran ant for Technical, Economic, Financial and Environmental for several mini-hydro
support government on tender development and transaction
power plants and provide universal electricity access to the population of STP
not meet the demand
IPPs (only 7.5 MW solar PV have reached financial close)
available from the national utility
hydropower (59 %), with the remaining 41 % being diesel generators
preparation gr gran ant to
accele lerate IPP de develo lopment
backup connection to the national grid
diversify generation sources and enhance drought resilience
to support government on PPA negotiations
grids, hence only few cities supplied
is operational
the emerge of PPP distribution concessionaires
private-led electrification through mini-grids
total if 0.5 million population and various businesses and corporates
AfDB pr provid idin ing USD SD 20m m loan
mob mobil iliz izin ing fr from GC GCF F USD SD 20m m lo loan and and fr from
SEFA USD SD 10m m vi viability- gap ap fi fina nancin ing (gr grant / / con
ion)
Gemena Isiro Bumba Kinshasa
23
Joao Duarte Cunha, African Development Bank 24 Investments in key Private Equity Fund renewables
26
Manager | Renewable Energy Power, Energy, Climate & Green Growth Complex African Development Bank j.cunha@afdb.org www.afdb.org
Manager | National and Regional Power Systems Power, Energy, Climate & Green Growth Complex African Development Bank a.nalikka@afdb.org www.afdb.org