AfDB Special Coverage
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Participants at a seminar on Sustainable Energy Fund for Africa stress the need for an enabling environment for private sector participation in energy infrastructural development and services
| By Maureen Chigbo, Marrakesh, Morocco | Jun. 10, 2013 @ 01:00 GMT
A SEMINAR entitled Sustainable Energy Fund for Africa, SEFA, Reaching out to Project Financiers in Africa, was held during the African Development Bank’s, AfDB, 2013 Annual Meeting in Marrakesh, Morocco, May 29. The seminar, jointly organised by the Environment and Climate Change Department, ONEC and the Private Sector Operations Department, OPSM, of the African Development Bank aimed at presenting SEFA to stakeholders and implementation progress to date, taking stock of challenges in financing small/medium renewable energy and energy efficiency projects. It was also to introduce SEFA’s Component III to support public sector institutions in improving the enabling environment for private participation in energy infrastructure and services.
Chaired by Hela Cheikhrouhou, ONEC director, the seminar was attended by more than a hundred participants from the commercial banking, development finance, private equity, and project development entities. The event was also preceded by the official release of SEFA’s 2012 Annual Report, the first full year of operations of this important initiative. Cheikhrouhou applauded the valuable contribution from Denmark without which the Fund could not exist, underscoring that “SEFA’s goal is to bridge the gap of the missing middle” in energy projects.
In his contribution, Solomon Asamoah, deputy chief executive officer, CEO, and chief investment officer, Africa Finance Corporation, insisted on the challenges the project developers face whenever they seek for financing, and added that “any support that can help them must be welcomed” as is the case of SEFA.
Also speaking, Kevin Whitfield from Nedbank highlighted the need for more coordination among financiers as well as the opportunity to bundle the small projects into a programmatic approach. Agnes Dasewicz, director of the Private Capital Group for Africa, USAID, made an appeal for support to smaller projects by stating that “in order to drive economic growth, we need to support off-grid projects and solutions in rural areas”.
On his part, Tim Turner, OPSM director, explained how the new partial risk guarantees can be instrumental in crowding-in private capital in small and medium renewable energy projects by covering the country and off-taker risk faced by private investors.
Catalysing private sector investment is the cornerstone of SEFA intervention in order to increase access to sustainable energy on the continent while promoting local economic development and job creation. SEFA is a joint initiative between the African Development Bank and the government of Denmark comprising of resources of up to $56 million. It operates through two components – project preparation grants to facilitate the preparation of small and medium-scale renewable energy generation and energy efficiency projects and equity investments to bridge the financing gap for small and medium scale renewable energy generation projects. SEFA is structured to be used as a flexible multi-donor/multi-purpose platform to support access to sustainable energy agenda in Africa, and one of Africa’s potential instruments under the UN-championed Sustainable Energy for All Initiative.
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