New Climate Investment Fund Beneficiaries

Fri, May 10, 2013

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Five African Countries and Jordan benefit from Climate Investment Funds to fund to finance their solar power projects

|  By Maureen Chigbo  |  May 20, 2013 @ 01:00 GMT

FIVE African countries and one from the Middle East are the latest beneficiaries from $7.6 billion Climate Investment Fund, CIF. The countries are Algeria, Egypt, Libya, Morocco, Tunisia and Jordan.  The Climate Investment Funds on Tuesday, May 7, approved that the countries should proceed with an updated version of a sweeping plan to create an unprecedented 1,120 megawatts, MW, of energy from concentrated solar power, CSP, for the region. The plan will receive $660 million from the CIF’s Clean Technology Fund, CTF, and is expected to leverage nearly $5 billion from other donors and private financing.

A breakdown of the CTF funding shows that Morocco will receive $218 million for 300 MW (Ouarzazate II),  Egypt, $123 million for 100 MW (Kom Ombo), Tunisia, $62 million  for 50 MW (Akarit, may increase to 100), while Jordan got $50 million for up to 100 MW. The technical assistance from CTF is $10 million.

The plan, first endorsed by the CIF in 2009, has undergone post-Arab Spring changes by each country to reflect the political and economic conditions in the region and to build on emerging lessons from the plan’s first project now underway – the Ouarzazate I 160 MW plant in Morocco.

The revised plan accepted Tuesday by the CIF governing body, provides a realignment of projects in the pipeline based on each country’s reassessed needs. It focuses on well-performing projects as a stronger measure of the plan’s positive impact; and expands its horizons to also include concentrated solar photovoltaic, CPV, technologies. It will also include business models from the public sector, public-private partnerships, PPPs, and independent power producers, IPPs.

The original plan projected a total of 895 MW of power, but with the revision the region now expects to achieve 1.12 GW, making it the most ambitious CSP program in the world. The countries have also agreed to request for a smaller funding envelope from the original $750 million to $660 million including currently funded projects.

“The changes suggested by the countries in the plan make it more viable and flexible and takes into account the realities each of these countries faces,” stated Mafalda Duarte, AfDB coordinator for the Bank’s CIF program. “We can all look to this revised plan as both a signal of hope for the forward economic and social movement in the region built on renewable energy, and a more realistic blueprint for the evolution of renewables as a potent engine of power globally.” The plan is also adding a technical assistance, TA, component to complement efforts at the project level and establish a critical platform for knowledge exchange as well as increase private sector involvement and regional integration.

Mustapha Bakkoury, president of the Moroccan Agency for Solar Energy, MASEN, who presented the revised plan to the governing body, emphasised to the CIF that, “We are looking forward to seeing more involvement by this kind of financing in the coming years, and hope it will help continue the dynamism of the solar power sector and its competitiveness with wind and other energy sources, including fossil fuels.”

In 2009, recognising their region’s enormous potential for tapping into CSP, the countries had agreed on an unprecedented investment plan for regional CSP development to generate one Gigawatt, GW, power and triple worldwide capacity, and had received a commitment for $750 million by the CIF’s Clean Technology Fund. The investment plan was designed around deployment of about 10-12 commercial scale power plants to be constructed over a three- to five-year time frame. Now, in the light of subsequent political and technological developments in the region, the countries and their partners have come together again to update and revise the plan to better suit their  current circumstances and consider advances in solar technology.

The CIF was established in 2008 as one of the largest fast-tracked climate financing instruments in the world. The $7.6 billion CIF provides developing countries with grants, concessional loans, risk mitigation instruments, and equity that leverage significant financing from the private sector, multilateral development banks, MDBs, and other sources. Five MDBs – the African Development Bank, AfDB, Asian Development Bank, ADB, European Bank for Reconstruction and Development, EBRD, Inter-American Development Bank, IDB, and World Bank Group, WBG – implement CIF-funded projects and programs.