Please activate JavaScript!
Please install Adobe Flash Player, click here for download

ECOWAS Status Report - Conclusion

RENEWABLE ENERGY AND ENERGY EFFICIENCY STATUS REPORT 2014 | 69 Specialised funds for the development of renewable energy are playing an increasingly important role in supporting project development and catalysing financing in the region. The Sustainable Energy Fund for Africa (SEFA), a multi-donor facility hosted by AfDB, provides preparation grants and equity to bring small and medium-scale renewable energy generation and energy efficiency projects to bankability. SEFA was instrumental in the incubation and co-sponsorship of the African Renewable Energy Fund (AREF), a private equity fund with USD 100 million secured in March 2014 to support the development and construction of 5–50 MW grid-connected solar, small hydro, wind, geothermal, biomass, and waste gas projects across sub- Saharan Africa. The fund is managed by Berkeley Energy Africa with capital contributions from numerous actors, including the AfDB and SEFA, the GEF, the ECOWAS Bank for Investment and Development (IBID), The Bank for West African Development (BOAD), the Netherland Development Bank (FMO) and the African Biofuel and Renewable Energy Company (ABREC).16 The fund is expected to reach a second close at USD 200 million in 2014 with additional contributions coming from commercial and institutional investors. The U.S.-led Power Africa Initiative has pledged USD 7 billion to energy sector development in six African nations, including Ghana, Liberia, and Nigeria.xxv,17 The programme aims to add 10,000 MW of clean energy capacity across the region.xxvi,18 ECREEE has also taken a leading role in supporting project development by creating the ECOWAS Renewable Energy Investment Initiative (EREI) and the EREF. The EREF, created in 2011, offers grant funding for small- to medium-sized renewable energy and energy efficiency projects in rural and peri-urban areas of the region.19 The programme’s first funding window provided approximately EUR 1 million to 41 projects distributed across all 15 Member States.20 The second funding window under the EREF was opened for the submission of new proposals in summer 2014. The EREI has been established to attract investments to medium- and large-scale renewable energy projects in the region.21 Climate Finance Climate finance funds offer an additional opportunity to support renewableenergyprojects.Avarietyoffundshavebeenestablished by the international community to fund climate mitigation and, to a lesser degree, adaptation measures. Despite accounting for only 0.34% of global CO2 emissions in 2010, ECOWAS Member States can benefit from financing targeting low carbon development to scale up renewable energy in the region.22 Unlike private sector project finance, financing from climate finance sources is designed to support project development as well as policymaking and capacity building programmes. The region already has significant experience in attracting financing from these sources. Among the most successful to date has been the GEF. Operating under the GEF-Strategic Programme for West Africa (GEF-SPWA), the GEF has financed country-specific sustainable energy projects in 12 ECOWAS Member States—Benin, Cabo Verde, Côte d’Ivoire, the Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Nigeria, Senegal, and Sierra Leone—along with regional projects. Financing has gone to support renewable energy and energy efficiency projects as well as to develop an enabling environment for scaling up the sustainable energy sector. As of April 2014, nearly USD 100 millionxxvii had been approved or disbursed through the GEF to support projects in the region. The GEF Small Grants Programme has also been very active in supporting small-scale project development throughout the region. This can be a key funding mechanism for rural renewable energy projects. The programme provides grants of up to USD 50,000 directly to local communities for financing small- scale projects under its target areas. The CIF, a partnership between the international and regional multilateral development banks, aims to allocate USD 8 billion in an effort to leverage an additional USD 55 billion in financing to 48 select low- and middle-income countries.23 Both Liberia and Mali have been included in the pilot phase of the Scaling Up Renewable Energy in Low Income Countries Program, for which USD 551 million has been pledged.24 Within this programme, USD 2.5 million in grant funding has been allocated to two projects in Liberia, and USD 40 million in grant and low-interest financing has been allocated to project development in Mali.25 Further development of new and existing sources of climate finance could provide additional funding to renewable energy projects in the region. The CDM has already been used across the region to provide additional financial support to the development of renewables, while the Green Climate Fund—a financing mechanisms similar to the GEF—and Nationally Appropriate Mitigation Actions (NAMAs)—a mechanisms similar to the CDM— are just two of the tools envisioned to support future programmes. Mali has officially registered its proposed NAMA in Renewable Energy and Energy Efficiency with the UNFCCC. Through the NAMA mechanism, Mali’s Agency for the Environment and Sustainable Development (AEDD) is seeking USD 840 million in support for a programme aimed at scaling up energy efficiency as well as hydropower, wind, and solar development.26 xxv. In addition to the three ECOWAS Member States, Power Africa includes Ethiopia, Kenya, and Tanzania. xxvi. Technologies utilised include geothermal, hydropower, natural gas, and solar. xxvii.The exact amount was USD 97.4 million.The total includes USD 20.7 million allocated to the Lake Chad Basin Regional Program for the Conservation and Sustainable Use of Natural Resources and Energy Efficiency Program, of which Niger and Nigeria are partners along with Cameroon and Chad. 05INVESTMENT

Pages Overview