The AfDB Experience on financing mechanisms for Renewable Energy in North Africa

1. The AfDB Experience on financing mechanisms for Renewable Energy in North Africa Expert Meeting on Financing Mechanisms for Renewable Energy in North Africa Tunis 3 – 5 October 2012 Ms. Hela Cheikhrouhou, Directeur Energy, Environment and Climate change Department (ONEC)

2. Who We are • AfDB is the Pan-African Multilateral Development Bank • Infrastructure Finance, Private Sector Development, and Regional Integration are institutional top priorities • AfDB leverages its AAA balance sheet to support the economic development in its regional member countries • AfDB has consistently been a major financier to the Energy Sector in Africa

3. THE ENERGY DEPARTMENT OF THE BANK

4. AfDB’s Energy Objective Objective Access to energy is closely correlated with observed reduction in the levels of poverty indicators The African Development Bank programs in the energy sector are targeted to scaling up access to energy services while assisting Africa adopt a sustainable path to a low-carbon economy. Sub-Saharan Africa has a disproportionally high percentage of households without electricity. Africa has significant energy resources, yet energy production remains low Africa currently contributes only 4% of t GHG, yet if industrial and economic development continues along a “business as usual” course, Africa’s emissions will increase significantly

5. Bank’s Strategic and Operational Approach • The Department : created in 2010 for greater focus on climate change and related issues • Mission of this new Department: to spearhead the Bank’s 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. Policy Ensuring access to energy and bringing Africa on a low-carbon growth path Programs Project

6. Pillars of AfDB’s Energy Strategy

7. Special emphasis on Catering to country specific needs and opportunities Leveraging Resources Enabling Regional Energy Trade Making PPPs work

8. Instruments The Bank will use an array of instruments that aim to leverage resources and support RMC government in meeting the sustainable energy challenge.

9. Financing to unlock Africa’s clean energy potential • Concessionary resources • Africa Green Fund • Climate Investment Funds (CTF and SCF) • Sustainable Energy Fund for Africa • Bilateral trust funds • Private capital • Fund for Private Sector Assistance • Seed Capital Assistance Facility • Clean Energy Bonds • Market mechanisms • Africa Carbon Support Program • Carbon markets

10. Available Climate Funds managed by the Bank

11. PROJECT HIGHLIGHTS FROM NORTH AFRICA

12. Solar Projects

13. Implemented project Morocco AinBeniMattar Concentrated Solar project • AinBeniMathar: • This a pure CSP 125-MW plant. The site is located 80 km south of the city of Oujda. Insolation has been measured at 2,290 kWh/m2 per year. It is using parabolic trough technology. • Mobilizing Euro 300 M, as well as co-financing from other sources • The AfDB Mobilized additional resources from GEF approx. 50MUS$

14. Up and coming… for implementation Concentrated solar power plant in Ouarzazate • 120-160 MW Phase I, 500 MW total • Mobilizing Euro 200 M, as well as co-financing from other sources • The Clean Technology Fund channeling USD 100 M via the AfDB • PPP through a special purpose company joining Moroccan entities and a private consortium

15. Socio-economic impact /Benefits Definition of preliminary measures to helpthe optimization of the socio-economic benefits of the Ouarzazate solar power complex Objectives Encourage the participation of local labor and contribute to the implementation of fair recruitment mechanisms and adapted trainings. Improve the existing infrastructure for the local communities and management of the additional traffic and extensions Introduce new activities to encourage job creation in relation with the complex (R&D Platform , scientific tourism, …) Construction : Thousands O&M : Hundreds Estimated job creation For a local development promoting an optimized integration

16. Projects under preparation1.Egypt: KomOmbo100 MW CSP project . The AfDB has already mobilized and secured additional financing through the CTF . Studies are under preparation . Financial Close expected 20132. Tunisia : 50 – 60 MW CSP project . The AfDB has already mobilized and secured additional financing through the CTF . Studies are under preparation . Financial Close expected 2013

17. Wind Energy Projects

18. KoudiaBaida II : 300 MW SITES DE PARCS EOLIENS MOROCCAN WIND PLAN 2000 MW Haouma : 50 MW Taza : 150 MW Khalladi : 120 MW Amogdoul : 60 MW Tarfaya : 300 MW Tiskrad : 300 MW Tanger II: 150 MW Akhfenir : 200 MW Laâyoune : 50 MW Boujdour: 100 MW Wind farms of the Private Sector (IPP) Wind farms in the EPC Abdelkhalek Torres : 50 MW Tanger I : 140 MW

19. MOROCCAN WIND PLAN DEVELOPMENT SCHEME • Public Private Partnerships • Moroccan participation by ONE, FDE)and Hassan II Funds in the corporate capital projects (35%) • Majority participation by private investors in corporate capital projects (65%) • Related Projects • STEP • Hydraulic projects • Electricity transmission • Industrial Integration • Reduction of future wind production costs • Development of related skills • Securing of O&M activities • PPA Contracts • PPA (project companies - ONE) Costs supported by ONE • ONE in close collaboration with its Moroccan partners (Hassan II, FDE) • Responsible for piloting and managing the program (design, studies, monitoring, …) • Supervises and coordinates all activities for the MoroccanWind Plan

20. FINANCIAL PACKAGE FOR THE MOROCCAN WIND PLAN ONE CTF CTF concessional financing is a key factor for the success of the program, making the cost per KWh of wind more competitive AfDB/EIB/KFW other DFIs financing Connecting projects: STEP, Hydraulic, Transmission 300 tp 400 Millions EUR 1,2 to1,3 Billions EUR 20

21. Up and coming… for implementation Wind Energy program • The Bank secured financing for 850 MW • Mobilizing US$ 300 M, as well as co-financing from other sources • The Bank mobilized and secured concessional financing from Clean Technology Fund and is channeling USD 125 M • PPP through a special purpose company joining Moroccan entities and a private consortium

22. Projects under preparation1.Egypt: 200MW Golf Ezzeit wind farm . The AfDB has already mobilized and secured additional financing through the CTF . Studies are under preparation . Financial Close expected 2013 - 20142. Tunisia: Approx. 300 MW wind farm (Cement factories) . under preparation but will be financed through the private sector window of the Bank

23. Our Vision: Access to reliable, clean, modern and affordable Electricity in Africa !