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Capital access for clean energy businesses in Africa

Capital access for clean energy businesses in Africa. LCEDN, London 24/25 June 2013. Large infrastructure is less critical to closing the universal energy access gap. How the energy access gap will be closed. Africa ( IEA). Off-grid. On-grid. Mini-grid.

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Capital access for clean energy businesses in Africa

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  1. Capital access for clean energy businesses in Africa LCEDN, London 24/25 June 2013

  2. Large infrastructure is less critical to closing the universal energy access gap How the energy access gap will be closed. Africa (IEA) Off-grid On-grid Mini-grid

  3. Conventional approach won’t solve most of the energy access challenge How the energy access gap will be closed. Africa (IEA) Asset types: Regional interconnectors, 50MW-1GW+ power stations, grid extensions, etc Capital; Public, national governments, ODA, MDBs. Not much private Asset types: Domestic scale solar, diesel, wind Capital; SME early stage equity, growth capital, inventory / working cap/consumer credit finance, Mostly private Off-grid On-grid Mini-grid Asset types: 50kW to 2MW hydro/solar/wind/AD/gasifier/biomass plus local distribution Capital; Asset/project finance/SME & project development equity. Mostly private, some public/NGO support

  4. Comparing LCOE of various electrification options 30km 3 per km 1.500 Diesel $1.50/l US$ per kWh 1.000 Diesel $1.50/l 1700 kWh /m2/yr $330 40Wp Diesel $0.70/l 0.500 $260 40Wp 2600 kWh /m2/yr Diesel $0.70/l 1 Km 100 per km Source: NORPLAN 2012. Cost competitiveness of rural electrification solutions

  5. There are as many different types of capital need in RE as there are in any other sector

  6. Public capital can support private participation in most types of capital need

  7. Challenges for DFIs in small scale renewable projects • Aggregation How to aggregate up the deal flow into something that is manageable? • Integration How to create an integrated approach that tackles all aspects of the problem? • Allocation What process for deciding which business/project to allocate capital/resources to? • Risk How to balance the financial objectives of the DFI and the “pioneering” objective of the intervention?

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