Role of the African Development Bank in Developing Clean Investments

1. Role of the African Development Bank in Developing Clean Investments Mrs. Hela Cheikhrouhou – Manager Infrastructure Finance, Private Sector Operations, AfDB CSP Workshop – Tunis , October 2009

2. Clean Investments to be favored in African Countries if economically sustainable • African Countries are lagging behind in access to electricity and electricity consumption per capita; annual growth in installed capacity is relatively high in some countries to help bridge the gap • Countries present significant potential for renewable energies • Africa Region is among most vulnerable to climate change • AfDB thus Adopted « Clean Energy Investment Framework » and « Climate Risk Mitigation Policy », clearly favoring cleaner & environmentally friendlier technologies if they are economically viable to Regional Member Countries • Some technologies, like CSP, are too expensive to be considered unless substantial soft financing could be mobilized • Part of the solution to lower the cost of CSP could be the setup of local factories for some of the components. Such JVs between international players and local investors would also yield skilled jobs and growth. AfDB stands ready to support those initiatives.

3. Involvement in The CTF and Preparation of Investment Plans • Jointly with WBG, assist eligible RMCs to identify and present projects that are eligible for CTF funding • Contribute to the preparation of Investment Plans in collaboration with WBG – Such as investment Plan for : Once IP is approved, for projects where AfDB is designated to support implementation, the team works closely with the Government or private sponsor to prepare and appraise the CTF project and parallel loan from AfDB

4. The AfDB Main Focus Areas in Clean Energy Investments • Wind energy • Hydro Power • Solar Power (Mainly CSP) • Co-generation

5. Sample of Clean Investments : Private Sector Department

6. Sample Clean Investments : Public Sector Department

7. Assist clients tap into funding for project preparation

8. AfDB has 2 lending windows: Public and Private AfDB’s lending operations Public window Governments or state owned enterprises Sovereign Concessionary terms Private window - Privately owned enterprises - “Financially strong” government owned enterprises Non sovereign Commercial terms Recipient Guarantee Financial terms

9. The AfDB adapts its private instruments to meet investee company’s needs • Senior Debt – tenor and currency adapted to project needs • Guarantees – partial risk, partial credit • Subordinated Debt • Equity – direct, or indirect (equity funds) • Technical Assistance – grants for studies, capacity building • Assistance to benefit from Carbon Credits- eligible projects

10. In summary... • Cleaner technologies are to be favoured in African Countries, if made economically sustainable for them, which may require substantial soft financing resources e.g. for developing technologies like CSP. • AfDB is partnering with WBG to support eligible regional member countries in their applications to the Clean Technology Fund. The MENA CSP IP is ambitious and requires additional donor support in order to be successful. • AfDB stands ready to mobilize its public and private financing instruments to assist governments and entrepreneurs in African Countries, to optimize the implementation of viable clean investments.

11. Contact Private Sector Department African Development Bank BP 323, 1002, Tunis Belvedere, Tunis- Tunisia Tel:+216 7110 2140 Fax:+216 71 834 178 Email: private-sector@afdb.org h.cheikhrouhou@afdb.org Website: www.afdb.org/privatesector

12. Thank You