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Innovative financing initiatives to transform the African energy sector presented at PIDA Week
On Sunday, November 15, 2015, best practices and innovative financing initiatives were presented and discussed during the session of the third day of the first-ever Programme for Infrastructure Development in Africa (PIDA) Week, hosted at African Development Bank (AfDB) headquarters in Abidjan.
The session “Innovative Funding Initiatives for the Power Sector in Africa”, chaired by Ibrahima Thiam, former President of the ECOWAS Regional Electricity Regulatory Authority (ERERA), focused on recent best practices of innovative financing initiatives and implementation of projects that could transform the African energy sector in the near future. The overview of these projects illustrated which new innovative models are relevant to finance African energy projects and how they should be applied in the African context.
Aboubakari Baba Moussa, Director of Infrastructures and Energy at the African Union Commission (AUC), opened the session stating, “We must assure energy access, and this access should be sustainable and at reasonable cost.” He continued affirming that to achieve it “institutional coordination has to be taken seriously. It’s a matter of how we can put energies together.”
Philippe Niyongabo, energy expert, opened the first part of the session exposing the increasing need for exchange and coordination across the growing number of initiatives and programs in this sector. He introduced the mapping of the energy programs in Africa. “We want to create a knowledge base; we can mobilize partners; we can create synergies and optimize our resources,” he said.
For this purpose the Africa-EU Energy Partnership (AEEP) was requested by partners to compile a comprehensive and systematic mapping of initiative promoting energy in the African context. The mechanisms and criteria were presented on behalf of David Otieno, General Director at the AEEP Secretariat. The report will be presented at COP21 in Paris and the final report will be available to everyone next year. “This exercise it’s good for all stakeholder in the sector to know who is doing what. This map must go to a dynamic updating,” Ibrahima Thiam stated.
Alex Rugamba, Director of the Energy, Environment and Climate Change Department at AfDB, opened the second part of the session recalling that the President of the AfDB, Akinwumi Adesina, since taking office on September 1, has reaffirmed the position of energy among the key priorities for the Bank. The New Deal on Energy for Africa was launched by Adesina in Abidjan, Côte d’Ivoire, on September 17, 2015.
“Africa is extremely rich in energy resources, but very poor in energy supply. Significant development has been done in recent years,” Alex Rugamba said in his presentation. He affirmed that the ambition of the New Deal is the universal access to electricity by 2025. “New Deal is about partnership. Without partnerships, there is no way to achieve this big aspiration.”
Rahid Abdallah, Project Manager of the Geothermal Risk Mitigation Facility (GRMF) at the African Union Commission (AUC), presented the case of the GRMF, which is hosted and managed by the AUC and aims to reduce the risk associated with geothermal resource exploration and costs incurred at early stage. The GRMF was launched in April 2012 and provides financial support to assist in mitigating the geothermal exploration risk.
“This model of risk facility can be used in other technology,” Abdallah said.
The case study of a transformative regional project has been presented by Appollinaire Siengui Ki, Secretary General of West African Power Pool (WAPP). The WAPP interconnection project was created by the ECOWAS Heads of States on 1999 and adopted as priority project in 2005. “Its vision is to integrate the national power systems, in order to unify the energy market and provide power to countries. The principal objective is to construct a high-voltage transnational transmission line (1,300 km) that extends from Côte d’Ivoire to Guinea through Liberia and Sierra Leone,” Siengui Ki explained.
The conference continued with Didier Tella, the Director General of the Association of Power Utilities of Africa (APUA), who highlighted the benefits of borrowing by bonds in the local market, because “you borrow money with people who come part of the business,” he said.
El Missiry Mosad, Senior Energy Advisor at New Partnership for Africa’s Development (NEPAD) Agency and a panelist at the session to present Africa Power Vision (APV), stated, “Innovative financing is not limited to raising funds for project implementation. It also includes the creation of an appropriate environment for raising project finance at a reasonable price for the KWh.”
The subjects and issues raised during the conference were very important and they could stimulate longer debate. A working group to continue the debate was recommended by the audience.
In conclusion, Ibrahima Thiam said, “Alex Rugamba displayed in his presentation that Africa has enormous resources. Like someone living around the river and not having access to the water. We can’t go ahead with business as usual as we have been doing for the last 50 years. We must change behaviour.”
“A change of mentality is up to us and to make it happen we must work in synergy. PIDA Week is a strong platform for our coordination,” said Aboubakari Baba Moussa.
About the Programme for Infrastructure Development in Africa (PIDA)
The PIDA is a continent-wide program to develop a vision, policies, strategies and a programme for the development of priority regional and continental infrastructure in transport, energy, trans-boundary water and ICT. The Program’s Sector Studies, which are to be supported by the requested IPPF Grant, will prepare detailed analysis of strategic options for the development of the continental infrastructure in Transport, Energy, ICT and Trans-boundary Water based on a common vision to emanate from consultative/validation workshops at sector, regional and continental levels. The PIDA initiative is being led by the AUC, NEPAD Secretariat and the AfDB.
For information on PIDA Week, visit: http://bit.ly/1QGuGkO