COP23: One of the biggest challenges facing the continent is the lack of bankable projects, experts agree
Experts discussed best practices on renewable project development and identified common obstacles for obtaining financing at a “Private sector engagement: best practices in renewable energy” event hosted by the International Renewable Energy Agency at COP23 in Bonn.
The November 9 event aimed to promote closer engagement with the private sector to overcome technical project development challenges and to improve existing approaches to mitigate technical renewable energy project risks. The session featured the Project Navigator and the Sustainable Energy Marketplace, tools developed by the (IRENA). The project Navigator is a free online platform that provides comprehensive, easily accessible, and practical information, tools and guidance to assist in the development of bankable renewable energy projects.
Al Hamdou Dorsouma, the African Development Bank’s Division Manager for Climate Adaptation and Green Growth, was a guest speaker and introduced the Bank’s current activities and how these initiatives are addressing project preparation challenges in Africa. “One of the biggest challenges facing the continent is the lack of bankable projects,” he said. “To address this, the Bank has invested in project development companies and hosts several project preparation funds.”
In particular, the Sustainable Energy Fund for Africa is a US $90-million multi-donor facility established in 2012 to unlock private investments in sustainable energy projects through three financing components: project preparation grants; equity investments to infuse the capital and managerial capacity; and enabling environment grants to public sector institutions. To date, SEFA has committed US $64 million to a diverse portfolio of 38 projects in 21 countries, including nine multinational projects, for an investment pipeline of US $1.46 billion and 465 MW of new capacity.
During his presentation Dorsouma highlighted the importance of private sector engagement in project development for the achievement of the climate goals and also the relevance of tools like the Project Navigator and other IRENA project facilitation initiatives in this context.
“There is a natural link between the renewable knowledge expertise of IRENA made available through tools such as the navigator and the AfDB’s financing instruments for renewable energy,” he added.
“The Bank will launch the Africa Investment Forum to bring together governments, private investors, MDBs/DFIs and other relevant partners in order to address bottlenecks to investment, discuss investment opportunities and agree on roadmaps making transactions happen.”