Bangladesh Receives $185 Million World Bank Financing for Renewable Energy

The government of Bangladesh has signed a $185 million financing agreement with the World Bank to add about 310 MW renewable energy generation capacity, which will contribute to reliable, affordable electricity and cleaner air.

The Scaling-up Renewable Energy Project will focus on utility scale solar photovoltaic (PV) and rooftop PV to expand new markets in renewable energy generation it the country. The project will establish the country’s first large-scale 50MW grid-tied solar PV generation plant in Feni district, implemented by the Electricity Generation Company of Bangladesh (EGCB). To fill the gap in the long-term domestic financing market for renewable energy, the project will also support the Infrastructure Development Corporation Limited (IDCOL) to manage a Renewable Energy Financing Facility for both rooftop and utility scale solar PV. It will also help Sustainable and Renewable Energy Development Authority (SREDA) identify sites for large-scale projects and promote new net metering policy for rooftop PV.

“Since the last decade, the World Bank has helped Bangladesh increase access to electricity in rural areas through renewable energy. Today, Bangladesh has one of the world’s largest domestic solar power program that serves about one-tenth of the country’s population,” said Dandan Chen, Acting Country Director for Bangladesh and Bhutan. “Now, we are going one step further to help Bangladesh expand renewable energy generation on a larger scale. With strong collaboration between the public and private sector, we hope the project will help meet the growing energy demands of the population.”

The project will help unlock private investment and will aim to raise up to $212 million in financing from the private sector, commercial banks, and other sources.

“The project will be important for Bangladesh to tap into its potential for renewable energy generation. Further, it will help reduce a substantive amount of CO2 emissions per year, which is in line with the country’s nationally determined contribution to the Paris climate agreement,” said Monowar Ahmed, Secretary, Economic Relations Division, Government of Bangladesh.

The $185 million credit also includes a $26.38 million loan and a $2.87 million grant from the Strategic Climate Fund (SCF) of the World Bank’s Climate Investment Funds (CIFs). The credit from the World Bank’s International Development Association (IDA), has a 30-year term, including a five-year grace period, and an interest rate of 1.25 percent with a service charge of 0.75 percent. The SCF loan has a maturity of 40 years, including a grace period of 10 years with a service charge of 0.1%.

The World Bank was among the first development partners to support Bangladesh following its independence. Since then the World Bank has committed more than $30 billion in grants, interest-free and concessional credits to Bangladesh.With this project, the Bank’s ongoing support in the energy sector totals close to $2.4 billion, covering generation, transmission, and distribution, including renewable energy.

Mondelēz International Announces Renewable Energy Partnership in the U.S. with Enel Green Power North America

Mondelēz International and Enel Green Power North America, the Enel Group’s US-based renewables company, today announced the signing of a twelve-year power purchase agreement (PPA) under which Mondelēz International will purchase the energy delivered to the electricity grid from a 65 MW portion of Enel Green Power North America’s Roadrunner project, a solar farm in Texas, United States.

Glen Walter, EVP and President North America, Mondelēz International

The agreement is Mondelēz International’s largest renewable energy partnership at a global level and their first renewable energy PPA signed in the U.S. The partnership enables Mondelēz International to make substantial progress against its sustainability goals by reducing 80,000 metric tons of carbon dioxide emissions – that’s 5 percent of the company’s global manufacturing emissions*.

“Our ambition is to create a future where people and planet thrive by reducing the environmental impact of the snacks we make,” said Glen Walter, EVP and President North America, Mondelēz International. “This agreement demonstrates our commitment to reducing carbon dioxide emissions from our manufacturing footprint around the world, as well as specifically in North America. Together with our broader goals to eradicate deforestation in key ingredient supply chains, it forms a critical element of our sustainable snacking strategy and our contribution to creating a sustainable future.”

Enel Green Power North America, part of the Enel Group’s global renewable energy business line Enel Green Power, owns and will operate the 497 MW Roadrunner solar farm currently under construction. Mondelēz International will purchase the energy generated by a 65 MW portion of the project, which is enough to produce more than 50 percent of all the Oreo cookies consumed in the U.S. annually.

“We are proud to partner with Mondelēz International and to support their sustainability strategy and help meet their manufacturing emission reduction goals,” said Georgios Papadimitriou, Head of Enel Green Power North America. “As evidenced also by this agreement, businesses are increasingly turning to renewable energy, both for its cost competitiveness and environmental benefits. We look forward to continuing to deliver customized solutions that help our customers achieve both of these objectives.”

“Ceres congratulates Mondelēz International on their continued leadership in sustainability,” said Anne Kelly, vice-president, government relations at CERES, a Boston-based nonprofit that works with investors and companies on sustainability issues. “The company’s progress towards their 2020 goals and their commitment to offset their U.S. manufacturing energy consumption with new renewable energy generation will support collective efforts to limit global temperature rise to less than 2° C.”

The Roadrunner solar project, located in Upton County, Texas, is Enel Green Power’s largest solar project in the U.S. Once fully operational, the solar plant will be able to generate approximately 1.2 TWh annually, while avoiding the emission of over 800,000 tons of CO₂ per year.

The agreement is aligned with Mondelēz International’s purpose to empower people to snack right and the ambition to create sustainable and mindful snacks for both people and the planet to love. It’s also a key part of the company’s new 2025 Impact Goals which provide a clear roadmap for the years ahead. The company remains committed to using its global scale and focus where it can continue to make the biggest difference such as reducing its environmental impact, scaling its Cocoa Life sustainability program, minimizing food waste, tracking end-to-end CO2 emissions and minimizing priority sites water usage.

AfDB announces EUR 40 million investment from the European Commission for the Facility for Energy Inclusion (FEI)

The African Development Bank (AfDB) announced a EUR 40 million investment from the European Commission for the Facility for Energy Inclusion (FEI), a new platform for financing small-scale renewables in Africa.

Unlocking the transformative potential of small-scale renewables energy in Africa. Photo credit: AfDB

The announcement was made to energy sector stakeholders at a sideline event held during the Africa Energy Forum, which took place in Lisbon, Portugal from 11-14 June. The Bank, the European Commission, in partnership with Lion’s Head Global Partners and Fieldstone and the Lusophone Renewable Energy Association, presented the Facility to participants at the Forum.

FEI is a $500 million financing platform spearheaded by the African Development Bank to catalyze financial support for innovative energy access solutions.: FEI On-grid, a targeted USD 400 million fund, supports improved energy access through the development of small-scale renewable energy generation and mini-grids across Africa, while the Off-Grid Energy Access Fund (OGEF), a targeted USD 100 million fund, supports off grid energy distribution companies and boosts their long-term capacity to access capital markets at scale.

Joao Cunha, Manager for Renewable Energy Initiatives at the African Development Bank said FEI had been developed to offer debt instruments, including in local currency, to companies providing affordable, clean and sustainable access to underserved communities in the Sub-Saharan region.

“Through FEI, we aim to increase co-financing and private sector investment in innovative on-grid and off-grid clean energy access solutions, and consequently move faster on our “Light Up and Power Africa (https://bit.ly/2mMCgiY) priority to achieve universal energy access in Africa by 2025,” said Cunha.

The event was attended by the renewable energy investor community, including representatives from various Development Finance Institutions (DFIs), international and African commercial banks, project developers and sponsors.

During the event, the FEI fund managers guided project sponsors and developers in attendance through project selection criteria, and financing terms of the specific FEI windows.

In December 2018, the Directorate-General for International Cooperation and Development of the European Commission (DG DEVCO) approved a EUR 25 million investment to FEI On-Grid window, EUR 13 million into the FEI OGEF window, and EUR 1.6 million to support the Fund’s Technical Assistance Facility, which aims to build investee capacity in structuring and executing transactions in African capital markets. These investments will provide junior equity to strengthen FEI’s capital structure, and enable FEI to fundraise from a range of commercial and private investors.

“FEI is a great example of how the EU has been developing innovative financing initiatives together with financial partners such as the African Development Bank, to stimulate and de-risk private sector investments without which we won’t be able to address the growing energy demands and provide access to sustainable energy in sub-Saharan Africa,” said Hugo Van Tilborg, Head of Infrastructure, and African Development Bank Liaison at the EU.

The European Commission’s contribution further underscores the African Development Bank’s focus on building strong partnerships with diverse organizations in order to provide a wide range of grant and investment instruments to fast track sustainable energy access across the continent.

FEI’s off-grid window reached a $58 million first close in August 2018, with contributions from the African Development Bank, the Nordic Development Fund, the Global Environment Facility, All On and Calvert Impact Capital, Shell Foundation, USAID and the UK’s Department for International Development. FEI On-Grid is currently fundraising towards achieving a first close of about $120 million.

Ethiopia: AfDB’s Sustainable Energy Fund approves grant to spur renewable investments

The Sustainable Energy Fund for Africa (SEFA), managed by the African Development Bank on 17 May 2019 approved a $995,000 grant to support the roll out of a sustainable procurement framework for Independent Power Producers (IPPs) in Ethiopia.

Wale Shonibare

The SEFA grant will encourage private investments into hydropower projects through Ethiopia’s Renewable Energy Programme.

It will strengthen the government’s capacity to undertake bankability and technical analysis including feasibility assessments of projects in the hydro priority pipeline. The grant also provides for environmental and social impact assessments, resettlements action plans, and preparation of bidding documents for hydro projects.

“A well-structured procurement framework is crucial in mobilizing the investments necessary to achieve universal energy access in Africa. The SEFA program will boost private IPPs participation, and spur investments into the Ethiopian hydro power sector,” said Wale Shonibare, the Bank’s acting Vice President for Power, Energy, Climate Change and Green Growth.

 The program also complements the assistance provided by the Bank’s Institutional IPP/PPP Support Project, as well as the Bank-financed Mekele-Dallol and Semera-Afdera Power Supply for Industrial Development and Access Scale-up Project”, Shonibare added.

Ethiopia has a vast but untapped renewable energy potential. Under a long-term development strategy, the government has outlined a National Electrification Program (NEP), targeting universal access by 2025 through a 65% on-grid, and 35% off grid combination. The goal is to transform the country into a regional energy hub by 2030.

The Ethiopia Renewable Energy Program, supported by the  SEFA grant, is in line with the country’s Growth and Transformation Plan (GTP II) 2015/16 – 2019/20 and with the NEP targets. It also aligns with the Bank’s Energy Sector Policy (2012), the New Deal on Energy for Africa, especially focusing on “Renewable Energy” and “Early Stage Project Finance”.

The Sustainable Energy Fund for Africa (SEFA):SEFA is a multi-donor facility established to unlock private sector investments in small to medium-sized clean energy projects in Africa through three components: (i) grants to facilitate the preparation of renewable energy generation and energy efficiency projects towards bankability (ii) equity investments to bridge the financing gap for renewable energy generation projects and; (iii) support to public sector in improving the enabling environment for private investments in sustainable energy. SEFA is endowed with contributions from the Governments of Denmark, United States and the United Kingdom, and is hosted and managed by the Power, Energy, Climate and Green Growth Department of the African Development Bank.

Vantage GreenX Note II provides R2bn of funding to six renewable energy projects in South Africa

GreenX Note II is Vantage GreenX’s second generation renewable energy debt fund

Vantage GreenX Fund Managers announced on Monday that through its second renewable energy fund, Vantage GreenX Note II, it has provided R2.05bn of funding to a combination of six solar and wind energy projects with a combined capacity of 433MW. All the projects form part of Round 4 of the South African Renewable Energy Independent Power Producer (“REIPP”) procurement programme.

The GreenX funding was provided to four projects developed by BioTherm Energy and two projects developed by OMLACSA and ACED. All six projects reached financial close in the last two weeks of July 2018. The four BioTherm projects are the 86MW Konkoonsies II solar PV project (Northern Cape), the 45MW Aggenys solar PV project (Northern Cape), the 120MW Golden Valley wind project (Eastern Cape) and the 32MW Excelsior wind project (Western Cape). The two OMLACSA projects are the 75MW Droogfontein II solar PV project (Northern Cape) and the 75MW Zeerust solar PV project (North West).

GreenX Note II is Vantage GreenX’s second generation renewable energy debt fund. The R3bn fund has a mandate to provide Consumer Price Indexed (“CPI”) linked senior debt to sustainable projects that form part of the REIPP, Small Projects Independent Power Producers (“SPIPP”), Co-Gen and Gas procurement programmes run by the South African Department of Energy. CPI-linked debt, although not new to the local market, has for the first time provided a significant portion of the total senior funding to projects in this round. Due to the way it is structured, CPI-linked debt provides a hedge against inflation and it allows projects to bid lower tariffs for similar equity returns. In doing so it has ensured that affordable electricity tariffs are passed on to consumers.

Alastair Campbell, Managing Director of Vantage GreenX, said “It is with great pleasure that we announce that we have supported these six projects. Each of these projects has strong, experienced sponsors and solid project fundamentals. Together they represent a geographically diverse portfolio of assets. Despite the difficulties experienced by stakeholders in the industry over the last two years, we hope that the conclusion of this round of projects represents a watershed moment for the South African renewable energy industry and provides forward momentum to the sustainability of the domestic energy sector as a whole.”

The R2.1bn GreenX Note I is fully invested across eight solar and wind projects located in the South African provinces of the Eastern Cape, Northern Cape and Limpopo. The completion of the six GreenX Note II transactions takes the total number of investments made by GreenX to fourteen across the two funds. Vantage anticipates lending the remaining R1bn in GreenX Note II before the end of this year.

Vantage GreenX is part of the Vantage Capital group (www.VantageCapital.co.za). Vantage Capital was established in 2001 and currently manages capital of just over R11.0 billion (over $800 million) in five distinct mezzanine debt and renewable energy debt funds. Launched in 2013, Vantage GreenX focusses specifically on sustainable energy opportunities through its Note I and Note II funds. GreenX currently has R5.2bn of assets under management.

MDB Climate Finance Hit Record High of US$35.2 billion in 2017

An increase of nearly 30 per cent on the previous year, boosting projects that help developing countries cut emissions and address climate risks.

Climate financing by the world’s six largest multilateral development banks (MDBs) rose to a seven-year high of $35.2 billion in 2017, up 28 per cent on the previous year.

The MDBs’ latest joint report on climate financing said $27.9 billion, or 79 per cent of the 2017 total, was devoted to climate mitigation projects that aim to reduce harmful emissions and slow down global warming.

The remaining 21 per cent, or $7.4 billion, of financing for emerging and developing nations was invested in climate adaptation projects that help economies deal with the effects of climate change such as unusual levels of rain, worsening droughts and extreme weather events.

In 2016 climate financing from the MDBs had totalled $27.4 billion.

The latest MDB climate finance figures are detailed in the 2017 Joint Report on Multilateral Development Banks’ Climate Finance, combining data from the African Development Bank, the Asian Development Bank, the European Bank for Reconstruction and Development, the European Investment Bank, the Inter-American Development Bank Group and the World Bank Group (World Bank, IFC and MIGA). These banks account for the vast majority of multilateral development finance. In October 2017 the Islamic Development Bank joined the MDB climate finance tracking groups, and its climate finance figures will be included in joint reports from 2018 onwards.

Climate funds such as the Climate Investment Funds (CIF), the Global Environment Facility (GEF) Trust Fund, the Global Energy Efficiency and Renewable Energy Fund (GEEREF), the European Union’s funds for Climate Action, the Green Climate Fund (GCF) and others have also played an important role in boosting MDB climate finance. As well as the $35.2 billion of multilateral development finance, the same adaptation and mitigation projects attracted an additional $51.7 billion from other sources of financing last year.

Of the 2017 total, 81 per cent was provided as loans. Other types of financial instruments included policy-based lending, grants, guarantees, equity and lines of credit.

Latin America, Sub-Saharan Africa and East Asia and the Pacific were the three major developing regions receiving the funds. The report contains a breakdown of climate finance by country.

The sharp increase came in response to the ever more pressing challenge of climate change. Calls to galvanise climate finance were at the heart of events such as the One Planet Summit in Paris in December 2017, two years after the historic Paris Agreement was adopted. Multilateral banks began publishing their climate investment in developing countries and emerging economies jointly in 2011, and in 2015 MDBs and the International Development Finance Club agreed joint principles for tracking climate adaptation and mitigation finance.

Climate finance addresses the specific financial flows for climate change mitigation and adaptation activities. These activities contribute to make MDB finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development, in line with the Paris Agreement. The MDBs are currently working on the development of more specific approaches to reporting their activities and how they are aligned with the objectives of the Paris Agreement.

“For the World Bank Group, 2017 was a record-setting year on climate finance as a result of a deliberate effort over the past few years to mainstream climate considerations into our operations. This upward trend is continuing,” said World Bank Senior Director for Climate Change John Roome. “The Multilateral Development Banks are also playing a key role in leveraging private sector finance which will be critical to meeting the objectives of the Paris Agreement. Last year alone, the WBG crowded in $8.6 billion in private financing for climate change, which is up 27% from 2016.”

 

African Development Bank, Green Climate Fund and Africa 50 support Desert to Power programme

The African Development Bank, the Green Climate Fund (GCF) and the Africa50 investment fund signed a letter of intent to collaborate on the Desert to Power programme on the sidelines of the Bank’s Annual Meetings, Busan, Korea.

The Desert to Power programme, initiated by the Bank, aims to develop 10,000 MW of solar energy across the Sahel region. It is intended to provide solar generated electricity to 250 million people, including 90 million through off grid solutions, thereby enabling the development of agriculture and other economic activities.

The three institutions agreed that they will share ideas and resources about opportunities to make solar power available throughout the Sahel region, transforming African deserts into new sources of renewable energy.

The African Development Bank’s President,  Akinwumi Adesina welcomed GCF’s support to the initiative, which he said has the potential – with investment from the private sector – to become the world’s largest solar power zone.

“The Desert to Power programme will transform countries in the Sahel region by accelerating their access to energy through solar power. To realize this ambition, strong collaboration is needed. Therefore the partnership with the Green Climate Fund and Africa 50 is a great milestone and will help us deliver at scale.”

GCF Executive Director, Howard Bamsey highlighted the potential of Desert to Power.

“Sahel countries have identified the potential of solar power to bring green energy to people across the region. Renewable energy investment is a priority in their Nationally Determined Contributions (NDCs(link is external)) under the Paris Agreement,” he added, referring to the action plans national governments are developing to tackle climate change.

Alain Ebobissé, CEO of Africa50, stated: “Africa50 is about leveraging partnerships to contribute to the continent’s growth through developing and funding high impact private and PPP infrastructure projects. This agreement allows us to leverage our project development capabilities and build a bigger pipeline of bankable projects that will provide millions of people and businesses on the continent with clean and affordable energy.”