THE HAGUE – In advance of Earth Day on April 22, Power Africa signed an agreement today with FMO, the Dutch development bank, to spur investment in renewable energy across sub-Saharan Africa. Through the United States Agency for International Development (USAID), Power Africa will commit $5 million in support of the Climate Investor One (CIO), which finances and helps fast-track wind, solar and hydro power projects in sub-Saharan Africa.
CIO targets medium-size renewable energy projects of between 25 MW and 75 MW, and shares Power Africa’s goal to add 30,000 megawatts (MW) of new power generation capacity and 60 million new business and household connections across sub-Saharan Africa.
“Power Africa’s support of the Climate Investor One is indicative of our continued investment in renewable energy technologies throughout sub-Saharan Africa,” said Power Africa Coordinator Andrew Herscowitz. “From wind parks in Kenya, to solar arrays in Rwanda, and geothermal generation in Ethiopia, Power Africa and our partners are putting the continent’s vast renewable resources to work. This agreement with CIO will not only help deliver new access to reliable, affordable, and sustainable electricity, it will help our African government partners boost economic development and tackle climate change at the same time.”
High energy demand and the challenges presented by climate change have advanced renewable energy solutions in sub-Saharan Africa. Many countries have established or are strengthening supportive policy and regulatory frameworks for private investment of renewable energy infrastructure activities. CIO combines three innovative investment funds into one: a Development Fund to reduce development times and improve bankability of projects; a Construction Equity Fund to provide a single source of equity finance to fund construction and progress projects to an operational stage; and a Refinancing Fund to provide long-term and low risk debt during operations. The three funds together allow CIO to help early-stage climate mitigation projects achieve bankability while providing an end-to-end public-private financing solution.
Linda Broekhuizen, Chief Investment Officer of FMO, said “We are proud of our cooperation with Power Africa to accelerate and simplify the financing of renewable energy projects in Africa. CIO is an innovative climate financing structure that fits very well in our work to empowering entrepreneurs in a sustainably responsible manner”.