Multinational: African Development Bank’s Sustainable Energy Fund for Africa Approves $5.65 Million to Pioneer New Climate Finance Instrument for Off-Grid Renewable Energy projects in Africa’s Fragile States

The African Development Bank Group’s (https://AFDB.org/) Board of Directors has approved a $5.65 million reimbursable grant from the Sustainable Energy Fund for Africa (SEFA) to pilot the Peace Renewable Energy Certificate (P-REC) Aggregation Facility, a pioneering initiative that will, for the first time, deploy renewable energy certificates as a direct funding instrument for a portfolio of mini-grids across Africa’s most fragile and energy-poor countries.

Co-financed with the Nordic Development Fund, which committed an equivalent of $5.65 million, the $11.3 million facility will be managed by Camco Clean Energy (http://apo-opa.co/4uTPcWP), a climate and impact fund manager, and Energy Peace Partners (https://apo-opa.co/4sN9BLC) a US-registered non-profit that developed the Peace Renewable Energy Certificate label. The certificates come exclusively from small-scale mini-grid projects in conflict-affected and energy-poor communities, and are voluntarily purchased by multinationals looking to put their corporate sustainability spending where it drives the greatest social and environmental impact.

The facility will enter into long-term purchase agreements with qualifying mini-grid developers across 14 frontier countries—Burundi, Central African Republic, Chad, the Democratic Republic of Congo, Ethiopia, Liberia, Mali, Niger, Nigeria, Sierra Leone, Somalia, South Sudan, Sudan, and Uganda. It will provide developers with upfront cash payments in exchange for the rights to the certificates produced by the project. The facility will subsequently sell those certificates to global corporate buyers, channelling hard currency back to developers in markets where commercial financing is very limited.

Some 856,000 people across these 14 countries are expected to gain first-time access to reliable electricity as a result, roughly half of them women, through approximately 240,000 new connections and 71 megawatts of new renewable energy capacity.

The project is fully aligned with Mission 300 (http://apo-opa.co/3Q4ArjS), the joint African Development Bank and World Bank initiative to connect 300 million Africans to electricity by 2030. NDF (http://apo-opa.co/4svavwi) is contributing to the ambitious energy access targets of Mission 300 through their sizable renewable energy portfolio and as a member of the Development Partner Coordination Group.

“Lack of access to capital for rural electrification continues to be a major hurdle for universal energy access in the African continent, particularly in countries experiencing conflicts and fragility.  I am proud that SEFA is backing this innovative, first-of-a-kind facility testing a new climate finance product capable of unlocking new sources of commercial funding for private sector led mini-grids. This is the kind of market-making needed to advance Mission 300 objectives.” João Duarte Cunha, Manager, Renewable Energy Funds Division and Sustainable Energy Fund for Africa, African Development Bank Group

“Countries in Sub-Saharan Africa facing fragile and conflict-affected situations urgently need support and access to clean, reliable energy solutions. At NDF, we are proud to contribute to the Innovative Peace Renewable Energy Certificate (P-REC) Aggregation Facility, which helps bring small-scale, off-grid renewable energy to communities with no, limited or disrupted energy access. By supporting this initiative, we also strengthen the role of Nordic climate leadership—working in partnership, through innovation and responsibility, to advance sustainable energy solutions where they are needed most.” Satu Santala, Managing Director, Nordic Development Fund (NDF)

“PAF will provide additional low-cost, non-dilutive capital to energy access projects in fragile states. In doing so, it will provide more communities with access to the benefits of clean energy, boosting jobs, opportunities, and living standards. Camco is pleased to be working with EPP, SEFA and NDF on this important initiative.” Geoff Sinclair, CEO, Camco

“The majority of people on the continent without access to electricity live in fragile and conflict-affected countries where renewable energy projects can have outsize impacts – improving health, education, safety and security outcomes. The P-REC Aggregation Facility, based on EPP's Peace-REC label, can accelerate that transition by converting corporate climate ambition into upfront capital for renewable energy developers who would otherwise struggle to close their projects." Sherwin Das, Managing Director, Energy Peace Partners

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