March 2014 Sustainable Energy Finance Update
31 March 2014: Throughout the month of March, the World Bank, the Inter-American Development Bank (IDB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Asian Development Bank (ADB), the Global Environment Facility (GEF) and the African Development Bank (AfDB) undertook activities and approved funding for sustainable energy projects in countries including: the Democratic Republic of the Congo (DRC), France, Kenya, the Philippines, Romania, Solomon Islands, Zambia and Sub-Saharan Africa.
In the DRC, the World Bank approved a US $73.1 million grant for construction of the 'Inga 3 Basse Chute (BC) and Mid-size Hydropower Development Technical Assistance Project.' The loan will provide the DRC with expertise to support development of the 4800 megawatt (MW) Inga 3 dam, and fund technical, environmental and social studies to ensure its sustainability. The World Bank financing compliments US$33.4 million already provided by AfDB last year. By diverting one sixth of the flow of the Congo River into Bundi Valley to create a 15.5 square kilometer reservoir, the Inga 3 dam will produce electricity for up to nine million people, and sell power to domestic mining operations and to South Africa. [World Bank Press Release 1] [World Bank Press Release 2 With Video]
In France, EIB and a consortium of private banks have agreed to lend €250 million for the development of biomass energy schemes and waste recycling recovery in France. Two projects have been identified for eligibility in 2014: a plant for the company SMET 71's sorting, mechanization and composting operation that will be able to process 73,000 tons of waste per annum; and a plant for the company SYMEVAD's materials and energy recovery project that will have a 100,000 ton per annum capacity. [EIB Press Release]
In Kenya, EIB provided a €200 million loan to the Lake Turkana Wind Power project. The project, the total cost of which amounts to €620 million, will be the largest single wind farm in sub-Saharan Africa, and the largest private investment in Kenya ever. It will generate approximately 20% of Kenya's power, providing 300MW of wind power to the national grid. The electricity generated from the wind farm will be more reliable and 60% cheaper than current grid-based electricity in Kenya. The EU through its EU-Africa Infrastructure Trust Fund will hold a €25 million preferred equity share in the project and further support is being provided by AfDB, as well as Dutch, French, German, Finnish and Norwegian development finance institutions and commercial banks. [EIB Press Release]
In the Philippines, ADB has issued a US$350 million loan package for the construction of the 320MW Sarulla Geothermal Power Development Project in North Sumatra, Indonesia. ADB will provide US$250 million from its traditional loan mechanism, US$80 million from the ADB Clean Technology Fund (CTF), and US$20 million from the Canadian-funded Climate Fund for Private Sector in Asia under the Clean Energy Financing Partnership Facility. Upon completion in 2018, the project is expected to reduce carbon dioxide emissions by 1.3 million tons per annum. [ADB Press Release]
In Romania, EBRD is providing a €49 million loan, of a total project cost of €200 million, for the construction, commissioning and operation of a 36 turbine, 108 MW wind park in the Black Sea region of Dobrogea. The project will reduce carbon dioxide emissions by 140,000 tons per annum. [EBRD Press Release]
In the Solomon Islands, the World Bank has approved US$13 million in additional combined grant and loan financing for the Solomon Islands for the Sustainable Energy Project (SISEP). Solomon Islands has extremely low electrification rates, and electricity is prohibitively expensive. SISEP began in 2008 to improve efficiency, reliability and financial sustainability of the national power utility, the Solomon Islands Electricity Authority. This new loan will be used specifically to improve the country's largest electricity grid in Honiara. [World Bank Press Release]
In the Zambia, four rural areas in three provinces have received funding from the World Bank under the project Increased Access to Electricity Services (IAES) to bring off-grid solar electricity to energy poor areas not serviced by the national grid. The project, funded by a US$20 million Bank credit, is electrifying 23,000 households, 88 public facilities, including health clinics and schools, and 367 staff houses belonging the public facilities. It is also providing 202 public streetlights. Nationally, only 3% of Zambians have access to electricity. [World Bank Press Release]
In Sub-Saharan Africa more broadly, AfDB launched the African Renewable Energy Fund (AREF) with US$100 million in capital and anchor investments for small and medium-scale independent power producers (IPPs). The Fund will be managed by Berkeley Energy Africa Limited (Berkeley Energy) and aims to secure and additional US$100 million in funds for AREF over the coming year to invest in IPPs of between 5-50 MW in size that are in need of US$10-30 million each. [AfDB Press Release]
The 'Sustainable Energy Finance Update' feature of Sustainable Energy Policy & Practice provides a monthly overview of investments by international financial institutions (IFIs) as they relate to sustainable energy and energy efficiency.