africa enablers

africa enablers

alternative energy strategies for africa

africa enablers

Financial new investment in renewable energy

(US$ billion)

Developing markets are the focus of the 150 billion renewable energy industry but Africa is not part of it yet

Source: Bloomberg New Energy Finance: Global trends in renewable energy investment, 2011

2004 2005 2006 2007 2008 2009 2010

15

31

55

8082

6770

Developed World

4

12

21

32

5155

72Developing World

0.3 0.1 0.6 0.7 1.1 0.73.6

Africa

africa enablers

Grants �for emerging economies�bilateral or multilateral agreements

�governments�development finance institutions (DFI)

�none �never

Commercial loans�negotiated between project owner and banks�similar transactions reduce cost

�ECAs�commercial banks�DFIs

�4-7% p.a. �medium

Equity�economic viability�similar transactions reduce costs

�fin. investors�DFIs

�8-25% p.a. �very long

Concessional loans�DFIs�export credit agencies (ECA)

�2-4% p.a. �long�for emerging economies�bilateral or multilateral agreements

Project financing source and terms

Source of finance typical providerscost / rate of interest

repayment conditions

Higher cost finance is more abundant; but external equity increases lending limits and a track record of similar transactions reduces cost

africa enablers

Project financing steps in international banking practice

Banks are conservative, risk-averse and bureaucratic – but experience and track record can reduce time and cost

BOARD

APPROVAL

- Credit committee gives final approval

Final credit approval

- Special committee with experts assembles from DFI

Case committee approval

- Different evaluations including environmental, additionality, etc are undertaken by Development Finance institutions (DFIs) as well as lenders

Due diligence

- Project gets the initial approval from the credit committee

Initial credit approval

Complete credit

application

- Includes an independent evaluation of the feasibilities submitted

- Disbursement of technical assistance to the applicant

Pre-application

- To get an official project status

- Entity is in a position to allocate resources to the project

- Typical requirements such as feasibility study, PPA

- Country

screening to find

approved

renewable energy

projects;

- Disclosure to the

specialist

department

Screening

Source: African Development Bank

africa enablers

typical SSA on-grid renewable generation project: 40-100 MW

africa enablers closes the gap between large deal sizes required by long-term financing banks and the small scale deal capacity of local developers

6

greenfield stage

(1+ yrs)

development stage

(2 yrs)

financing stage

(1 yr)

construction stage

(2 yrs)

tota

l in

vest

me

nt

pe

r p

roje

ct (

US$

) 400m

200m

120m

80m

40m

20m

multilateral and commercial banks

will fund investment projects

greater than US$ 50 million

local banks do not provide

long-term finance

local developers have the balance sheet and

know-how to realise smaller, local projects

EU/US based developers do not have

the local connections and cost structures

to develop SSA projects

africa enablers:

taking local developments

to bankable status

Market demand for renewable energy finance in SSA

intergovernmental financing

government-led development projects

(fossil fuel based generation, tranmission

and distribution)

africa enablers

africa enablers brings affordable, large scale alternative energy where its impact is greatest: to emerging economies in Africa

Project Development• development of 300MW site in Eastern Ethiopia as

EPC + financing for the local power monopolist EEPCo

• Scouting of 50 MW wind farm site in Djibouti

• 300 MW wind power developments in a variety of European countries,

of which 200 MW owned and operated, through parent company

Financial Advisory• currently looking for renewable energy investment projects, 10-

100MW, for European investors

• €20 mm equity and debt fundraising

for local African wind power component maker

• launched an African infrastructure finance conference with private &

public sector financial institutions participating

Policy Advisory• three-year, €1.8 mm wind power industry development PPP co-funded

by GIZ.

• expert advice on draft law for feed-in tariff

• industry study on wind power impact on manufacturing sector

currently looking for renewable energy

investment projects, 10-100MW, in wind, solar,

geothermal & hydro power

Experience

africa enablers

africa enablers

alternative energy strategies for africa

africa enablers

Frankfurt, Zurich, Addis Ababa

www.africa-enablers.com

Frauenlobstr. 23

60487 Frankfurt, Germany

Tel: +49 69 7144 7621

Fax: +49 69 7144 7622

Dr. Philipp Schuller

Mob: +49 178 283 0271

schuller@africa-enablers.com