2 November 2017
Climate Mitigation Finance Update: Addressing the Energy Transition in the Caribbean and Beyond
UN Photo/Christopher Herwig
story highlights

The GCF and Africa Finance Corporation have signed an agreement to contribute to low-carbon development within the continent, particularly in the power, transport, heavy industry and telecommunications sectors.

The Asian Development Bank (ADB) has approved several funding agreements, including for renewable energy access and sustainable public transport.

The Caribbean Renewable Energy Forum considered important aspects of the shift to clean energy within the Caribbean.

25 October 2017: Recent announcements in climate mitigation finance include funding for projects of all scales in many geographic regions, including large-scale solar projects in Kazakhstan and Egypt, distributed rooftop solar in Sri Lanka, investments in clean public transport in China, and several initiatives to boost access to electricity in island states in the Caribbean and the Pacific.

EBRD and GCF Contribute to Several New Initiatives

In financing to support renewable energy projects in Central Asia, the Green Climate Fund (GCF) has approved an allocation of up to US$ 110 million to the European Bank for Reconstruction and Development’s (EBRD) Kazakhstan Renewables Framework. Approved by the EBRD in 2016, the US$200 million framework aims to support investments in solar, wind, small hydropower and biogas energy sources as well as the modernisation and strengthening of the electricity grid in Kazakhstan to enhance the integration of renewable energy sources. [EBRD Press Release]

The GCF has also disbursed US$65.8 million to the Egypt Renewable Energy Financing Framework, a joint project between GCF and EBRD to support Egypt’s Sustainable Energy Strategy. By pooling resources of GCF, EBRD and other investors, the project supports Egypt’s feed-in tariff scheme, stimulating investments in renewable energy producers. [GCF Press Release]

In Africa, GCF and the Africa Finance Corporation have signed an Accreditation Master Agreement (AMA) to contribute to low-carbon development within the continent, particularly in the power, transport, heavy industry and telecommunications sectors. The signing of the AMA will allow the AFC to implement GCF-approved projects, having established itself as a leading renewable energy financing entity within the region. [GCF Press Release]

XacBank, a major Mongolian financial institution, held a one-day forum on green finance, with support from GCF. The event was part of ongoing efforts of GCF-accredited bank to promote green investments for sustainable economic growth and develop a low-carbon energy sector within Mongolia. The event brought together a range of experts to explore financially competitive low-carbon innovations to reduce greenhouse gas (GHG) emissions and improve energy efficiency. [GCF Press Release]

ADB Project Financing Approved for Several Initiatives in Asia

In Sri Lanka, the Asian Development Bank (ADB) has approved a US$50 million loan for rooftop solar power generation systems, also announcing that it will administer US$1 million in technical assistance from the Asian Clean Energy Fund under the Clean Energy Financing Partnership Facility. The US$50 million loan aims to increase the share of renewable energy sources in the Sri Lanka’s energy mix, and is part of ADB’s Rooftop Solar Power Generation Project that will finance solar rooftop projects equating to 50 megawatts of additional capacity by 2021. Co-financed with a US$9.8 million equity contribution from the private sector, the project also aims to develop market infrastructure and a bankable pipeline of projects for solar power systems through greater cooperation with private financial institutions and the establishment of technical guidelines and standards for the system. The $1 million technical assistance will support the project’s implementation through building capacity and increasing stakeholders’ awareness. [ADB Press Release]

ADB also announced the approval of a US$150 million loan to support the development of a zero-emission bus rapid transit (BRT) system in Jinan, China. Jinan is ranked as the country’s 9th most air polluted city, with transport cited as a key contributor. Expected to completed by 2023, key aims of the project include creating a sustainable public transport system to improve environmental quality and reduce health hazards, through providing the city with modern electric trolley buses, alongside implementing complementary policy measures to discourage the use of private vehicles. The ADB loan will contribute to the total project cost of US$442 million, US$272 million of which will be provided by the Jinan government. [ADB Press Release]

Marking a solid step towards increasing energy access in Vanuatu, in which electrification rate is only 33%, the Government of Vanuatu and the ADB have signed agreements totaling US$15.1 million for a project to increase renewable energy generation and energy access in the islands of Malekula and Espiritu Santo. The project aims to increase energy access as well as overall sustainability sustainability through decreasing long-term reliance on diesel fuel. Financed through the Pacific Renewable Energy Investment Facility, the project will include the construction of a hydropower plant, which is expected to provide more than 90% of the total energy generated for the Malekula grid until 2040, after expanding access to 1050 additional households.

The funding for the project includes a concessional loan equivalent of US$2.5 million from ADB’s ordinary capital resources, a US$2.5 million ADB Special Fund grant, a US$7 million Strategic Climate Fund grant, and US$3.1 million from the Vanuatu government itself. [ADB Press Release]

Caribbean Islands Work on the Transition to Renewable Energy

On October 18-20 2017, the 2017 Caribbean Renewable Energy Forum (CREF) took place in Miami, Florida, bringing together over 500 representatives from academia, governments, utilities, multilateral institutions and investment companies. Sponsored by the Caribbean Development Bank (CDB) and the Government of Canada, CREF 2017 considered important aspects of the shift to clean energy within the Caribbean, including: technical support needed by governments to plan and implement new technologies; ways for sector stakeholders to accelerate the region’s transition to renewables by building diverse partnerships and networks; and how to improve engagement with the wider public. [CDB Press Release]

The World Bank has approved grants worth US$35 million towards two projects to improve energy access and scale-up investments in renewable energy in Haiti, a country in which only one in three people have access to electricity. The ‘Renewable Energy For All’ and ‘Haiti Modern Energy Services for All’ projects aim to: develop enabling environments for private investment in clean energy; expand energy access for rural households through leveraged investments in micro and mini-grids, and village level systems; strengthen the capacity of local institutions and develop awareness of local communities on how to use renewable energy; and finance private operators, NGOs and Community Organizations to provide solar lanterns, and individual and home-based solar systems. [World Bank Press Release]

Several other projects have been announced by the CDB, including the approval of a US$350,000 grant to assist the development and planning of at least six energy storage and grid modernization solution proposals, through technical assistance provided through the Canadian Support to the Energy Sector in the Caribbean (CSES-C) Fund. The technical assistance grant aims to advance the transition of the electricity sector and increase deployment of variable renewable energy through providing incentives to utilities to embark on electricity grid modernization and energy storage projects. [CDB Press Release]

Also under the CSES-C Fund, the CDB has announced the approval of US$325,500 to the Government of St. Kitts and Nevis to identify environmental and social impacts of a geothermal energy (GE) exploratory test-drilling project design. [CDB Press Release]

A further €12 million grant has been announced by the CDB, received from the European Union Caribbean Investment Facility (EU-CIF), towards geothermal exploration in the Eastern Caribbean. The grant is made under the CDB GeoSmart Initiative, an initiative to promote sustainable geothermal development in Dominica, Grenada, St. Kitts and Nevis, Saint Lucia, and St. Vincent and the Grenadines. The funding is planned to be used for investment grants as well as technical assistance grants to support capacity-building initiatives and interconnection studies. [CBD Press Release]

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