June 2015 Sustainable Energy Finance Update
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During the month of June, the African Development Bank (AfDB), the Asian Development Bank (ADB), the Caribbean Development Bank (CDB), the European Bank for Reconstruction and Development (EBRD), the European Commission, the European Investment Bank (EIB), the Global Environment Facility (GEF), the Inter-American Development Bank (IDB) and the World Bank announced funding for sustainable energy projects.

AfDB, ADB, EBRD, the European Commission and the World Bank also released publications on financing and deploying clean energy.

june20151 July 2015: During the month of June, the African Development Bank (AfDB), the Asian Development Bank (ADB), the Caribbean Development Bank (CDB), the European Bank for Reconstruction and Development (EBRD), the European Commission, the European Investment Bank (EIB), the Global Environment Facility (GEF), the Inter-American Development Bank (IDB) and the World Bank announced funding for sustainable energy projects. AfDB, ADB, EBRD, the European Commission and the World Bank also released publications on financing and deploying clean energy.

The announced sustainable energy initiatives are being implemented in Argentina, Armenia, Chile, Ecuador, Finland, Germany, Guinea, Hungary, India, Kazakhstan, Kosovo, Lao PDR, Liberia, Mali, Morocco, Nicaragua, Pakistan, Peru, South Africa, Tajikistan, Turkey, Uganda, the US, Africa, the Caribbean and Europe.

In Argentina, a US$150 million loan from IDB will support research, development and technological innovation in the private sector in priority sectors, including renewable energy. [IDB Press Release]

In Armenia, the World Bank’s Climate Investment Funds (CIF) are supporting a geothermal exploratory drilling project through the Scaling Up Renewable Energy in Low-Income Countries Program (SREP) with a US$8.55 million grant. According to the proposal submitted by the International Bank for Reconstruction and Development (IBRD) and the Government of Armenia, the funding will also assist in assessing the geothermal resource. [CIF Document Page] [Project Proposal] [World Bank Project Page]

In Chile, CIF’s Clean Technology Fund (CTF) is funding technical assistance for a sustainable geothermal development project through a US$2.86 million grant. The project, which is being overseen by the World Bank, will support commercialization of geothermal energy in Chile over the long-term by addressing legal, social and market barriers. [CIF Document Page] [Project Proposal]

In Ecuador, IDB announced approval of a US$80 million loan for the National Electricity Distribution System, benefiting residential customers through more reliable delivery of and better quality electricity services. Other components of the project will improve the efficiency and demand management in the System. [IDB Press Release]

In Finland, EIB approved a €100 million loan to Helsinki Region Environmental Services for the construction of an energy-efficient wastewater treatment plant to replace an aging plant. The sewage sludge from the plant will be treated and digested to produce biogas, while heat produced during operation will be recovered efficiently to generate more thermal energy than is used by the plant. [EIB Press Release]

In Germany, a €156 million loan was approved by EIB to help finance the offshore Nordergründe wind farm. The wind farm will be one of the first offshore in Germany and will comprise 18 turbines with 111 megawatts (MW) of capacity. [AA Energy News Terminal Press Release] [EIB Press Release]

In Guinea, the World Bank and its International Finance Corporation (IFC) are partnering to implement the Guinea Power Sector Recovery Project, signing a management contract with Veolia Africa-Seureca consortium to “enhance the management, operation, and commercial viability of the electricity sector.” According to the World Bank, the contract is the first step of a “multi-donor supported power sector priority investment plan of over US$700 million” that will increase electricity access for people and businesses, and improve the reliability of supply for existing customers of the national utility. [World Bank Press Release] [IFC Press Release]

In Hungary, a €500 million loan from EIB will help finance energy, transport and environment projects to support national strategic objectives in areas such as climate change, energy efficiency and energy independence. The loan is the first tranche of an approved €1 billion. [EIB Press Release]

In India, IFC is boosting long-term financing for renewable energy, especially wind and solar, by subscribing to ten-year non-convertible debentures worth US$35 million issued by the infrastructure finance company, PTC India Financial Services, whose portfolio is 40% renewable energy. The IFC estimates the investment will fuel 129 gigawatt hours (GWh) of clean energy generation over five years. [IFC Press Release]

In Kazakhstan, EBRD and CIF’s CTF are providing loans of US$30 million and US$10 million, respectively, for major upgrades to the city of Pavlodar’s district heating system. The modernization of the system is expected to curb “huge” energy waste and heat losses, generate savings for suppliers and customers, and decrease carbon emissions. [EBRD Press Release] [EBRD Video]

Also in Kazakhstan, EBRD and CTF are co-financing the country’s first large-scale solar plant, with loans of €70 million and €13.8 million, respectively. The 50 MW plant, which is the first privately-owned renewable energy generator in the country, is being built jointly with local and European contractors to ensure technology transfer. EBRD also worked on Kazakhstan’s first wind farm to be financed under a feed-in-tariff (FiT) that the Bank helped develop. The Bank won a prize, the AmCham Environmental and Safety Award, in June for its pioneering work on the wind project. [EBRD Press Release] [CIF Press Release]

In Kosovo, IFC signed an agreement with NLB Prishtina, a Slovenian bank, to increase energy efficiency investments by small businesses and households. Under the capacity-building agreement, IFC will aid NLB Prishtina in identifying, evaluating and financing energy efficiency projects. [IFC Press Release]

In Lao PDR, the World Bank announced US$30 million to finance the Power Grid Improvement Project. The Project aims to meet the demands of rapid electrification in the country, improving efficiency and reliability of the distribution network. Inefficiency in the network currently causes losses of more than 20% in some areas, according to the World Bank. [World Bank Press Release]

In Liberia, a US$60 million loan is being disbursed by the World Bank to expand electricity access and to improve institutional capacity in the electricity sector. Using the funds, the Liberia Accelerated Electricity Expansion Project (LACEEP) anticipates connecting another 36,000 households and businesses. [World Bank Project Page] [World Bank Press Release]

In Mali, IFC’s InfraVentures fund and Eranove Group signed a concession agreement with the Government for the development of the €110 million Kenié hydropower project. The plant will add approximately 35-56 MW of capacity to Mali’s current 400 MW. InfraVentures will provide debt and equity financing for the project, complementing US$23.2 million in financing from Eranove. [IFC Press Release]

In Morocco, EBRD, Agence Française de Développement (AFD), EIB and KfW Development Bank launched the €80 million Morocco Sustainable Energy Financing Facility (MorSEFF) to support energy efficiency and small-scale renewables investments by private companies. MorSEFF will combine loans, free technical assistance and investment incentives to promote energy efficiency and renewable energy technologies. The Facility is also being supported by the EU Neighbourhood Investment Facility (EU NIF), with a contribution of €16.5 million. [EBRD Press Release]

In Nicaragua, IDB is supporting sustainable energy with a US$65 million loan for measures improving the financial and operational performance of the sector. The project will ultimately promote energy efficiency in the system by reducing losses and aid renewables integration. [IDB Press Release]

In Pakistan, IFC announced a US$50 million investment in the 102 MW Gulpur hydropower plant and committed to mobilizing an additional US$72 million for the project. The project will help address power shortages in the country and increase its renewable energy base. [IFC Press Release]

Also in Pakistan, IFC and Deutsche Bank signed a trade financing deal that will allow the import of equipment for a new wind power plant. As part of its Global Trade Finance Program, IFC issued a guarantee to Deutsche Bank to back a letter of credit issued by Bank Al Habib, allowing Yunus Energy to import a turbine from Nordex Germany. [IFC Press Release]

In Peru, where construction is growing and buildings consume 45% of all energy generated, IFC is supporting the creation of a green building code to increase energy efficiency and reduce carbon emissions. [IFC Press Release]

In South Africa, CTF allocated US$57.5 million for the expansion of the South Africa Sustainable Energy Acceleration Program (SEAP), which seeks to promote private sector participation in the power sector, particularly in cogeneration energy efficiency, wind and solar projects and solar water heaters. [CIF Document Page] [Original Project Proposal]

In Tajikistan, in preparation for frequent and consistent trade between it and Kyrgyzstan in renewable electricity based on hydropower resources, EIB lent €70 million for constructing a 500 kilovolt (kV) power transmission line to interconnect Tajikistan and Kyrgyzstan, a line to strengthen Tajikistan’s network and the extension of three existing power substations. [EIB Press Release]

In Turkey, the Efeler geothermal plant is receiving a US$200 million loan from EBRD, which helped secure an additional US$520 million in loans from three other banks. Set for completion in 2015, the plant’s total capacity will reach 170 MW, increasing Turkey’s geothermal capacity by 30%. [AA Energy News Terminal Press Release] [EBRD Press Release]

In Uganda, a World Bank US$135 million loan and US$8.2 million GEF grant are supporting the third phase of the Energy for Rural Transformation Project, which will increase rural energy access through, inter alia, grid extension, grid intensification, connections, household connections from existing lines, implementation support, off-grid energy access, solar PV installations, business development, quality standards enforcement, institutional strengthening and impacts monitoring. [World Bank Project Page] [World Bank Document Page]

In the US, the White House announced private sector commitments and executive actions totaling US$4 billion under the Clean Energy Investment Initiative, exceeding its original US$2 billion goal. The commitments, made by institutional investors, foundations, companies, research institutes and non-profits, are focused on spurring clean energy innovation. The White House announced that: the Department of Energy will launch a Clean Energy Impact Investment Center; the Treasury Department will develop guidance for foundation investments in for-profit companies; the US Small Business Administration (SBA) will continue expanding access to capital for innovative clean energy technology companies; and the Office of Management and Budget (OMB) will increase transparency of federal funding for clean energy innovation. [White House Fact Sheet]

In Africa, AfDB’s Sustainable Energy Fund for Africa (SEFA) approved US$1 million in grant funding for the first phase of the Green Mini-Grids (GMG) Market Development Program (MDP). GMG MDP aims to reduce market barriers to encourage scaled investment in mini-grids to provide remote communities with electricity access. [AfDB Press Release]

In the Caribbean, the CDB signed a €4.45 million grant contribution agreement with the EU-Caribbean Investment Facility (EU-CIF) in support of the Sustainable Energy for the Eastern Caribbean (SEEC) Programme, which will provide technical assistance and investment grants for sustainable energy solutions in six countries: Antigua and Barbuda, Grenada, Dominica, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines. [CDB Press Release]

In Europe, the European Commission and EIB are helping “first-of-a-kind” industrial demonstration projects in the fields of renewable energy and hydrogen and fuel cells through the InnovFin Energy Demo Projects initiative. Launched during the First Innovative Enterprise Week, the new financial product is a risk-sharing instrument that will use loans or loan guarantees to bridge the gap between demonstration and commercialization. [EIB Press Release] [EIB Annex to Press Release]

Also in Europe, the European Commission and EIB jointly launched the European Fund for Strategic Investments (EFSI), consisting of a €16 billion guarantee from the EU budget and a €5 billion allocation of EIB’s capital. EFSI will support, among other things, research and development, expansion of renewable energy and resource efficiency, and environmental, urban and social projects. [EIB Press Release] [EIB Fact Sheet]

On publications, AfDB published the ‘Renewable Energy in Africa: Tanzania Country Profile,’ reporting that the country’s untapped renewables potential could provide the 9 GW of additional power needs forecasted for 2035. The country’s geothermal and small hydro potential is estimated in the report at 650 MW and 480 MW, respectively. [AfDB Press Release] [Renewable Energy in Africa: Tanzania Country Profile]

ADB released the ‘Pacific Energy Update 2015,’ highlighting its work on, inter alia: the Solomon Islands Provincial Renewable Energy Project; hydropower and electricity access in Papua New Guinea; and Tonga’s goal of providing half of all electricity from renewable energy sources by 2020. The publication reports that ADB’s energy portfolio in the Pacific will exceed US$500 million in 2016. [ADB Press Release, Solomon Islands] [ADB Press Release, Papua New Guinea] [ADB Press Release, Tonga] [ADB Press Release, Energy Portfolio] [Pacific Energy Update 2015]

EBRD published a management manual in support of its work under the Belarus Sustainable Energy Finance Facility (BelSEFF). The guide is intended for Belarusian companies interested in implementing best practices in energy management to potentially reduce their consumption by 10-30%. [EBRD Press Release] [Guidance on Best Practices for Energy Management]

The European Commission released a renewable energy progress report indicating that the EU is on track to meet its 2020 target of achieving a 20% share of renewable energy in the overall energy supply. The report finds that the share of renewable energy in 2014 gross final energy consumption is projected at 15.3% and that meeting the 10% target for renewables in transport will be challenging, though feasible, as the 2014 projected share stands at 5.7%. [European Commission Press Release] [EU Renewable Energy Progress Reports] [IISD RS Story]

The World Bank updated its ‘Private Participation in Infrastructure’ database, reporting that private participation in the energy, transport and water infrastructure projects hit US$107.5 billion in 139 emerging economies in 2014. The energy sector had the largest number of new projects. [World Bank Press Release] [Private Participation in Infrastructure Database]

The World Bank also published the second report in its series tracking progress toward the Sustainable Energy for All (SE4All) goals, focusing on the 2010-2012 period. ‘Progress Toward Sustainable Energy: Global Tracking Framework 2015′ finds that Asian countries are taking the lead, accounting for 60% of the progress on energy access and clean energy. [World Bank Press Release] [Progress Toward Sustainable Energy: Global Tracking Framework 2015] [IISD RS Story]

On events, IFC and the Egyptian Banking Institute co-hosted a workshop on renewable energy investment opportunities in Egypt. Over 100 banking executives gathered for the one-day training session to learn about financing the projected 4,300 MW of new renewable energy generation capacity in Egypt, requiring US$8 billion in capital investment over the next four years. [IFC Press Release]