1) Let’s start with some background on IRENA, there is already a proud history there.
IRENA was established in 2011 and is headquartered in Abu Dhabi, the United Arab Emirates as the first international intergovernmental organisation dedicated to promoting the deployment and scale up of renewable energy globally. It has already become an internationally recognized knowledge source and hub for partnerships in the promotion and enabling of the sustainable use of all forms of renewable energy, for the transformation of the global energy system and the pursuit of sustainable development, energy access, energy security and low carbon economic growth and prosperity.
The partnership that IRENA has had with the Abu Dhabi Fund for Development (ADFD) since the end of 2012 exemplifies the way IRENA can work with other institutions to strengthen international cooperation on renewable energy deployment and achieving sustainable development. IRENA’s role within the IRENA/ADFD Facility is to be an international platform for project proponents from developing countries who are IRENA members, to seek funding. IRENA pre-screens these projects and recommends them to ADFD where there is a good fit between the type of funding needed and ADFD requirements. IRENA has an independent role as facilitator for project support, whilst ADFD is the funder. Through the partnership, the ADFD loan rates have been reduced to 1% for low income countries and 2% for middle income countries for a 20-year loan period including 5-year grace period to cover up to 50% of the projects costs. The rest of the funding can come from government, the private sector, development funds or any other source.
2) What does your role entail?
I manage the IRENA and Abu Dhabi Fund for Development partnership known as the IRENA/ADFD Facility www.irena.org/adfd . Through this Facility, ADFD committed concessional loans worth USD 350 million over seven annual funding cycles to renewable energy projects recommended by IRENA. My role entails managing the selection and evaluation of projects through an independent global panel of experts so that replicable, scalable and transformative renewable energy projects are selected for funding in developing countries helping to achieve sustainable development.
3) What projects that IRENA is currently involved in are you most excited about? How is this changing people’s lives?
I am most excited by the work that we are doing on the IRENA/ADFD Facility as we enter the final seventh annual funding cycle of the Facility. Since the first funding cycle, 21 projects have been selected for funding in 20 countries in Asia, Africa, Latin America, the Caribbean and the Pacific. These include Argentina, Cuba, Mali, Maldives, Sierra Leone, Antigua and Barbuda, St. Vincent and the Grenadines, the Seychelles, Argentina, Senegal, Solomon Islands, Niger and most recently in Mauritius and Rwanda. Six of these projects are expected to be completed by the end of 2018 with construction already having started for three of them. Ten loan agreements have been signed which means that tendering and procurement activities can go ahead for all these which will help them to advance ahead.
USD 214 million has been allocated to these 21 projects from the ADFD with USD 420 million being attracted from other sources to cover the rest of the project costs. The sources have been government, the private sector and other development funds.
120MW of new renewable energy capacity will come online as a result of the implementation of these projects that include hydro projects (20 MW one in the Solomon Islands) with co-funding from the Green Climate Fund to 1 MW mini-grid solar PV and wind projects, geothermal and waste- to energy projects.
These projects will improve energy access and benefit over 3.5 million people including households and small businesses in 20 countries.
Caption: IRENA/ADFD Facility – projects funded
4) What are the main challenges to the energy industry on the African continent in your view. And the opportunities for investors?
Africa faces an enormous energy challenge. Its growing population and economic progress has sent energy demand soaring. Countries throughout the continent are richly endowed with fossil-based and renewable energy sources. However, a continued reliance on oil and gas along with traditional biomass combustion for energy will bring considerable social, economic and environmental constraints.
Africa can deploy modern renewables to eliminate power shortages, bring electricity and development opportunities to rural villages that have never enjoyed those benefits, spur on industrial growth, create entrepreneurs, and support increased prosperity across the continent. Modern renewables can also facilitate a cost-effective transformation to a cleaner and more secure power sector. Some technology solutions are relatively easy to implement but require an enabling environment, with appropriate policies, regulation, governance and access to financial markets.
Investment promotion measures are needed to attract both domestic and foreign investors. In parallel there is a need to raise awareness among local financial institutions about the grid-connected and off-grid renewable energy market. Public financing can be most effective if used to reduce risk perceptions. Public-private partnerships can also help to share investment costs and risks. The off-grid market needs dedicated policy and regulatory frameworks in order to incentivise the private sector, foster innovative business and financing models and create enabling conditions for deployment.
5) How important is renewable energy in Africa’s energy mix?
Africa is changing fast. By 2050, it will be home to 2 billion people, of whom three out of five will live in cities. Over a third of its people have already joined the middle class. Sub Saharan African economies have grown 5.3 percent per annum in the past decade, with a dramatic increase in energy needs. As their growth continues, electricity demand will triple in the Southern Africa Power Pool and quadruple in the Eastern Africa Power Pool. The power sector presents significant opportunity to be transformed through the increased deployment of renewable energy technologies. IRENA work has shown that the share of renewables in the power generation mix could grow to 50% by 2030.
And whilst the power sector is the most visible candidate for an energy transformation, opportunities in the heating and transport sectors are also significant. A complete overhaul of Africa’s energy supply will require increased renewable energy penetration across the three sectors.
Renewables can be deployed rapidly to meet growing power needs, expand electricity access and fuel economic growth while reducing carbon emissions. Renewable energy has also been observed to have a ripple effect throughout society by improving public health, energy security, education, creating jobs, boosting GDP and improving balance of trade. It can also bolster water and food security.
6) How important is regional cooperation in your view?
Regional cooperation is crucial in bringing about efficiencies and economies of scale by deploying renewable energy technologies in a coordinated manner. Such an approach is particularly effective in large-scale deployment of shared renewable resources for power generation. Adopting an integrated approach to trans-boundary issues such as trade, regulatory frameworks and policies, regional infrastructure and other cross border issues would allow the countries to benefit from accessing regional renewable resources at affordable prices.
7) What will be your message at African Utility Week? What are you most looking forward to at the event? Anything you would like to add?
IRENA is an institution offering a platform for engagement to support renewable energy activities across countries. As such, we are communicating the offer of funding from the Abu Dhabi Fund for Development and are at African Utility Week to engage with various stakeholders including project proponents, experts and other funders on the IRENA/ADFD Facility.
I am looking forward to learning about the priority areas of work in renewable energy projects, programme development and seeking funding by various stakeholders.
For those people working in utilities, ministries, as well as project proponents, experts and investors who are interested to learn about the IRENA/ADFD Facility, I would like to extend an invitation to a lunchtime briefing on ‘Advice for accessing the IRENA/ADFD Facility final funding cycle offer for your renewable energy project’ in the Clivia from 12:00 to 13:00 on 16 May 2018 and the main conference presentation on ‘Accessing funding for replicable, scalable and transformative renewable energy projects through the IRENA/ADFD Facility’ at 13:15 to 13:30 on 19 May 2018.
08 May 2018
RENEWABLE INVESTMENT INTERVIEW: “Accessing funding for replicable, scalable and transformative renewable energy projects through the IRENA/ADFD Facility”
Ms Lockwood will address the Finance & Investment conference on the IRENA/ADFD Facility, while IRENA is also hosting a briefing on "Advice for accessing the IRENA/ADFD Facility final funding cycle offer for your renewable energy project".