Project profile — Supporting Renewable Energy in Africa - Africa Renewable Energy Initiative (AREI)



Overview 

CA-3-D003611001
$150,000,000
IFC - International Finance Corporation (44004)
2017-12-22 - 2040-04-13
Operational
Global Affairs Canada
WGM Africa

Country / region 

• Africa, regional (100.00%)

Sector 

• Energy Generation, Renewable Resources: Energy generation, renewable sources - multiple technologies (23210) (100.00%)

Policy marker 

• Gender equality (significant objective)
• Environmental sustainability (cross-cutting) (principal objective)
• Participatory development and good governance (not targeted)
• Trade development (significant objective)
• Biodiversity (not targeted)
• Climate change mitigation (principal objective)
• Climate Change Adaptation (not targeted)
• Urban issues (significant objective)
• Desertification (not targeted)
• Children's issues (not targeted)
• Youth Issues (not targeted)
• Indigenous Issues (not targeted)
• Disability (not targeted)
• ICT as a tool for development (not targeted)

Description 

This initiative establishes a loan fund managed through the World Bank Group’s International Finance Corporation (IFC) in support of the objectives of the African Renewable Energy Initiative (AREI). It will help increase Africa’s energy access and curb the effects of climate change through private sector investments in eligible renewable energy projects. This was announced at the Climate Change Conference of Parties (COP21) in Paris, in December 2015, as part of Canada’s pledge of $2.65 billion (2016-2021) to support the efforts of developing countries towards a low-carbon future. IFC lends Canadian funds on concessional terms alongside its commercial resources to eligible renewable energy projects. These funds leverage other public and private sectors investments, thus “unlocking” private capital that would not normally be available for these projects due to perceived risk. Borrowers would be private sector companies, seeking funding to support the construction and operation of renewable energy infrastructure projects, such as solar, hydro and biomass. AREI is an African-led continental framework that aims to accelerate access to sufficient, clean, appropriate, and affordable energy using renewable energy systems. It aims to mobilize Africa’s potential to generate at least 300 GW additional renewable energy capacity by 2030.

Expected results 

The expected outcomes for this project include: (1) generated 490,000 MWh/year Renewable Energy; (2) installed 270 MW Renewable Energy; (3) leveraged US$350 million additional Private/Public Sector investment; (4) reduced/avoided 340,000 metric tons of CO2/year Greenhouse Gas; and (5) reached 930,000 residential customers.

Results achieved 

The totality of Canada's $150M has been committed to a pipeline of eligible investment opportunities. To date, two deals have been closed: - a senior loan of up to US$25 million to scale up clean energy production capacity in Gabon will result the construction of the Kinguele Aval hydropower plant, and constitute the first Independent Power Producer (IPP) in Gabon. Its construction is expected to start in the third quarter of 2021 and be completed in 40 months. The 35 MW hydropower plant will bring low-cost, clean power generation capacity to Gabon's capital Libreville. It is expected to generate 203 GWh of electricity, amounting to approximately nine percent of the country's current total output, enough to serve 32,000 customers and saving more than 90,000 tons of CO2 emissions per year; and - a $10m loan as part of a larger package to finance the expansion of solar power generation in off-grid areas of Nigeria. This project with Daybreak Power Solutions Limited is expected to reduce greenhouse-gas emissions by over 32,000 tons of carbon dioxide per annum, and decrease local air pollution. The project also commits the borrower to advance gender equality considerations through its involvement with the Canadian-funded IFC program ‘’Energy2Equal’’ to close gender gaps and increase women’s participation in the renewable energy sector with a focus on leadership roles and technical positions.

Budget and spending 


Original budget $0
Planned disbursement $0
Transactions
Country percentages by sector
Type of finance Reimbursable grant
Collaboration type Bilateral
Type of aid Contributions to specific-purpose programmes and funds managed by implementing partners
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