IEA Workshop, September 26, 2016

AfDB interventions in favor of clean Energy

Distribution of population without access to electricity by region

SOURCE: World Energy Outlook, 2015; Electricity Access Database, © OECD/IEA 2013

% of total population, 2013

53%24%

34%

31%

16%

10%

9%1%18% 0%

100% =

Africa

LatAm

South Asia2

ASEAN1 & China

Middle East Other

Population without access to grid electricity

1.2 billion 2%

World population

7.0 billion

3%

1 Association of Southeast Asian Nations. 2 Bangladesh, DPR Korea, India, Mongolia, Nepal, Pakistan, Sri Lanka, Other Asia.

<25% 25% to 49% 50% to 75% >75%

Africa is rich in energy resources and poor in energy supply

2

Biomass accounts for more than 75% of the total primary energy consumption, a major driver of emissions in sub-Saharan Africa

SOURCE: IEA

Bio-energy: dominant in the energy mix in Sub-Saharan Africa

▪ Consumption largely driven by use of biomass for cooking

▪ Despite increase in income, biomass consumption still fastest growing energy consumed

Sub-Saharan Africa primary energy mix by sub-region, 2012

78% 75% 78%85%

75%

14%

Nigeria

141 Mtoe 37 Mtoe

Other West Central

56 Mtoe

South Africa Other Southern

141 Mtoe 83 Mtoe

East

112 Mtoe 100% =

Biomass Other renewables Nuclear Gas Hydro Coal Oil

3

40

45

50

55

60

65

70

75

80

85

90

95

100

2015 2020 2025 2030

SOURCE: WEO 2014; Brighter Africa report

Businesss as usual: 45% access by 2025

Africa Power Vision: 80% access by 2040

SDG7 goal: universal access by 2030

New Deal on Energy: universal access by 2025

Africa's access to electricity, % of population

The business as usual scenario is untenable and the New Deal on Energy aspires to achieve universal access by 2025

4

Universal access by 2025 means connecting over 200 million households and nearly doubling grid generation capacity

SOURCE: WEO 2014; Brighter Africa report; World Bank

From current energy situation in Africa

To universal access in 2025

+130 M new on-grid connections

+75 M new off-grid connections

+160 GW of new capacity

1 Assuming 100% urban electrification and 95% rural electrification 2 Out of 234m households in 2015 and 300m households in 2025

Households connected, M 87 292 X3.6

Grid 83 213 x2.6

Off-grid 4 79 x20

Electrification rate, % 43% 97% x2.3

Grid capacity, GW 170 332 x1.9

Consumption kWh/capita 613 941 x1.5

1 174 Population, M 1 499 x1.3

GDP, $ bn 2 175 3 742 x1.7

Households using clean cooking, M 70 220 X3.1

+150 M with clean cooking solutions

5

Flagship programmes to support the strategic themes

Power utility transformation

Early stage project support facility

Funding catalyst

Bottom of the pyramid financing

Mobile payment

Country-wide energy sector transformations

Regional projects acceleration

Tran

sfor

mat

ive

Part

ners

hip

for

Ener

gy in

Afr

ica

Enab

ling

the

syst

em

Del

iver

ing

exec

utio

n

Get

ting

proj

ects

fin

ance

d

Scal

ing

up

acce

ss

Flagship programmes

Promote bottom of the pyramid energy access programmes

Set up enabling policy environment

Enable utilities for success

Dramatically increase number of bankable projects

Increase funding pool to deliver new projects

Roll out waves of country-wide transformations

Accelerate large-scale projects to promote regional integration

Strategic themes

IPP procurement

Renewable Energy

Energy Effciency

Clean cooking

Growing focus on Renewable Energy investments

Fossil Fuel 86%

Renewable Energy

14%

Power generation investment by technology (2009-2011)

Fossil Fuel 29%

Renewable Energy 71%

Power generation investment by technology

(2012-2014)

Focus on renewable energy

ENERGY, ENVIRONMENT & CLIMATE CHANGE DEPARTEMENT

Phase I: 2016-2020 Phase II: 2020-2030

AfDB is hosting the Africa Renewable Energy Initiative

300 GW Transformation

Comprehensive

programmes, incentives and financing

All African countries

10 GW Acceleration

Support RE projects in

the pipeline

Set the stage for Phase II

Climate Finance Facilities to support RE investments

Climate Investment Funds (CIF) - administered by the World Bank

Global Environment Facility (GEF) - financial mechanism of the UNFCCC

Green Climate Fund (GCF) - financial mechanism of the UNFCCC (accreditation in March 2016)

AfDB as the implementing

entity of global facilities

Sustainable Energy Fund for Africa (SEFA) – contribution from Denmark (DANIDA); UK (DFID); USA (USAID)

Africa Climate Change Fund (ACCF) – Contribution from Germany (GIZ)

Bilateral/Multi-donor trust

funds administered by the AfDB

The three windows of the Sustainable Energy Fund For africa

Established in 2011, SEFA is a USD 95 million Multi-Donor Trust Fund that assists African nations and Private Entrepreneurs unlocking investments in sustainable energy

Project Preparation

Window

Enabling Environment

Window

Equity Investments Window

managed

managed

With the New Deal, the AfDB support RE investments is widening

• Enabling environment through strengthening utilities for financial sustainability and rolling out of IPP procurement frameworks

• Improving bankability (risk mitigation, project development…) • Provision of PRG to backstop PPA obligations and steam supply • Funding geothermal upstream activities • Funding Government’s equity participation in PPP projects • Approving on exceptional basis on-lending of concessional

resources to project company to bring down tariff to an affordable level

• Project preparation facilities taking equity participation • Role of financial intermediaries and investment in RE and EE

opportunities (lines of credit)

• Flexible funding instruments for decentralised energy solutions are being set up

11

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