Sustainable Energy Fund for Africa Abidjan, Côte Ivoire [email protected] Acknowledgements Task Manager Carla Félix Silva SEFA Communications and Knowledge Management Expert Team Members Goran Lima SEFA Senior Project Officer Nuno Raminhos Tomé Graphic Designer Special thanks to: Chériff Seye SEFA Senior Consultant Leopold Ruppert Maria Croizat-Viallet SEFA Consultants Rahul Barua Emmanuel Boujieka Kamga SEFA GMG Experts Amoin Christiane Kouassi SEFA team assistant and thank you to all our colleagues in the PERN division and PEVP department. Division Manager João Cunha Renewable Energy Division African Development Bank Director (Acting) Daniel Schroth Renewable and Energy Efficiency department. African Development Bank

Photo credits All photos represent the African Development Bank’s work in sustainable energy and its participation in related events. Photos were taken in Tanzania, Zambia, Kenya, Uganda, Mali, and Côte d’Ivoire. Photos are courtesy of the African Development Bank, SEFA project implementation units, and Carla Félix.

3 FOREWORD

2019 was a year of a happy ending The private sector’s interest preparation, thereby enhancing the and of a promising beginning for in developing renewable energy quality and bankability of projects. the Sustainable Energy Fund for projects in Africa is manifestly I am therefore confident that Africa (SEFA), with the closure of evident from the numerous SEFA “2.0” will continue driving the first cycle initiated in 2011 as a innovations, approaches, and the sustainable energy revolution, technical assistance facility and its market-building models that and further, that, through its transformation into a larger and more continuously emerge. Unfortunately, partnerships and activities, SEFA catalytic financing platform (SEFA the enabling environments 2.0 will enormously contribute to “2.0”). Nine projects of $28 million for implementing and scaling the African Development Bank’s were approved during the year, up these innovations remain vision for energy access in including three project preparation underdeveloped, especially in Africa; one in which every African grants, two equity investment and transition countries. This constraints has access to affordable, reliable, four enabling environment activities. investment. It is for this reason sustainable, and modern energy that SEFA has been so catalytic within this decade. SEFA’s transformation in 2019 by providing capital for project is significant as its expanded toolbox now includes concessional finance instruments earmarked for the development of green mini-grids, green baseload, and energy efficiency. SEFA’s donor group has also expanded, with Sweden and Spain joining during the year. Dr. Kevin Kanina Kariuki SEFA is recognized as one of the Vice-President, Power, Energy, most active “market building” Climate and Green Growth facilities on the African continent. African Development Bank It has facilitated significant increase in the African Development Bank’s investments in renewable energy as well as energy access and is a key enabler for its New Deal on Energy for Africa (NDEA) strategy. Notable achievements include seeding flagship initiatives like the Africa Renewable Energy Fund, the Facility for Energy Inclusion, and the Green Mini-Grid Market Development Programme. It has also supported various developers in bringing their projects to fruition and advised countries in designing innovative renewable energy and energy access programmes.

4 TABLE OF CONTENTS

Foreword 2 ACRONYMS 4 EXECUTIVE SUMMARY 5 Section 1: ABOUT SEFA 6 Section 2: 2019 ACHIEVEMENTS 10 2.1. 2019 PROJECT APPROVALS 11 2.2. PROJECTS COMPLETED IN THE YEAR 17 2.3. PARTNERSHIPS AND EVENTS 20 Section 3: A YEAR OF TRANSITION 25 3.1. SEFA’s transformation into a concessional finance facility 25 3.2. Looking ahead to 2020 26 Annex 1: SEFA 1.0 Results Log Frame 27 Annex 2: SEFA 1.0 2019 Financial Statements – Summary 28

5 LIST OF ACRONYMS

AIF African Investment Forum AFD Agence Française de Développement AfDB African Development Bank AREF African Renewable Energy Fund BOAD Banque Ouest Africaine de Développement EE Energy Efficiency EIB European Investment Bank EPC Engineering, Procurement and Construction FEI Facility for Energy Inclusion ESIA Environmental and Social Impact Assessment FMO Dutch Development Bank GEF Global Environmental Facility GHG Greenhouse gas GMG Green Mini-Grid IFC International Finance Corporation MDP Market Development Program MW Megawatt NDEA New Deal for Energy for Africa NEAF Nigeria Energy Access Fund PERN Renewable Energy and Energy Efficiency department PPG Project Preparation Grant PPP Public-Private Partnership PSF Project Support Facility PV Solar Photovoltaic RE Renewable Energy RMC Regional Member Country of the AfDB SDG Sustainable Development Goals SE Sustainable Energy SEFA Sustainable Energy Fund for Africa SE4ALL Sustainable Energy for All Initiative SPV Special Purpose Vehicle UN United Nations WAFCEF West African Clean Energy Forum

6 EXECUTIVE SUMMARY

The theme of the 2019 Annual Section 1 provides context on SEFA Report -- “A Year of Transition” -- was as a multi-donor fund (“SEFA 1.0”) inspired by the restructuring of the managed by the African Development Sustainable Energy Fund for Africa Bank (AfDB or the Bank). By (SEFA) into a target $500 million the end of the reporting period, Special Fund (or as it is informally cumulative donor contributions to described, “SEFA 2.0”). SEFA 2.0, SEFA amounted to $122 million, the approved by the African Development portfolio included 60 active projects, Bank’s Board of Governors in representing an estimated 699 MW October 2019, incorporates lessons of new sustainable energy capacity to from seven years of operational be installed and over USD 1.7 billion experience and recommendations of total investment to be deployed. based on an extended consultation The technology composition of the process. The new structure is now portfolio is fairly diverse – including more aligned with the needs of the solar PV, hydro, wind, biomass, swift changing energy markets in geothermal and others. This portfolio is Africa, brings a sharper focus on also well spread across the continent, key sector themes, and introduces encompassing a total of 27 countries, more flexibility and sophistication in of which 14 are countries in transition. the financial instruments toolbox. This transformation is underpinned Section 2 provides information on by strong support and enthusiasm the nine (9) project approved and from donors, as demonstrated the (4) projects completed in 2019 by the $62 million combined across the three components. The commitment from Denmark, total amount of funding approved for Norway and Sweden to SEFA 2.0. programmes and projects reached Several pledges received in 2019 around $28 million, distributed across are expected to materialize in 2020. different parts of the continent. This section also provides information on The report provides an overview programmes and projects that were of the year in terms of project closed, as well as SEFA’s participation approvals, completion of operations, in relevant meetings and events. key meetings, and events, and finally the transformation process. Section 3 looks ahead to 2020 and beyond with the roll-out of the new SEFA 2.0 as concessional finance facility and highlights the priorities in the 2020 work program – encompassing staffing, pipeline building, portfolio management, resource mobilization, knowledge management, communications and visibility.

7 Section 1 ABOUT SEFA

Africa is simply tired of being in the dark. It is time to take decisive action and turn around this narrative: to light up and power Africa – and accelerate the pace of economic “ transformation, unlock the potential of businesses, and drive much needed industrialization to create jobs. Dr. Akinwumi A. Adesina President, African Development Bank ”

8 ABOUT SEFA

The Sustainable Energy Fund for Africa (SEFA) is a multi-donor fund hosted and managed by the African Development Bank (AfDB or the Bank), housed in the Renewable Energy and Energy Efficiency Department (PERN) under the Power, Energy, Climate, and Green Growth (PEVP) complex. SEFA was established in 2011 in partnership with the Government of Denmark and subsequently received contributions from the Governments of Italy, Norway, the United Kingdom and the United States. In 2019 Spain and Sweden joined as donors. By the end of the reporting period, cumulative donor contributions to SEFA amounted to $122 million.

SEFA’s overarching objective is to contribute to universal access to affordable, reliable, sustainable, and modern energy services for all in Africa, in line with the United Nations’ Sustainable Development Goal 7 (SDG 7).

SEFA prioritizes projects in countries with limited or no experience of renewable energy and/or limited access to climate finance instruments and supports commercial deployment Notable achievements of innovative technology with potential for replication and/or scale-up. SEFA has been a critical resource with a combined capitalization in the development of blended of $270 million at end of 2019. SEFA achieves this objective by availing financing initiatives for sustainable a range of concessional and catalytic energy in Africa, having played a SEFA has also driven the AfDB’s financing instruments to de-risk catalytic role in the launch of two engagement in the decentralized investments in renewable energy and pioneering investment funds for the renewable energy access sector, energy efficiency solutions. SEFA’s sector: i) the Africa Renewable Energy leading the Bank into an important resources serve to remove market Fund (AREF) – one of the first pan- domain of Africa’s energy future. barriers, demonstrate the viability of African equity funds for renewable The Fund’s Green Mini-Grid Market pioneering approaches, enhance the energy, which reached a $205 million Development Programme (GMG MDP) bankability of investments, and crowd-in capitalization in 2014, and (ii) the active since 2015, has evolved into a commercial finance. The conversion Facility for Energy Inclusion, (FEI), a one-stop shop to address bottlenecks of SEFA into a “special fund” in 2019 pan-African debt financing platform in the mini-grid sector through its will amplify its development impact by delivered through two independent developer and policy helpdesks, as allowing it to access a wider range of funds (off-grid and on-grid) supporting well as various market assessments financial instruments beyond the current small-scale and decentralized informing new AfDB investment scope (in section 3 of this report). renewable energy investments programmes in in several countries.

9 ABOUT SEFA SEFA Themes / Components

To date, SEFA’s operations have been categorised around three themes or components as follows:

Project Preparation Equity Investment Enabling Environment This component provides cost- This window addresses the lack of This window provided grants to sharing grants and technical access to early stage capital for small- support public sector and upstream assistance to private project and medium-sized projects, as well activities aimed at creating the developers/promoters to facilitate pre- as the low managerial and technical enabling environment for private investment activities for renewable capability of smaller entrepreneurs sector investments in sustainable energy and energy efficiency projects. and developers. The SEFA equity energy in Africa. This includes Project development activities that capital, combined with a dedicated advisory and implementation of legal, qualified for grant funding spanned technical assistance envelope, regulatory and policy regimes that from the feasibility study stage up has been deployed by the SEFA provide clear and predictable rules for to financial closure for projects. co-sponsored Africa Renewable project development, implementation Only projects with total capital Energy Fund (AREF), a pan-African and operation, capacity-building investments in the range of $30 Private Equity Fund solely focused activities to allow the public sector million – 200 million could qualify. on small/medium independent power to act as a reliable and creditworthy projects. The fund is managed by counterparty in energy projects Berkeley Energy LLC, with the and programs. This component Bank and SEFA providing oversight includes interventions spanning and collaborating on identification the off-grid, mini-grid, and grid- of projects. connected segments.

10 ABOUT SEFA

SEFA — Commitments of Projects CUMULATIVE (USD m) PORTFOLIO 60 SNAPSHOT 80

As of the end of 2019, SEFA’s portfolio MW Disbursements included 60 active projects (Figure 1) estimated (USD m) representing an estimated 699 MW of new sustainable energy capacity to 699 57% be installed and over USD 1.7 billion 45,7 of total investment to be deployed. Technologies represented in the Jobs CAPEX portfolio include solar PV, hydro, wind, (USD m) biomass, geothermal and others (Figure 2). SEFA supported operations 113 Permanent throughout all regions of the 1,720 jobs continent, with approximately half of the portfolio1 concentrated in Eastern and Southern Africa. By the end of Figure 1: SEFA portfolio snapshot GHG prevention (annually) 2019, SEFA had active projects in 27 (cumulative end 2019). equivalent of

countries, of which 14 are countries Source: SEFA operational draft progress update (Q4 2019). in transition. The active operations 80,000 per component and per country are *# of Projects includes projects tons GHG invested in by AREF. shown in the map below (Figure 5)2.

Figure 1 SEFA portfolio snapshot (cumulative end 2019) 1 Ponderation by number of projects. 2 Some of these countries have active projects in more than one component, despite not being captured in this specific Figure. 11 ABOUT SEFA TECHNOLOGY ALLOCATION* REGIONAL ALLOCATION

Western Eastern 13% 37% Hydro Solar PV 35% 29%

Multi Biomass 16% 3%

13% Central

Energy Efficiency Wind Geothermal 14% 23% 3% 6% 8% Multinational Southern

Figure 2: SEFA’s Portfolio – by Technology. Figure 3: SEFA’s Portfolio – by Region.

*Allocations are shown as a percentage of total SEFA capital deployed.

SEFA INVESTMENTS IN AFRICA

Project Preparation Access to Finance Technical Assistance Enabling Environment Policy and Regulatory Development Public Sector Support Capacity Building and Advisory Equity Investment Market Development and Preparation Private Equity Capital Technical Assistance

Figure 4: SEFA operational components Figure 4: SEFA operational components. 12 ABOUT SEFA SEFA PORTFOLIO

Tunisia

Morocco

Algeria Lybia Western Sahara Egypt

Cabo Verde Mauritania Mali Eritrea Niger Djibouti Chad Sudan Somalia

Senegal Nigeria

Rep. of the Central African South Ethiopia Gambia Republic Sudan Guinea Bissau Guinea Uganda Kenya Sierra Leone Rwanda Liberia Dem. Rep. Burundi Ivory Coast of Congo Malawi Ghana United Republic Burkina Faso of Tanzania Comoros Togo

Benin Angola Cameroon Zambia Equatorial Guinea

Sao Tome and Principe Zimbabwe Gabon Namibia Congo Botswana Madagascar

Mozambique South Africa Eswatini Lesotho Project Preparation Grants

Equity Investment

Enabling Environments

Figure 5: Active operations by Country and Component. * Country listing according to the United Nations denomination. 13 Section 2 2019 ACHIEVEMENTS

In 2019, the Bank converted SEFA into a special trust fund to widen its interventions into green mini-grids to accelerate energy access to underserved populations; green baseload “ to support clean generation capacity; and energy efficiency to optimize energy systems and reduce energy intensity. SEFA is expected to contribute to the electrification of more than 7 million households by 2030. Dr. Kevin Kanina Kariuki Vice President, Power, Energy, Climate Change & Green Growth African Development Bank ”

14 2019 ACHIEVEMENTS

THE YEAR IN REVIEW This section summarizes the major progress made by SEFA in 2019. We provide an update on new approvals and completions of projects, as well as other milestones.

PROJECTS EVENTS MEETINGS JANUARY-MARCH

Completion Appraisal Milestone

Nigeria SMEF - GEB Empower New The AREF Annual Meetings Chad Starsol Solar Energy Project The Malian week of renewable energies PV Projects The Alliance for Rural Electrification (ARE) 5th Energy Acess Investment Forum

APRIL-JUNE

Approvals Milestone

Ethiopia Renewable Africa Energy Marketplace: 3rd Edition Energy Program SEFA Audit report

JULY-SEPTEMBER

Approvals Milestone Milestone

Ethiopia Energy Access Fund 4th West African Forum Spain GMG MDP Interim Scale up for Climate and Clean joins SEFA AREF projects - 28MW Mahitsy Energy Financing (WAFCCEF) and 44 MW Tsinjoarivo Hydro Projects Djermaya Solar PV Project

OCTOBER-DECEMBER

Approvals Completion Milestone Milestone

Burundi Songa HPP PAPERM - Mali African Investment Sweden Energy Efficiency CiZO off-grid Togo Forum (AIF - 2019) joins SEFA MDP Phase 2 Kigagati 14 MW Empower New Energy Hydro PP Uganda Guinea mini-grid programme SEFA 2.0 special fund and instrument - operational procedures document Figure 6: The year in review. 15 Section 2.1 2019 PROJECT APPROVALS

16 2019 PROJECT APPROVALS

PROJECTS As indicated in Table 1, nine projects Enabling Environment (EE) category. were approved in 2019. Three The total amount of funding for APPROVED projects received project preparation programmes and projects that was IN 2019 grants (PPG), two received in Equity approved reached around $28 million. Investment (EI) and four were in the

TablePROJECTS 1. Projects approved in 2019.APPROVED IN 2019 Projects Program Country Component Amount ($) 1 Renewable Energy Program Ethiopia EE 990,000 2 Nigeria Energy Access Fund Nigeria PPG 500,000 3 Green Mini-Grid Market Development Programme — Interim Scale up Multinational EE 665,000 4 28 MW Mahitsy Hydro Madagascar EI 18,2 (m)* 5 44 MW Tsinjoarivo Hydro Madagascar EI 3,9 (m)* 6 Songa hydro hybrid Burundi PPG 990,000 7 Energy Efficiency MDP Phase 1 Multinational EE 990,000 8 Empower New Energy Multinational PPG 760,000 9 Mini-Grid Programme Guinea EE 830,000 Total 27,825 m *AREF Fund Investment

17 2019 PROJECT APPROVALS PROJECT PREPARATION GRANTS In 2019, three (3) project preparation grants (PPG) were approved for a total of $2,25 million.The three projects, Nigeria Energy Access Fund, Songa Hydro Hybrid Energy and Empower New Energy are expanded below.

Nigeria Energy Access Fund

In October 2019, a $500,000 Client Expected Target grant was approved to support the • African Development Bank Outcomes development and launch of the Nigeria in collaboration with Shell Energy Access Fund (NEAF), in order Foundation (all-on) Sustainable 110 MW to finance a feasibility study, as well as energy generation Client Type provide financial support to the expert capacity • Private Sector leading the fundraising process. Amount Awarded NEAF, a new private equity fund • $ 500,000 GHG reduced 450,000t developed by All On (a Nigerian Type of Finance Awarded (tons CO2 CO2 impact investment firm financed • Grant equivalent/year) by Shell) will make strategic investments in sustainable energy in Nigeria, particularly in the country’s On, the anchor sponsor of the solutions for sustainable energy burgeoning decentralized energy Fund, is expected invest $ 5 million. projects in Nigeria and complement sectors. NEAF is expected to the Bank’s ongoing initiatives in become a $ 100 million climate NEAF’s objective is to invest in the sector in Nigeria, including impact fund that will undertake companies developing off-grid the Nigeria Electrification Project equity/quasi-equity investments in solar, mini-grid, commercial and (NEP) and the Facility for Energy small- to medium-scale sustainable industrial, and small-scale renewable Inclusion. Besides contributing to energy projects with potential of IPP solutions – all of which facing the increase of access to energy, having positive impact on both, obstacles to capture equity from the fund is expected to have positive climate change and access to local and foreign investors to environmental impact, by displacing sustainable energy. The AfDB and scale-up. Through NEAF, the Bank pervasive diesel generation systems, ElectriFi is a potential co-sponsor will be in a position to address and social impact, through job and anchor investor, whereas All a deficit of commercial equity creation (including for women).

18 2019 PROJECT APPROVALS

Burundi Songa hydro hybrid

Client • Songa Energy Burundi SA Client Type • Private Sector Amount Awarded • $ 990,000 Type of Finance Awarded • Grant

Expected Target Outcomes

Sustainable 10 MW energy generation capacity

Jobs created 262

GHG reduced (tons CO2 20,000 equivalent/year)

Investment $30 million leveraged

Households The project envisages two power MW — and the Mule037 project in connected 20,000 plants, each featuring a solar and Songa Commune of Bururi province (estimation) hydroelectricity component, as well — with a potential capacity of 8 MW. as establishing a local distribution Population 120,000 network and an interconnection to Both plants shall feed electricity to benefited (50%) the national grid. SEFA is financing a mini-grid, with surplus production (% Women) the required feasibility studies— supplied to the national grid. The including a solar hybridization solar-hydro hybrids are expected In December 2019, a $ 990,000 grant assessment, grid interconnection to (i) mitigate the impact of the was approved for the development studies and local distribution grid expected increasing number of of a 9MW solar-hydro hybrid project assessments — as well as the droughts caused by climate change; in Burundi. The intervention is being financial advisory services that (ii) balance the levels of power developed by national hydroelectric are required for the project. The output during dry and wet seasons; developer Songa Energy and private project covers the environmental (iii) diversify Burundi’s generation investment firm Virunga Power, with and social impact studies (ESIA) for mix and; (iv) reduce the tariffs power to be supplied to state-owned the Ruvyi102 project in Ryansoro through hybridization — noting that electric utility REDIGESO and to Commune of Gitega province — with the introduction of the solar PV communities through mini-grids. a potential installed capacity of 1.07 reduces costs.

19 2019 PROJECT APPROVALS

Empower New Energy

Client • Empower New Energy Client Type • Private Sector Amount Awarded • US$ 760,000 Type of Finance Awarded • Grant

Expected Target Outcomes

Sustainable 580 GWh energy generation capacity

Jobs created 320,000

GHG reduced (tons CO2 320,000 equivalent/year)

Investment $500 leveraged million

In December 2019, a $760,000 due diligence, environmental and projects will be refinanced with grant was approved to Empower social impact assessment, quality debt at portfolio level. EmNEW has New Energy AS (EmNEW), an assurance and risk management. successfully raised in 2019 a series impact fund manager sponsoring a A round of equity with investments $50 million small-scale renewables EmNew aims to unlock small from Norfund and ElectriFI. equity fund, to the support project IPP and mid-size C&I projects by preparation of at least eight small- entering into a partnership with EmNEW focuses on solar power, scale projects with capacity local and international developers hybrid, and hydro technologies, ranging from 1-10 MW towards during late-stage development with a pipeline of projects in bankability and construction. phase to increase bankability of Ghana, Kenya, Ethiopia, Tanzania, The grant will support a broad the projects, and subsequently and Rwanda. These interventions range of project preparation and provide equity to fully cover are expected to unlock renewable development activities, including project-level construction costs. energy investment, reduce CO2 technical feasibility studies, legal After initial operating period, the emissions, and create new jobs.

20 2019 PROJECT APPROVALS

EQUITY INVESTMENT The Africa Renewable Energy Fund (AREF) is managed by Berkeley Energy Africa Limited (Berkeley Energy), a fund manager focused on developing and investing in renewable energy projects in emerging markets. AREF invests in small hydro, geothermal, solar, and biomass projects across Sub-Saharan Africa, excluding South Africa.

Both projects are owned and aligned with the Government’s long-term strategy of replacing expensive thermal power generation with less costly and more reliable hydropower.

Madagascar Hydro Portfolio

In December 2019, through anticipated to produce an mestimated Expected Target Madagascar Hydro Holdco (MHH), annual generation output of 124GWh. Outcomes AREF completed the acquisition of a 35% stake of Tozzi Green The project’s features comprise SpA’s (TG) Madagascar renewable a 4.2m high dam structure, four Sustainable energy business. This included fiberglass-reinforced penstocks, each energy generation 124GWh 18.9MW of operating hydro capacity with a total length of nearly 700m and capacity (year) (Sahanivotry and Maroantsetra), a powerhouse adjacent to Ikopa River 28MW construction project at Mahitsy with four Francis turbines. (MH I), plus a pipeline of projects at Jobs various stages of development within As part of the Madagascar portfolio, created 1000 or adjacent to the MH I project area AREF is developing thethe 44 MW (2020) (the Mahitsy Development Projects). Tsinjoarivo Hydro project which is under development and is expected AREF fund committed $18,2 m to start in 2021. This is envisaged to for the construction of run-of- be a run-ofriver hydro power project river hydropower 28 MW Mahitsy located on the Onive River, 40km The design involves a 3.5m high project located on the Ikopa River, east of Ambatolampy in central diversion weir and a c.500m long 35km north-west of the capital, Madagascar. The project site was tunnel to be excavated under the Antananarivo. The project is under selected by the Ministry of Energy and Rova and aims at strengthening the construction, with completion is located adjacent to the upstream transmission grid in a weak area expected in 2021. The project is of the Ambavaloza falls. between Tana and Antsirabe.

21 2019 PROJECT APPROVALS

ENABLING ENVIRONMENT In 2019, the following projects were approved in the context of Enabling Environment (EE): Green Mini-Grid Market Development Programme — interim scale up; Ethiopia Renewable Energy Programme; Guinea Mini-Grid Programme; Energy Efficiency Market Development Programme.

Green Mini-Grid Market Development Programme – Interim scale up

Client SEFA expanded the GMG MDP with Since 2015, the programme as a • N/A a $665,000 contribution in 2019 to whole has: (i) Penned the “GMG continue the expansion of the mini- Africa Strategy”—formally adopted Client Type grid industry in Africa. The GMG by the African Union; (ii) Published • N/A MDP is the Bank’s flagship technical 15 in-depth, country market Amount Awarded assistance initiative strengthening intelligence briefs assessing the • US$ 665,000 Africa’s mini-grid industry, and is market, regulatory, and investment Type of Finance Awarded organized across five business lines: climate for mini-grids; (iii) Provided • Grant (i) Market Intelligence, (ii) Business over 110 mini-grid developers in 36 Development Support, (iii) Policy countries with hands-on advisory Expected Target and Regulatory Support, (iv) Quality support, resulting in approximately Outcomes Assurance, and (v) Access to Finance. USD 100 million of cumulative investments; (iv) developed “best The interim scale-up phase expands practice” knowledge products, Sustainable the support provided under the including themes such as national energy generation 44 MW Market Intelligence, Business policy development, the promotion capacity installed Development and Policy Support, of productive uses of energy, and (indirect) and Quality Assurance business lines. business model design. Four additional market assessment Household reports will be undertaken, focusing The Green Mini-Grid Market connections 40.000 on under-explored markets (Niger, Development Programme continues (indirect) Chad, Guinea, and Angola). Business to be an important resource for the development and policy support will be industry. SEFA intends to grow and Investment extended to 40 additional developers expand its support for mini-grids in leveraged 100 million and policymakers in 3 additional 2020 and beyond, with an enhanced (indirect) countries, and the Africa Mini-Grid focus on accelerating investments Quality Assurance Framework through the development of country- will be piloted with government wide programmes, de-risking counterparts Nigeria and adapted facilities, and other forms of market for replication in other markets. building support.

22 2019 PROJECT APPROVALS

Ethiopia Renewable Energy Program

The $995,000 grant approved in May the AfDB as potential financier by Client 2019 will contribute to strengthening May 2021. The project aims to • Ethiopia Renewable the government’s capacity to undertake complement the provision of technical Energy Program bankability and technical analysis, assistance for the development of IPP/ Client Type including feasibility assessments PPP procurement framework by the • Public Sector of projects in the hydro priority Bank’s Institutional Support Project Amount Awarded pipeline. The project comprises two (US$ 1.7m, ADF Grant approved in • US$ 995,000 components, namely: (i) operational May 2015) as well as and the technical support to roll-out IPP procurement; assistance support under the Mekele- Type of Finance Awarded project preparation and transaction Dallol and Semera-Afdera Power • Grant advisory; and provision of capacity Supply for Industrial Development and building; environmental and social Access Scale-up Project (UA 74.8m, impact assessments; resettlements ADB Loan approved in July 2016). Expected Target action plans; and the preparation of Outcomes bidding documents for hydro projects. The grant main objectives are, rolling Increased out the new procurement framework private sector 15% The purpose of EREP-I (Ethiopia for IPP/PPP of selected RE hydro participation by 2025 Renewable Energy Program —Phase projects and provide hand-on training I) is to unlock private sector investment and capacity building. This intervention Increased energy by IPPs in RE by having at least two is supported by the legal advisory generation 500 MW transactions reaching financial closure services for IPP/PPP, undertaken by capacity under the new framework and having the African Legal Support Facility. GHG reduced (tons CO2 4,42 MT equivalent/year)

23 2019 PROJECT APPROVALS

Guinea Mini-Grid Programme

The $830,000 grant aims to support Finally, this technical assistance Client finance technical, economic, financial, will help to mobilize the additional • Guinean Rural Electrification and environmental and social pre- financing necessary for these Agency (AGER) feasibility studies of green mini-grid mini-grids and will contribute to Client Type projects. These are the projects the development of the related • Public Sector identified in the Least Cost Electrification regulations. These services, together Plan developed by the government of with advice and knowledge transfer, Amount Awarded the Republic of Guinea in coordination will be necessary for AGER to better • $830,000 with the World Bank and the Agence coordinate and develop the sectoral Type of Finance Awarded Développement Française (AFD), who approach to mini-grids in the country. • Grant have allocated funding of approximately $7 million to the programme.

The intervention will support AGER on the evaluation of bids from the private sector and on negotiations of construction, operation and maintenance contracts for mini-grids resulting from the call for tenders that will be launched by the World Bank.

Expected Target Outcomes

Mini-grids 57 deployed

Households 30,000 benefited households

Jobs created 100 (% women) (50%)

Production At least opportunities 100 for micro small businesses

24 2019 PROJECT APPROVALS

Energy Efficiency Market Development Programme - Phase 1

The $990,000 grant approved Client Expected Target in December for the Energy • TA for policy makers and Outcomes Efficiency (EE) Market Development other public entities like EE Programme (MDP) phase I, is a agencies, national utilities, or GHG reduced 6.8 tCo2e regional, multiphase program that municipalities. (tons CO2 equivalent/year) will seek to address the barriers to Client Type energy efficiency investments through • Public Sector the delivery of a range of quickly Jobs created 4000 Amount Awarded deployed, complementary technical (% women) (40%) • $990,000 assistance (TA) and capacity development to public and private Type of Finance Awarded Energy savings 200,000 sector stakeholders. • Grant from new policies, MWh/year programmers and The MDP will support RMCs in investments investigating opportunities for EE measures, the building sector (MWh/year) programs and financing options in including residential appliances and the residential, public, commercial, cooling equipment will be an area of During phase one of the EE MDP, a and industrial segments based focus with a view to enable market Policy and Programs Helpdesk will on the countries’ priorities. transformation to highly efficient be established which will complete The MDP will support interested equipment and phasing out inefficient up to six TA assignments with public countries in evaluating the benefits of and old equipment. entities to design effective public specific solution and implementation EE programs. A dedicated “Africa options while for countries that are The EE MDP will contribute to the EE Knowledge Hub” will also be less advanced the focus will be on development of climate resilient, established within the Africa Energy appropriate policies, strategies, and affordable, and financially sustainable Portal to provide a consolidated institutional setup. In terms of the energy systems focusing particularly source of EE market intelligence. focus of specific energy efficiency on EE’s role in utility transformation.

25 PROJECTS COMPLETED IN THE YEAR

PROJECT As indicated in Table 2, four technical assistance projects were completed in 2019, including three (Project Preparation) and one (Enabling Environment). APPROVED IN 2019

Table 2. Projects completed in 2019.

Projects Program Country Component Ammount ($) 1 Waste to Ethanol and cookstoves Nigeria PPG $580,000 2 Starsol Solar PV Chad PPG $780,000 3 Renewable Energy Promotion (PAPERM) Mali EE $740,000 4 CIZO off grid Togo PPG $975,000 5 Africa Renewable Energy Fund (AREF) Multinational EI $25,500,000 Total $28,575,000

PROJECT PREPARATION GRANTS Nigeria Waste-to-Ethanol and Cookstoves Client In December 2014, the $ 580,000 distribution in Nigeria, to fully harness • Small and Medium grant was approved for the expansion economies of scale. The expansion Entrepreneurship Fundamentals’ of the Green Energy and Biofuels entailed growing biogel production Green Energy and Biofuels (GEB) bio-refinery project. The capacity from 1,000 to 30,000 litres/ project is a pilot of Small and Medium day and ramping up the cookstove Client Type Entrepreneurship Fundamentals manufacturing supply chain four-fold • Private Sector (SMEFunds), a social enterprise over three years. Amount Awarded and the first bio-energy cooking fuel • $ 580,000 production facility and distribution In addition to providing grant funding, Type of Finance Awarded network in Nigeria. the AfDB played an advisory role • Grant throughout mimplementation, which The SEFA grant was aimed at financing will be key to attract other financial the technical studies, business advisory partners, catalyze the first stage services and a full environmental and of the GEB scale-up plan, and lay social impact assessment in support the foundations for the involvement of the scaling-up of SMEFunds/GEB of AfDB in the project financing of operations, particularly the waste-to- the second phase. The GEB team ethanol cooking fuel production and has raised a total of $4.5 million.

26 PROJECTS COMPLETED IN THE YEAR

Chad Starsol Solar PV

In March 2015, a $ 780,000 validated by the AfDB. The project Client preparation grant was approved was closed in 2019 before it could • Consortium Ciec Monaco for the development of a first phase be completed, as a result of the Newsolar Invest Sarl 40 MW of Starsol* Solar PV Plant Government’s decision to prioritize Client Type near N’Djamena in Chad as the another project (the Djermaya project). • Private Sector first Independent Power Producer Amount Awarded (IPP) scheme to be connected to The Djermaya 28 MWe Solar PV • $ 780,000 the national grid. The SEFA grant Independent Power Producer project, was aimed at financing the costs which forms part of the Desert to Type of Finance Awarded related to technical assistance for Power initiative, involves the purchase • Grant the completion of the plant design by the Societé Nationale de l’Electricité and grid study, as well as advisors (SNE) of the power generated by a power producer Djermaya CDEN for legal and financial structuring of solar PV power plant in Djermaya, Energy. The electricity will be sold a bankable IPP. under a 25-year Power Purchase to the grid at an initial tariff of XAF 79 Agreement (PPA). per kWh. The Partial Risk Guarantee The grid study confirmed the best offered by the African Development connection points around Ndjamena, This PV power plant will be Fund (of around EUR 10,000,000) based on static and dynamic analysis, implemented on a build-own-operate- will mitigate the risk of non-payment the recommendations of which were transfer basis by the independent by SNE.

Togo CIZO Off-Grid

In August 2017, a $975,000 grant making electronic money available in Client was approved for CIZO project in the most remote rural communities • Agence Togolaise de Togo. The first phase of the rural and create a solar academy in l’Electrification Rurale (AT2ER) electrification programme (CIZO) each region. Beyond the ambition Client Type had as an objective the creation of raising the rural electrification • Public Sector of conducive conditions to attract rate from 6 to 35%, the initiative the private sector interested in was aimed at encouraging the Amount Awarded investing in decentralised energy mass adoption of mobile payment • $ 975,000 service operators through off-grid solutions in rural areas to facilitate Type of Finance Awarded electrification by domestic solar kits. the inclusion rural populations. • Grant

The project targeted the deployment Main achievements include: (i) (iv) increased incomes for agents, of 300,000 individual solar units increased extension of territory (v) five regional solar academies in over a 5-year period in the PAYGO (including remote areas) where charge of training and certifying local mode, in remote rural areas using e-money transactions are available, installers and technicians created, mobile payment technologies. even where mobile money transaction (vi) availability of a qualified and SEFA‘s intervention would allow points are nonexistent; (ii) distance equipped workforce to install and setting up a national network of between mobile money transaction ensure maintenance of solar kits (the mobile payment agents (recruitment, points reduced; (iii) increased use of technicians are recruited by the solar training and certifying technicians) mobile technology to cover the social kit distribution operators for their to enable PAYGO operations by and financial needs of the population, activities), (v) 3,000 jobs created.

27 PROJECTS COMPLETED IN THE YEAR

Equity Investment Africa Renewable Energy Fund

AREF is one of SEFA’s success FMO, GEEREF, GEF, IFC, and OeEB) Client stories, not just in terms of the but also from African institutions • Berkeley Energy (Fund direct investments it generated, but (EBID, BOAD) and some commercial Manager) more broadly through the innovative investors such as Calvert, Humming Client Type features and unique lessons it has Bird, Sonen and Wallace. This was • Private Sector provided to AfDB and the market a major achievement at a time at large. where renewable energy was largely Amount Awarded unproven in the African continent. • $ 25,500,000 (+ $10 million SEFA equity contribution of $25.5 This structure has been a case-study TA facility and $65 million PSF million approved in December 2012 of blended finance at AfDB and a facility) to the African Renewable Energy model for other funds. An evolution on Type of Finance Awarded Fund (AREF) was fully disbursed by this structure is expected in AREF II. • Equity end of 2019. This contribution was part of a total $205 million capital AREF was also the first private raise closed by October 2015 to equity fund in the African market building developer platforms support small- to medium-scale with a clear early-stage project rather than pursuing projects independent power producers development mandate, supported opportunistically. The Uganda (IPPs) in Sub-Saharan Africa in by a SEFA-funded $10 million TA and Madagascar hydropower grid-connected development stage Facility, which has translated into companies are a testimony to renewable energy projects including building local developer teams in small hydro, geothermal, solar support of pipelines and portfolios and biomass. of small hydro generation assets.

AREF was originally conceptualized Last but not least, AREF pioneered a with a $1 million SEFA project unique “secondment programme” for preparation grant approved in 2012, young African talents, entailing work paving the way for a combined $55 placements within the team of junior million anchor investment from AfDB, staff of partner organizations, notably SEFA and GEF by December 2012 the Africa Biofuel and Renewable and creating a blueprint for developing Energy Corporation (ABREC), a fund similar initiatives, most notably the co-sponsor holding a stake in the GP. Facility for Energy Inclusion with its two debt funds (FEI Off-Grid and AREF’s investments have delivered FEI On-Grid) and the Nigeria Energy to date a total generation capacity Access Fund under development. of 73MW (Uganda Achwa II and Kikagati small hydro projects), The blended finance structure with created of 113 permanent jobs, a SEFA catalytic tranche providing a the prevention of 26,145 GHG return enhancement mechanism has significant hands-on technical tonnes. Once all investments have enabled a generous capitalization support to project developers as matured, AREF will have contributed of US$ 205 million not only from well as capacity-development of to 550 MW of new capacity spread international development finance policy-makers. AREF has additionally over 14 projects in 6 countries. institutions (including BIO, CDC, EIB, pursued a unique strategy of

28 PROJECTS COMPLETED IN THE YEAR

Enabling Environment Mali Renewable Energy Promotion (PAPERM)

In August 2014, a $530,000 grant was and raising more financing to Client approved to AER to strengthen the scale up the renewable energy • Agence Malienne pour les environment for private investments investment in Mali. As part of the Energies Renouvelables (AER) in renewable energy in Mali. SREP program, AfDB was also Client Type SEFA supported targeted policy, involved in the development of a mini • Public Sector legal, regulatory, and institutional hydroelectricity project and a solar frameworks, as well as capacity building Photovoltaic independent power Amount Awarded for a targeted audience engaged in producer project in the country. • $740,000 developing, financing, and operating Type of Finance Awarded renewable energy power projects. The development of policy documents, • Grant including the revised National The SEFA component is part of a Energy Policy, National Strategy training modules were organized for wider project of renewable energy for the Development of Renewable 30 people – on project management, in Mali (PAPERM)3 in the context of Energy, National Strategy for the Public Private Partnership, Tariff the country’s Scaling-Up Renewable development of energy efficiency, Modelling and Energy Planning. Energy Program (SREP) with a total framework for the development of project cost of approximately $ 2.6 Rural Electrification were developed These endeavours will promote million, also funded by the SREP and presented for adoption. private sector participation in ($1.5 million) and the government the country’s renewable energy ($0.4 million). During implementation, Other documents such as a concession sector and pave the way for the the AfDB supported the Ministry of template, Power Purchase Agreement success of the Bank’s Desert Energy in preparing and implementing and investor guide were also produced to Power and Sustainable activities, channelling SREP funding, and duly validated. Moreover, four Utility transformation initiatives.

3 The PAPERM project has three components: the first will aim at improving the policy, legal, regulatory and institutional environment to promote investment in renewable energy; the second is focused on capacity building, knowledge management, communications and advocacy for renewable energy; and the third will strengthen the monitoring and evaluation processes of the sub-sector, and the programmatic approach under SREP-Mali. 29 PARTNERSHIPS AND EVENTS

Partnerships are crucial to the achievement of SEFA’s goals and ambitions, and the Bank is grateful for the fruitful collaboration with a broad range of stakeholders working towards the development of transformative financing initiatives in Africa’s sustainable energy sector. These are too many to mention by name, but include donors, private sector developers, investors, multilateral agencies, civil society organizations, industry organization and, last but not least, the regional member countries themselves. The diversity of partnerships allows SEFA to build on dialogue, knowledge, and previous experiences, which drive systemic change in the direction of its ambitions. Many of these partnerships are forged around continent-wide events.

30 PARTNERSHIPS AND EVENTS In 2019 the SEFA team participated in the events and meetings highlighted below:

Semaine malienne des énergies renouvelables — Bamako, Mali, 19-23 February 2019

The first edition of the Malian Government structures, partners, one of the most important of the Renewable Energy Week entitled private sector and public in general year in Mali, and one of the most “Let’s invest sustainably in the and discuss the main challenges in important business forums in sub- energy future of Mali” was organized the sector. Saharan Africa in 2019. by the Renewable Energy Agency of Mali (AER-Mali) and the Malian In the presence of nearly 750 Ministry of Energy and Water, as investors in solar, biomass, biofuels, “This initiative first made it part of the SEFA-supported project wind power, energy efficiency and possible to publicize the potential “Promotion of Renewable Energies micro-hydroelectricity, from several of renewable energies in Mali, as in Mali” (PAPERM), co-financed four-way partners from other well as the regulatory legislative with the Climate Investment Funds continents, and with five days texts encouraging investors to (CIF/SREP).The main objective of thematic conferences and 47 come to Mali to invest in the field of this forum was to raise public stands of companies (national and of renewable energies” awareness about the potential of international) at the forefront of the Thera Aminata Fofana renewable energy in Mali. It was also development of sustainable energies, National Energy Director an opportunity to bring together the this event 2019 was positioned as

31 PARTNERSHIPS AND EVENTS

The Alliance for Rural Electrification (ARE) — 5th Energy Access Investment Forum Abidjan, Côte Ivoire, 13-14 March 2019. The Forum, organized by ARE and 260 participants from 48 countries. initiatives, provided an opportunity to AfDB, and supported by GET.Invest, Meaningful conversations took place discuss market trends and innovations SEforALL, ClubER, ECREEE and around the context of accelerating and availed a platform to build UNIDO, convened public, private rural electrification, with a particular partnerships and foster new business and other stakeholders with the emphasis on private sector led mini- relationships. The SEFA Coordinator goal to boost clean energy access grids, with the goal of progressing joined the panel to discuss international globally and Africa in particular, with sustainable energy access financing initiatives and discussed the where 588 million people still lack goalsin Africa. The Forum showcased SEFA transformation process and electricity. The event convened over the latest energy accessfunding increased focus on mini-grids.

32 PARTNERSHIPS AND EVENTS

Africa Energy Market Place: 3rd Edition Abidjan Cote d’Ivoire, 25th — 26th June 2019. The Africa Energy Market Place exchange, networking, and peer-to- Southern Africa (DBSA), International (AEMP) is the Bank’s energy sector peer learning. The 2019 edition of Finance Corporation (IFC), World platform, designed to remove barriers the AEMP also provided nuanced Bank (WB), Japan International to private sector investments in focus on sector issues in Angola, Cooperation Agency (JICA) and the energy, and accelerate energy sector Botswana, Democratic Republic of European Investment Bank (EIB), reforms and project execution. AEMP Congo, Ghana, and Madagascar. among others, attended this meeting. convenes a tri-partite energy sector Over 300 participants, comprising dialogue between governments, governments, senior leaders in the private sector players, development energy sector and development “WAFCEF is all about preparing a partners, to address investment risks finance institutions, including solid business plan for engaging and bottlenecks through knowledge Power Africa, Development Bank of with financiers. In this regard, all participants in WAFCEF are winners from the start.” João Cunha Renewable Energy Division Manager African Development Bank

The two-day event entailed in the preparation and delivery of with the presentation of preliminary boardroom meetings, panels, the event, in particular preparing findings of a SEFA-funded study. bilateral meetings, partner side and co-chairing the Angola SEFA is currently supporting several sessions and networking. In Boardroom, participating in the activities agreed at AEMP, notably addition, various knowledge events DRC and Madagascar Boardroom the IPP procurement programmes focused on project preparation, discussions, co-organizing an event in Ethiopia and Angola. Other key transmission and energy finance, on project preparation finance with takeaways include pledges to and energy sector regulation. DBSA and co-organizing an event support mini-grid scale-up efforts SEFA team was actively engaged on local currency financing in Africa, in Angola, DRC and Madagascar.

33 PARTNERSHIPS AND EVENTS

4th West African Forum for Climate and Clean Energy Financing (WAFCCEF) — Abidjan, Côte Ivoire, 26 September. AfDB/SEFA co-organized the 4th grids, waste to energy, waste Network and organized with other edition of the West Africa Forum recycling, and clean cooking fuels. partners such as the ECOWAS Centre for Climate and Clean Energy The final round of finalists was for Renewable Energy and Energy Financing (WAFCCEF). Originally judged by representatives from major Efficiency, the ECOWAS Bank for launched in 2013, WAFFCEFF is international organizations including Investment and Development and the a business plan competition for investors, industry specialists and African Biofuel and Renewable Energy investment-ready projects sponsored business executives with a keen Company. Noteworthy that SEFA has by West African entrepreneurs interest in enabling cleaner and provided project preparation grants addressing critical energy access greener projects in West Africa. FIRST to previous winners: Wave2o, a wave and climate mitigation issues. The WATT Renewables, a Nigeria-based energy for water desalination in Cape 2019 competition showcased eight company providing clean energy to Verde Green Energy and Biofuels, a investment-ready projects originating telecom infrastructure in Nigeria using Nigeria cookstoves and sustainable from Côte d’Ivoire, Ghana, Togo, solar mini-grids, was selected as the bioethanol business. Additionally, the Cameroon, and Nigeria. Projects best investment ready project among Bank is financing one other previous presented highlighted opportunities eight finalists. The event is sponsored winner, the Singrobo Hydropower in technologies such as solar mini- by the Private Financing Advisory project in Cote d’Ivoire.

34 PARTNERSHIPS AND EVENTS

African Investment Forum (AIF — 2019) Johannesburg, South Africa, 11-13 November. The Africa Investment Forum is Africa’s The last project was SPARK+ Africa The Bank also hosted, in the margins (AIF) investment marketplace —a multi- Clean Cooking Fund, a first-time impact of the Forum, meetings of the Mini- stakeholder, multi-disciplinary platform investment fund to invest in companies Grid Partnership chaired by the Ag. dedicated to advancing projects to the throughout the clean cooking sector Director of the Renewable Energy bankable stage, raising capital, and and value chain in Sub-Saharan Africa. Department and the Mini-Grid Funders accelerating the financial closure of The event was well attended by various Group. This provided an opportunity to deals. AIF helps businesses mobilize development finance institutions showcase some of the achievements financial resources to catalyse private who were interested in investing of the SEFA financed mini-grid work. sector development through the subject to availability of catalytic “boardroom sessions” where project capital providing loss protection. This Equally important, SEFA featured promoters pitch to a curated audience project is in the SEFA pipeline for a prominently in global events, i.e. One of investors4. The 2019 edition included concessional investment in 2020 Planet summit in Nairobi in March; pitches from three projects from the under the SEFA 2.0 configuration. the High-Level Dialogue on the SEFA Universe. Implementation of the UN Decade of Sustainable Energy for All 2014-2019 “This project would be a first The first was Cape Verde Wave2O™ in New York in May; and the 2019 UN worldwide. After it materializes, is the world’s first wave-driven Climate Action Summit in New York Cape Verde could become desalination system, which is expected in September. an industrial platform for such to operate completely “off-grid” and innovative technology, first in the supply ca 50,000 people with clean ECOWAS region then globally.” fresh water at competitive cost5. The event was well attended, with significant Olivier Ceberio investor interest received, including Founder Wave2O™ from AfDB as lender, but contingent on the completion of the feasibility studies funded by SEFA and successful first commercial deployment.

The second was the Nigeria Energy Access Fund, a USD 100 million Nigeria-focused private equity fund investing in off-grid solar, green-mini- grid, captive solar and small- scale renewable energy IPP Projects. The anchor sponsor is All-On, a Nigerian impact investment company seeded by Royal Dutch Shell, with the AfDB and ElectriFi as potential co-sponsors of the Fund. Prospective investors welcomed initiative, underscoring the need for conclusion of SEFA-funded preparation stage, notably the fund manager recruitment, final fund design and blended capital structure, prior to making investment commitments.

4 AIF-2019 included 56 boardroom deals valued at $ 67.6 billion tabled and was attended by over 2,221 participants, including high level guests, from 109 countries, including 48 from Africa. 5 Benefitting with a SEFA support through a project preparation grant approved in 2016. 35 Section 3 A YEAR OF TRANSITION

SEFA is not just a vehicle that has potential for significant impact on driving renewable energy projects forward in Africa. It also offers a means to influence governments “ through AfDB, and to coordinate donor efforts in structuring support to the renewable energy sector (…) As SEFA grows, more donors are likely to join, and therefore more priorities and agendas will be tabled. Assessment of the AfDB Sustainable Energy Fund, KPMG, 2019 ”

36 A YEAR OF TRANSITION 3.1 — SEFA’s transformation into a concessional finance facility In November 2019, the Bank’s Board The concessional investment will health, water and environment. of Governors approved SEFA’s include loan and equity instruments Core indicators and anticipated conversion from a multidonor trust — often blended with AfDB development outcomes of SEFA fund into a “special fund” (SEFA 2.0), investments — to improve risk/ 2.0 include: (i) commercial finance effectively upgrading SEFA to provide return profile and overall bankability. leveraged by the project; (ii) MW a wider range of financial instruments, For all projects, due consideration will of sustainable energy generation so as to catalyze larger amounts be given to aspects of economic installed (and/or degree of energy of private investments and support and financial viability, namely through efficiency achieved); (iii) new jobs energy transition at scale across strong support to national plans and created, disaggregated by gender, the continent. strategies, cost-competitiveness and; (iv) annual GHG emission and quality of service, ability to reductions delivered. SEFA 2.0 will focus on three areas: generate returns and attract green mini-grids, to accelerate energy commercial investors. access to underserved populations, “The new structure of the primarily through programmatic The new structure incorporates special fund responds to the interventions; green baseload, to lessons from SEFA’s seven years demand from external clients support increased penetration of of operational experience, including and the Bank’s teams for renewables through the identification focusing efforts in countries in transition catalytic support, and sufficiently and deployment of “greener” power and/or with limited renewable energy accommodates market needs alternatives to baseload fossil-fuel experience, supporting projects with arising from the transformation of generation options; and energy high replication potential and “first- the renewable energy landscape efficiency, to optimize energy of-a-kind” features, and enabling in African countries.” systems and reduce energy intensity. models that capture significant cross-cutting benefits across several Dr. Daniel Schroth The green baseload (GBL) component domains such as agriculture and Acting Director for Renewable will pave the way for new endeavors food security, education and job Energy and Energy Efficiency contributing to the enhancement of creation, social inclusion and gender, African Development Bank penetration of renewable power in the African grids in more challenging settings. GBL will be implemented in coordination with other Bank’s flagship initiatives “Desert to Power” — deploying solar power across the Sahel countries - and the “Sustainable Utility Transformation” — improving utility management and performance, quality of power supply and services, sector planning, and regional power interconnection and trade.

This support will be availed through technical assistance and concessional investments. Technical Assistance grants (in some cases reimbursable) will be available to public and private sector entities and will target activities that will directly unlock investments.

37 SECTION 3.2 LOOKING AHEAD TO 2020

38 A YEAR OF TRANSITION 3.2. Looking ahead to 2020

The 2020 plan reflects the priorities 2020 is expected to be a transition green baseload, green mini-grids for the “inaugural” year of SEFA as a year, in which continued effort will be and energy efficiency. New financial Special Fund with a broader mandate made to implementing legacy activities, instruments will also be tested and (SEFA 2.0) and lays the foundations for while also developing project pipelines further refined in the course of the year delivery over the 10-year term of SEFA. that reflect the new strategic direction: and inform a revision of the Operational Procedures by the end of the year.

More specifically, key priorities for 2020 include:

Staffing Resource Mobiliation The SEFA team will be strength- Continued effort to on-board ened with the recruitment of four new donors as well as to (4) SEFA-funded staff positions mobilize resources include with technical, financial and funding proposals (co-financing project management competen- arrangements) to global facilities cies. Consultants to be recruited to be deployed under the SEFA for key support roles, namely Strategic Framework and knowledge management Operational Procedures. and communications.

Pipeline Building Knowledge Identification of technical management assistance and concessional Continued improve- investment operations in line ment in monitoring, with new strategic frame- evaluation, and work. Avenues to be reporting activities. explored include “Pitch your Specific focus on Project”, an internal call for identifying and docu- proposals from Bank staff menting lessons driving energy operations, and insights from and through public-private selected projects. dialogue platforms such as Africa Energy Market Place and Africa Investment Forum.

Portfolio management Communications Continued support to the Development of a new corporate implementation of legacy projects, image, creating a website and with the view to achieve successful donor portal, regular press completion and retirement from SEFA’s articles on new approvals and portfolio. Reduction of projects at risk success stories from the ground, through intensive supervision and partial/- while participating and full cancellations where appropriate. sponsoring key sector events.

39 ANNEXES

40 Annex 1 SEFA 1.0 RESULTS LOG FRAME RESULTS CHAIN PERFORMANCE INDICATORS Indicator Baseline Target Actual Commitments based Values on projects approved

Promoting job creation, Energy Development Index 2012 HDI N/A N/A N/A private sector led growth, (EDI) Human Development value and and human development Index (HDI)* EDI value IMPACT by sustainable (affordable, for each reliable, clean) energy country

Access to modern energy New connections 0 150000 102,287 1,010,848 increased for SMEs and (number) for project (2012) (2018) household Funding raised for RE Total volume (of equity and 0 1,000 410 1,700 / 5,072

OUTCOMES projects (financial debt raised for RE projects $ (2012) (2018) leverage) million) for component 1 and 2

Increase in RE in the Aggregate installed RE 0 500 88 600 / 2,917 energy mix capacity (MW) for component (2012) (2018) 1 and 2

Direct employment Jobs created at project 0 450 267 30,024 creation (sector/project level) sites (number) (2012) (2018)

Reduction/avoidance of CO2 equiv. saved through 0 3,000,000 40,000 12,000,000 GHG emissions (project level) use of RE (tons) (2012) (2018)

RE projects supported by No. of projects receiving 0 4 1 27 SEFA reaching financial Project Preparation Grants (2012) (2018) close reaching financial close - 1 project/year RE projects receiving No. of PPGs awarded - 4-6 0 30 22 22

OUTPUTS — I preinvestment assistance new PPGs/year from 2013 to (2012) (2018) from SEFA 2018

RE projects receiving Committed capital invested (%) 0 (2013) 90 (2018) 77 77 equity and managerial Portfolio companies at end of 0 (2013) 10 9 9 support investment period (number) (2018) Pre-investment support Companies/projects 0 20 9 9 provided to RE projects supported (2013) (2018) OUTPUTS — II and entrepreneurs (number)

Improved investment Countries with new policies - 3 0 12 2 12 environment for RE countries/year supported from (2013) (2018) projects 2014 (number) Completed activities People trained on RE/EE *** 0 150 120 1819 related to institutional (number) (2013) (2018)

OUTPUTS – III support and capacity development on RE/EE

Improved regulatory and No. of GMG enabling projects 0 6 6 6 market conditions for - 5 country support packages (2014) (2018) Green Mini-Grids & Market Development Programmes implemented

41 Annex 2 SEFA 1.0 2019 FINANCIAL STATEMENTS SUMMARY

Financial Summary Resource as Of December 2019 Envelope Committed Disbursed Disbursed %

Donor pledged contributions $126 583 249 $122 430 317 97%

DANIDA (DK 300 million) $51 933 100 $51 933 100 100%

USAID (USD 20 million) $20 000 000 $17 000 000 85%

DfID (GBP 25 million) $32 685 704 $22 356 704 68%

Italy (EUR 7.4 million) $8 091 160 $8 091 160 100%

Norway (NOK 35million ) $4 112 773 $9 561 321 100%

Spain (EUR 4 million) $4 445 086 $4 445 086 100%

Sweden (SKK 50 million) $5 315 425 $5 315 425 100%

+Interest accrued $3 727 520

Operations $116 456589 $78 900 926 $45 684 225 57,9%

Approvals component I $28 381 449 $20 250 656 $9 343 521 46%

Approvals component II* - Equity $25 500 000 $25 500 000 $25 430 272 100%

Approvals component II* - PSF $10 000 000 $10 000 000 $4 366 886 44%

Approvals component III $43 595 469 $23 150 270 $6 543 547 28%

Overhead $10 126 660 $8 624 387 $5 158 622 60%

Admin & Secretariat costs $3 797 497 $3 423 210 $2 706 585 79%

Bank management fee $6 329 162 $5 201 177 $2 452 037 47%

42