Scaling up private sector investments for an ambitious energy transition in Africa

Universal access to energy can be reached only through a combination of solutions including traditional grid-extension and infrastructure investments as well as investments into innovative off-grid solutions that target rural and low-income households. However, scaling up renewables in line with their potential to meet energy security, energy access and climate objectives requires more significant investment than currently forecasted. Although public finance serves an important role, it is unlikely to increase above its current average of 15%.

Private finance will need to supply the lion’s share of new investment in renewables. There are constraints that prevent the private sector from accessing many of the existing investment opportunities, with challenges such as the lack of a project pipeline, limited access to affordable capital, limited risk mitigation instruments and lack of conducive policy frameworks.

Speakers from the public and private sector will share their experiences and examples of best practice, and suggest areas for action to create enabling environment that would stimulate investment and make Africa a leading global force in harnessing renewable energy potential. They will cover three key topics:

• Showcase the necessity of both large and small scale finance for energy transition in Africa and the potential of new innovative solutions
• Showcase the role of private investment in this transition
• Discuss the enabling environment for encouraging private sector investments and public- private partnerships

Session 1 -Attracting private investments into utility-scale project (8:35 - 9:45)

Investment in large-scale grid connected renewable energy technologies has recently gained momentum across Africa. Procurement modalities ranges from negotiated power purchase agreements, as we have seen in the 315 MW lake Turkana wind project in Kenya,  and in a number of  large scale (10-100 MW) PV projects, in West Africa, such as Senegal, Mali and Ghana, to procurement through tendering schemes as experienced in the REIPPPP programme in South Africa, by which investment in more than 6000 MW of grid connected wind and solar has been ensured since 2011.  In this section, we will discuss, to what extent the energy sector on the African continent will experience an evolution from negotiated PPA's to tendering schemes; how this may change the modalities for private developers,  (EPC) companies, and finance institutions operating on this market, and what the needs would be in terms of policy and regulation

• Moderator: Mr. John Christensen, Director, UNEP DTU Partnership
• Mr. Ivan Nygaard, Chief Scientific Advisor, UNEP DTU Partnership, Denmark
  Overview of the how investment in grid connected renewable energy technologies have developed on the continent during the last 10 years, how procurement modalities have changed, and how they are expected to develop in the future.
• Ms. Angela Naneu Churie Kallhauge, Senior Climate Change Specialist Head, Carbon Pricing Leadership Coalition Secretariat and, The World Bank
   How carbon pricing can be used for supporting investment in large-scale grid connected renewables, and provide suggestions for policy incentives and enabling environment for investment in large scale renewables.
• Mr. Wisdom Ahiataku-Togobo, Director for Renewable and Nuclear Energy, Ministry of Energy, Ghana
  How financing was ensured for the recent 20 MW grid connected PV power plant in Ghana; how Ghana is regulating procurement of large-scale renewables, and what he sees as the main obstacles for investment in large-scale renewables in Ghana today.

Session 2 - Private sector led investments in mini-grids and household energy access solutions: best practices, policies and the role of local financial institutions and partnerships (9:45 - 10:45)

A shift is seen in recent years, whereby private investors are increasingly investing in solar PV and other clean energy solutions for rural off-grid markets. This movement from donor projects to business driven markets creates new opportunities in terms of leveraging private investments for the increasing populations living without access to modern clean energy. In the small-scale mini-grid market (<100kW) we see increasing activity from private businesses who provide power to small rural villages through technologically advanced solar powered mini-grids relying on smart ICT-based metering, monitoring and payment solutions. While these developments are rather recent in East Africa with policy frameworks in the making, the private mini-grid market is more mature in West Africa with pertaining mini-grid policies in place for longer. Similarly, recent technological progress in household solutions is opening up new possibilities for commercially feasible solutions to households. In this session, we explore different approaches and experience regarding policy, implementation and financial partnerships across East and West Africa, from the perspective of increasing private sector investments to enable national priorities in expanding energy access.

• Moderator: John Christensen, Director, UNEP DTU Partnership
• Dr. Ibrahim Togola, Chairman and Co-Founder, ACCESS, Mali
  Conducive policies and financial mechanisms for upscaling mini-grids - based on experience from developing mini-grids through ACCESS in Mali
• Mr. Mahama Kappiah,  Executive Director, ECOWAS Centre for Renewable Energy and Energy Efficiency (ECREEE), Cape Verde
  Regional Perspective on private sector mini-grid development: experiences across west African countries.
• Mr. Francis Vazheparambil, Chief Executive Officer (CEO), Standard Microfinance Bank (SMB)
  Small scale solar PV and cooking survey results, aspects of home solar PV system financing including credit risks, description of bank's home solar PV lending program.
• Ms. Alice Kaudia, Co-chair, Climate and Clean Air Coalition (CCAC)
  Current experience, strategies and upcoming challenges in structuring financing of clean small scale/household energy solutions.