Experts meet to discuss financing renewable energy in Africa
9 juin 2016
Over 150 private and public sector players took part in a lively discussion about how best to accelerate financing for renewable energy development in Africa, at a recent meeting organised by the ICA.
Growing domestic African funding for renewable energy development, introducing cost-reflective tariffs, promoting local participation in manufacture, de-risking investments and the importance of early stage funding were among the issues covered by the panel discussion, which took place in Lusaka, Zambia, on 26 May 2016, coinciding with the African Development Bank’s annual meeting.
Moderated by Dr Jacqueline Chimhanzi, Senior Strategist at the Industrial Development Corporation (IDC), the main conclusions from the panel discussion included:
- Africa needs to “look within itself’ and identify how best to increase funding for renewable energy development using domestic finance, rather than relying on US$ denominated PPAs, which are costly for African economies. Encouraging African pension funds to invest in renewable energy was one example of using domestic funding;
- To promote local manufacture, servicing and maintenance of renewable energy technologies, regional and market integration needs to be accelerated;
- Risk mitigation mechanisms needs to be strengthened in order to protect investors, while the establishment of sub-regional guarantee funds should be stepped-up;
- The introduction of cost-reflective tariffs should be accelerated, in order to promote private sector investment, whilst taking into account issues of affordability and inclusive growth;
- The levels of early stage funding need to be increased drastically, while information about available funding needs to be made more easily accessible to project developers, including local entrepreneurs.
In addition to Dr Chimhanzi, the expert panel comprised:
- Honourable Dora Siliya, Minister of Energy and Water Development, Zambia;
- Dr Henning Wuester, Director for Knowledge, Policy and Finance Centre, International Renewable Energy Agency (IRENA);
- Professor Lemma Senbet, Executive Director, African Economic Research Consortium;
- Mr Alan Narayuda, Senior Underwriter, Multilateral Investment Guarantee Agency (MIGA);
- Mr Vivek Mittal, Managing Director, Millennium Resource Strategies Ltd.