International agency creates platforms to aid investment in African renewable energy

Francesco La Camera, the Director-General of the International Renewable Energy Agency. Photo: Supplied

Francesco La Camera, the Director-General of the International Renewable Energy Agency. Photo: Supplied

Published Apr 19, 2024


The International Renewable Energy Agency (IRENA) says two platforms are now available to help Africa and other countries fund and develop projects, delegates at the 14th Assembly of the agency, held in Abu Dhabi, United Arab Emirates, heard yesterday.

IRENA director-general Francesco La Camera said they were facilitating global energy transitions though project support.

This as more action was needed to triple renewable energy capacity by 2030. Installed renewable energy capacity would need to reach more than 11 000 Gigawatts.

La Camera said that over the past four years the agency had created two successful platforms to help achieve the tripling of renewable capacity by 2030 – the Energy Transition Accelerator Financing (ETAF) platform, and the Climate Investment Platform (CIP).

The CIP’s mandate was to increase capital mobilisation and renewable energy investment in developing countries, and to facilitate the development and scale-up of renewable energy technologies through technical assistance to member countries. Project proponents, registered on the platform, were considered for technical assistance and project facilitation support to reach commercial feasibility readiness for financing matchmaking with registered financial institutions.

La Camera said that since the CIP was formed to date, five projects had now reached financial close.

The ETAF platform, established to accelerate the energy transition, platform, aimed to fund up to 1.5 gigawatts of new renewable energy by 2030, with a focus on developing economies. This would support the implementation of ambitious National Determined Contributions to meet Paris Agreement targets.

The new ambition for ETAF was to meet $5 billion (R95bn) in funding by 2030, he said.

La Camera urged members of IRENA to make use of these platforms to enable their energy transformation.

Speaking at the assembly, Kadri Simson, the European Union’s Commissioner for Energy, explained what the EU was doing to enable financing.

She said to make renewable projects more profitable and bankable, the EU had targeted three areas to drive acceleration.

The EU was focusing on: simplifying and clarifying the regulatory framework, which was key, such as cutting red tape and tackling administrative bottlenecks to let investments flow more quickly; new legislation and the exchange of good practice; and, the introduction of a more strategic approach to spacial planning, for example, designating areas that were suitable for projects that benefit from lighter procedures or environmental assessments, such as a motorways, industrial sites and degraded land.

This would give developers, off-takers and manufacturers a better picture of the project pipeline and make the business environment more predictable. This meant they could better plan.

The EU was mobilising around €300bn (R6 trillion) for cleaner finance, Simson said.

However, it was not enough to just talk about finance, said Vince Henderson, the Dominica Minister for Foreign Affairs, International Business, Trade, and Energy.

“De-risking finance is important,” he said.

Speaking for members in the Caribbean, he noted the potential for developing geothermal power in the region, but for that to work they needed de-risking up front and resilience factored into systems.

“Transmission systems, which often need to be upgraded for renewable energy, need to be financed... and blended with technological support to reduce the overall cost to the consumer. Energy as a means of development has to have affordability factored into the transition,” he added.

Delegates heard that ETAF could look at different solutions to help de-risk projects, bring in new partners and work with players to realise their version.

Davis Chirchir, Kenya’s Cabinet Secretary in charge of Energy and Petroleum, said Kenya derived 50% of its energy mix from geothermal, and this was a great baseload in that it could provide power almost 100% of the time.

The availability factor for other renewables was very low, so bankability was a challenge.

“So providing proper compensation in terms of cost of capital, return on investment, availability of plant to make it bankable, we can get a number of investors coming in to leverage on the competitiveness on the tariff offering, based on the economics of dispatch and feed-in tariff,” he said.

Kenya also had the largest wind plant in Africa, producing 310 MW.

"Providing a good return on investment and equity, letters of support from the government, you can get capital coming in. There is now a long investment waiting list for geothermal, wind and solar (in Kenya).

“You want to develop and dispatch power to the grid that can be off-taken. You need to match supply and demand so you don’t generate power you don’t need. So you keep the right tariff that can return on the cost of capital,” Chirchir said.