NORAD Funds ATI With US$56 Million for Renewable Energy Projects
The funding from the Norwegian agency will support independent power producers in Africa.
The Norwegian Agency for Development Cooperation (NORAD), a directorate under the Norwegian Ministry of Foreign Affairs will fund the African Trade Insurance Agency (ATI) with US$56 million for its renewable energy projects. The amount will be allocated over an initial period of five years.
This funding will empower independent power producers (IPPs) in Africa. The grant will also support the ATI's role in the expansion of the Regional Liquidity Support Facility (RLSF) and develop additional insurance and guarantee products for small and medium-sized clean energy initiatives.
The RLSF is a bilateral partnership launched in 2017 by ATI and the German development agency, KFW, that aims to solve the global climate change problem by developing renewable energy products. It operates to address the short-term liquidity risks faced by IPPs that sell power to state-owned utilities in African countries.
The RLSF also aims to mobilize private investment into renewable energy projects across Africa while contributing to achieving the Sustainable Development Goals 7, 8 and 13. (SDG 7 – Ensure access to affordable, reliable, sustainable, and modern energy for all; SDG 8 – Promote inclusive and sustainable economic growth, employment and decent work for all; SDG 13 – Build knowledge and capacity to meet climate change).
Since launching, RLSF has supported four landmark solar projects in Burundi and Malawi, providing financing of US$150 million and an installed capacity of 108.5 megawatts. RLSF can be accessed by IPPs in API member countries that sign into the RLSF Memorandum of Understanding. Benin, Burundi, Côte d’Ivoire, Madagascar, Malawi, Uganda, and Zambia have signed the MOU with more to follow.
The Norwegian Agency for Development Cooperation (NORAD) is providing a $56 million #grant to the Africa African Trade Insurance Agency (ATI). The funding will help insure independent #renewableenergy producers in #Africa.— Renewable Energy Association of Nigeria (REAN) (@REANigeria) February 16, 2022
IPPs with the RLSF have an added advantage to register for the Transparency Tool. This tool is a web-based platform designed to show payment trends of public utilities. It aims to improve transparency in the sector and increase the confidence of investors and stakeholders.
Manuel Moese, CEO of ATI said that the partnership between NORAD and ATI has come at an opportune moment and will spur greater interest from the public and private stakeholders in the renewable energy sector. He said the grant would help renewable projects reach financial closure, thus helping with sustainable economic growth in sub-Saharan Africa.
Bard Vegar Solhjell, NORAD’s Director-General, said, “This innovative instrument helps unlock the private finance needed to bridge the energy access gap, while also contributing to reduced greenhouse gas emissions. It is a valuable tool in catalyzing much-needed commercial investments in/to the energy sector in Africa. Dialogue with renewable energy developers has confirmed the high relevance of liquidity guarantees.”
Top Photo: Wind Turbine Farm - Stock Image (Dimitar Marinov | Dreamstime)