The International Renewable Energy Agency (Irena) and the Abu Dhabi Fund for Development (ADFD) have opened the fifth round of funding for renewable energy projects in developing countries.
The funding round of approximately $50 million is part of ADFD’s $350 million commitment offering concessional loans to renewable energy projects endorsed by Irena.
Since 2012, the Irena/ADFD Project Facility has enabled $333 million in loans to 15 renewable energy projects in 14 developing countries. Selected projects thus far have included off-grid, mini-grid and on-grid projects using wind, solar, hydro, geothermal and biomass sources. Thanks to the first three cycles, more than 68 megawatts of renewable energy capacity will be brought online, improving the livelihoods of 760,000 people.
“Many developing countries are blessed with abundant renewable energy resources, yet access to financing can still hinder development,” said Irena director-general Adnan Z. Amin.
“Irena’s partnership with ADFD helps overcome this challenge by offering concessional loans to quality renewable energy projects in developing countries, which then leverage additional investment. Funding from the Facility helps boost renewable energy deployment and trigger economic growth, offering sustainable and affordable energy to people with limited or no access to electricity.”
Mohammed Saif Al Suwaidi, director-general of ADFD said: “The Irena/ADFD Project Facility is a pioneering partnership that supports the developing world’s energy needs by tapping into their abundant renewable energy sources. Selected projects have the potential to improve the livelihoods of millions of people by facilitating sustainable economic growth, bolstering energy security and expanding energy access.
“This collaboration with Irena exemplifies our core business of partnerships and alliances to drive advancements in all key economy sectors, especially the renewable energy sector, which will guarantee a long-term, sustainable and environmentally conscious future. At ADFD, our aim is to provide governments with the financial resources and instruments to achieve their desired development goals and ensure a secure future for their citizens.”
Through the Facility, ADFD provides concessional loans ranging from $5 million to $15 million per project. Finance is offered at 1 to 2 per cent lending rates with a 20-year loan period, including a 5-year grace period. Loans for each project cover up to half of the estimated project cost so additional co-financing must be acquired from other sources. To help facilitate additional sources of funding, project developers can register and seek financing sources from Irena’s Sustainable Energy Marketplace.
Only projects located in Irena Member States, Signatories of the Statute, or States in Accession are eligible to apply. Applications are evaluated by an international panel of experts who review the projects based on technical feasibility, economic/commercial viability and socio-economic and environmental benefits.
The deadline for applications for the fifth cycle is 15 February, 2017. Results will be announced in January 2018.