The German Development Bank and the African Trade Insurance Agency (ATI) have unveiled a €32.9 million to support renewable energy projects that target small and mid-scale (up to 50 MW) green power renewable energy projects in sub-Saharan Africa.
The facility is designed to provide a viable solution to one of the biggest challenges facing independent power producers (IPPs) operating in Africa, specifically the requirement to provide project lenders with a liquidity guarantee.
The German Federal Ministry of Economic Cooperation and Development (BMZ) through KfW will provide funding of up to 32.9 million Euro to the facility, which aims to enable small and mid-scale renewable energy projects in Africa to reach financial close by addressing liquidity requirements that lenders frequently require in order to fund such projects.
The report further stated that the launch of the new facility is happening at an opportune moment when emerging markets are seeing record investments in the renewable energy sector. It stated that the International Energy Agency (IEA) expects sub-Saharan Africa’s renewables capacity to grow by 73 percent (24.4GW) over the period 2017-22.