The European Bank for Reconstruction and Development has started a US$ 250million financing program for private sector renewable energy generation in Morocco, Egypt, Tunisia and Jordan.
The financing framework envisages up to US$250 million in debt and equity funding for private companies in the Southern and Eastern Mediterranean region to build new renewable energy generation capacity. Most of the produced energy will be sold directly to private sector consumers such as cement companies and hotel groups.
The EBRD programme will support a number of new business models, from direct agreements between large developers and corporate consumers to small scale generation in communities. In Tunisia, given the early stage development of the sector, direct sales to STEG, the state-owned single buyer, are also eligible for financing.
“For the first time in this region the private sector is now able to produce and sell clean renewable energy on a commercial basis competing head to head with gas and oil-fired generation,” said Nandita Parshad, EBRD’s Director for Power And Energy. “We are grateful to our partners in this programme, the CTF and GEF funds and the Union for the Mediterranean for their support in catalyzing this development.”
The first project under the new programme is expected to be the 120-megawatt Khalladi wind farm near Tangiers in Morocco, one of the first private renewable projects in the country.
Under the framework, two international funds will invest alongside the EBRD: the Climate Investment Funds’ Clean Technology Fund will provide up to US$35 million, and the Global Environment Facility with up to US$ 15 million; of concessional financing which will not exceed 10% of any single project.
A technical assistance programme of over US$ 1 million, funded by the EU’s Neighbourhood Investment Facility, will support project preparation and analysis.