The International Renewable Energy Agency (IRENA) and the Abu Dhabi Fund for Development (ADFD) have opened a fifth round of funding for renewable energy projects in developing countries.
The $50 million round of funding marks the fifth of seven funding cycles administered through the IRENA/ADFD Project Facility — the body established to administer ADFD’s $350 million commitment in concessional loans to provide and facilitate financing of renewable energy projects in developing nations.
Commenting on the opening of the fifth round, IRENA Director-General Adnan Z. Amin stated: “Many developing countries are blessed with abundant renewable energy resources, yet access to financing can still hinder development.”
“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.”
Seleha Lockwood, IRENA’s program officer, told Renewable Energy World of the challenges in the development and deployment of renewables in developing nations that the IRENA/ADFD endeavour aims to overcome.
“The ADFD funds overcome a number of challenges, including access to finance for small and medium sized projects, and the ability to scale up renewable energy projects that have been proven but require low cost finance to replicate [and] scale up their operations,” Lockwood said.
If, for example, a pilot solar PV diesel mini-grid has already been implemented and has been proven to be economically feasible, Lockwood said project developers need additional funding to replicate it.
“Also, many smaller developing countries cannot obtain funding without going through a long and complicated processes,” she said. “The IRENA/ADFD Project Facility offers loans simpler and quicker.”
Within each $50 million round, loans of $5 million to $15 million to cover up to 50 percent of total project costs are available.
Since opening in 2012, through its first three rounds, the IRENA/ADFD Project Facility has allocated some $144 million in loans to 15 renewable energy projects spread over 14 developing countries. The projects represented a combined capacity of 67.6 MW of clean, renewable power, benefitting the lives of over a quarter million people.
Describing previously successful projects, Lockwood said: “Successful projects have been small- to medium-sized, covering a variety of technologies from a 4-MW solar PV diesel mini-grid project [in Mali] to a 15-MW geothermal project and a hybrid wind and solar project.”
“Projects selected are always replicable and scalable,” she said. “The Mali solar PV diesel mini-grid project, for example, had been piloted in many villages before being presented to the facility for replication and scale up.”(More details on selected projects are available.)
Image: Renewable energy projects funded through the first three rounds of the $350 million initiative to support renewable energy projects in developing countries from IRENA & ADFD. Credit: IRENA/ADFD infographic.
Notable is the number of isolated, off-grid solutions that have received support. Explaining the significance of these projects and microgrids, Lockwood said: “IRENA’s role — in tandem with ADFD — is to support social and economic development and improve energy access. In many rural locations, it does not make sense economically and feasibly to extend the grid, so off-grid solutions become a necessity. That is the case in many of the projects selected in previous cycles.”