Video / Recorded Webinar
Video / Recorded Webinar
CEADIR Series: Political and Credit Guarantees to Boost Clean Energy Financing in Africa
Financial institutions in developing countries face key challenges in offering competitive financing for clean energy investments and structuring bankable projects. Bilateral and multilateral development institutions can mitigate certain political and credit risks to scale up private sector investments in clean energy.
On December 6, 2016, the CEADIR Series hosted “Political and Credit Guarantees to Boost Clean Energy Financing in Africa,” featuring:
- Andrew Gisselquist, Investment Officer at USAID Development Credit Authority (DCA), who explained how DCA products share risks through partial loan guarantees and presented a 2015 case study of lending for off-grid renewable energy throughout Africa.
- Marcus Williams, Acting Head Global Head of Energy, Oil & Gas and Mining at Multilateral Investment Guarantee Agency (MIGA), who presented on MIGA’s experiences offering political risk insurance to projects in Africa.
- Marlena Hurley, Director of Political Risk Insurance and Reinsurance at Overseas Private Investment Corporation (OPIC), who provided an overview of three OPIC programs: political risk insurance, project finance, and support for investment funds and presented a case study of a renewable energy project in Senegal.
- Moderator Nadia Scharen-Guivel from Abt Associates discussed clean energy lending challenges in Africa and the effectiveness of political and credit risk guarantees. She also outlined CEADIR’s upcoming activities to increase the use of existing DCA guarantees for off-grid, small-scale energy financing in sub-Saharan Africa.
Key takeaways from the event:
- Approximately $40 billion per year of new investments is needed to fill the energy access gap in Africa—development assistance and public funding provide approximately $10 billion per year, meaning private investments must meet the remaining demand.
- Bilateral and multilateral development institutions can mitigate certain political and credit risks to scale up private sector investments in clean energy. They are integral to providing private investment until local regulatory and legal frameworks gain more experience in designing and enforcing rules and regulations.
- Panelists explained the specificities and mechanics of political and credit guarantees from MIGA, OPIC, and DCA intended to catalyze private sector investments. Such guarantees can be provided for grid-connected projects, as well as off-grid projects, and projects can be bundled in a portfolio to reach scalability
- The long-term objective for Africa—and Sub-Saharan Africa specifically—is to ensure that governments work cohesively with the private sector and civil society to ensure sustainable energy access through local capital development and to develop a local energy technology market.
Download presentation: https://ceadirseries.adobeconnect.com/dec2016_presentation/
Check out upcoming events in the CEADIR Series: https://ceadirseries.adobeconnect.com/admin/show-event-catalog
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