| Modernisation
structured around two components. Firstly high-level mapping of the hydropower fleet status. The first component will map hydropower facilities and assess their respective rehabilitation needs. The target group is comprised of 55 hydropower facilities with an installed capacity beyond 50MW and aged over 30 years. The assessment is envisaged to be conducted by IHA given their unique experience in conducting similar mappings in Latin America for IDB and Asia for AIIB. Based on this station-level assessment and an overlaying macroeconomic assessment conducted by the AfDB (power system capacity and stability, creditworthiness of beneficiary, appetite from key stakeholders, scope of modernisation), two pilot projects will be selected for preparation up to bankability under the second component. Second is project preparation support for
selected power plants. This component will fund the preparation of the modernisation of two pilot projects up to bankability. The funding will cover the required studies to define the scope of modernisation, the drafting of core legal documents such as power purchase and concession agreements as well as procurement of concessionaires to undertake modernisation and, potentially, operation of plants. AHMP will also hold capacity building workshops for owners and operators. This component is informed by the successful modernisation of the Kainji and Jebba plants in Nigeria. In this case, the government contracted Mainstream as a concessionaire. The company has successfully modernised the plants, which have gone from output of almost nil to generating over 900MW.
Expected impact The programme has been designed in a modular
fashion. The initial phase will lay the foundations and test the approach of programmatic modernisation at scale. It also provides a partnership platform to engage various technical and financial organisations to join in developing and financing a pipeline of projects across the African continent. The preparatory work of at least two hydropower facilities is expected to be supported by this phase. Development outcomes will depend heavily on the facilities selected, the scope of modernisation measures undertaken and the successful mobilisation of financing. As a baseline, the African Development Bank expects this intervention to increase the available capacity by 200MW and to mobilise approximately $100 million from investors and lenders, with ancillary benefits including job creation for men and women and reduction of greenhouse gas emissions.
The Bank, long recognising hydropower’s importance for Africa’s clean energy transition, has provided more than $1billion in financing for hydropower projects across Africa over the last decade. These projects include project preparation grants, equity investments, debt financing and provision of concessional capital for both public and private sector projects. The 420MW Nachtigal project in Cameroon; the 44MW Singrobo project in Côte d’Ivoire; the 200MW Sahofika project in Madagascar; the 50MW Malagarasi project in Tanzania and the 34MW Kinguélé Aval project in Gabon are some recent examples of projects where the African Development Bank has played a lead role in structuring finance and investment.
However, only three projects in the Bank’s portfolio of over 40 hydropower projects have focused on hydropower modernisation. The most recent is the 1500MW Kariba plunge pool reshaping and spillway rehabilitation in Zambia/Zimbabwe. AHMP is expected to pave the way for the Bank and its partners to scale-up investments in hydropower and to undertake fleet modernisation in a structured and programmatic way. ●
Above: A comprehensive overview of the African Development Bank’s hydropower portfolio
Further information The authors are Leopold Ruppert, sustainable Energy Specialist/Consultant;
l.ruppert@
afdb.org
João Duarte Cunha; Manager, Renewable Energy and Energy Efficiency Department;
j.cunha@
afdb.org
SEFA is a multi-donor facility special fund, managed by the African Development Bank, that provides catalytic finance to unlock private sector investments in renewable energy and energy efficiency across the continent. It provides technical assistance and concessional finance instruments to remove market barriers and improve the risk-return profile of individual investments. Its overarching goal is to contribute to universal access to affordable, reliable, sustainable and modern energy services for all in Africa, in line with the Bank’s New Deal on Energy for Africa and Sustainable Development Goal 7. SEFA was established in 2011 in partnership with the Government of Denmark and has since received contributions from the Governments of United States, United Kingdom, Italy, Norway, Spain, Sweden and Germany.
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