In what is believed to be one of the first renewable energy funds in Africa, the plan is to increase the initial US$100 million for the African Renewable Energy Fund by the same amount. Managed by Berkley Energy Africa, the money will support small and medium-sized independent power producers with grid-tied projects of five to 50 MW including small hydro, wind, solar, geothermal, biomass and waste gas.
The Fund will commit US$10 to US$30 million for the development stage of each project, and larger projects may be able to access larger amounts. It will likely support the newly formed Africa Clean Energy Corridor, which 19 countries have agreed to develop to leapfrog the continent to renewable energy.
Currently, Ethiopia hosts the continent’s biggest wind farm and has plans for 800 MW of wind and 1.0 GW of geothermal. The Corbetti Project is a new model for developing large scale power projects in Africa and is part of the Power Africa initiative that President Obama announced in 2013.
Investors in the African Renewable Energy fund include African Biofuel and Renewable Energy Company, which co-founded the fund; West African Development Bank; Nigeria-based Ecowas Bank for Investment and Development; Dutch development bank Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden NV; and the US-based Calvert Foundation.
Development banks are increasingly supporting clean energy, growing by a compounded 25% a year since 2007, according to Bloomberg New Energy Finance.
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