IRENA is welcoming applications for the first tranche of USD 350 million funding to boost renewable energy in developing countries, offering the potential of sustainable and affordable energy to millions of people who previously had limited or no access to energy.
Applications, which will be accepted until 12 January, are open to government-led or -guaranteed projects in IRENA member and applicant countries from the developing world.
Broadening energy access is crucial to achieving international development goals, and renewable energy offers the opportunity to power communities not served by conventional energy. But mobilizing finance remains a significant challenge to a successful scale-up.
The United Arab Emirates has committed to providing USD 350 million to renewable energy projects endorsed by IRENA over seven funding cycles, through the Abu Dhabi Fund for Development (ADFD). The first funding cycle offers USD 50m.
IRENA has developed evaluation guidelines to select projects for funding that are innovative and replicable, broaden access to energy, and address issues identified in the Millennium Development Goals. The guidelines also seek to ensure projects selected represent a diverse range of technologies and locations, and address energy security issues. Shortlisted projects will be sent to the ADFD for final selection.
“The time has never been better for promoting renewable energy in the developing world,” said Frank Wouters, IRENA Deputy Director-General. “Costs have fallen, demand is growing, and renewables offer an unprecedented opportunity to broaden access. But we need finance to make this a reality. With this new facility, the Abu Dhabi Fund for Development and IRENA are making innovative renewable energy projects bankable and providing opportunities for new renewable energy businesses to grow in energy-poor areas.”
Applications can be made through the website at www.irena.org/adfd .
IRENA/ADFD renewable energy facility Q&A
What is the relationship between ADFD and IRENA?
The ADFD is an independent development agency of the Abu Dhabi Government. It was established in 1971 with the objective of helping developing countries alleviate poverty, through concessionary loans to development projects.
As part of its bid to host the headquarters of IRENA, the United Arab Emirates offered a commitment of up to AED 183 million (about USD 50 million) for each funding cycle, over seven funding cycles, to finance renewable energy projects in developing countries endorsed by IRENA.
IRENA’s role involves facilitating the process of submission and review of project proposals, using the relevant procedures approved by Members. The IRENA/ADFD project facility will focus on replicable, innovative projects, intended to have a multiplier effect. Innovative programs that use public capital can spur private investment. The ultimate selection, financial support and administrative management of the projects remain the responsibility of the ADFD.
What type of funding is available?
The facility will offer concessionary loans. In general, ADFD concessionary loans rates vary between 2 – 6 per cent, over a period of 15 to 20 years. This includes a grace period of 3 to 5 years. The terms and conditions of the loans will be decided by ADFD based on many factors – including the applicant country’s dealings with other similar funding institutions, income level and so forth. Applicants are requested to propose their loan terms and conditions when submitting applications.
ADFD funding does not cover more than 50 per cent of the project costs. Loan values per project will range between USD 5 million and USD 15 million. There are no limitations on the number of proposals per country, but an applicant country which submits more than two proposals should prioritize them. To seek a balanced distribution of projects across the developing countries of IRENA’s membership, the total maximum loan values per country may be limited to USD 15 million. Applications unsuccessful during the first funding cycle may submit project proposals during future funding cycles.
Who is eligible to apply?
Members, Signatories and Applicants (i.e. States in Accession) of IRENA included in “the DAC List of ODA Recipients” are eligible.
Project proposals may be submitted by governments, governmental agencies, non-governmental organizations, and partnerships with private corporations. However, all project proposals must be government-led or -government guaranteed.
What is the deadline for application?
12 January 2013 (17:00 Abu Dhabi time).