CTI PFAN Capacity Building Workshop
Rwanda hosted the CTI PFAN Capacity Building workshop bringing together an array of Energy stakeholders from across East Africa and beyond, including Energy Private Developers, Government, and Investors at the Lemigo Hotel.
Over ninety (90) participants attended the workshop, including 11 investment and financing institutions and many Energy Private Developers from Rwanda and the rest of East Africa.
The Climate Technology Initiative Private Financing Advisory Network (CTI PFAN) is a multilateral public private partnership, initiated by the Climate technology Initiative (CTI – www.climatetech.net), which nurtures promising clean energy projects, provides free support and advice on the preparation of economically viable and environmentally sustainable business plans with the goal of connecting the selected projects with investment through its global network.
The ultimate objective of the workshop was to facilitate a better understanding between the various stakeholders involved in the energy projects development value chain and specifically to help both public sector officials and project developers better understand the requirements and conditions of the international financing community for raising investment and financing for clean energy projects.
Increasing viability and visibility of clean energy projects necessitates that government representatives and technical experts in the various fields of investment and finance are conversant in providing the requisite technical and financing support to project developers to ensure that as many projects as possible advance from the development stage through financial closure and actual implementation. CTI PFAN’s Capacity Building Workshop was expressly designed to catalyze this process and to increase the viability of clean energy projects within the region.
Mr. Peter Storey, the Global Coordinator of CTI PFAN, travelled to Kigali to officially launch CTI PFAN activities in Rwanda (the programme is already operational in Kenya, Tanzania and Uganda) and explore possible areas of collaboration especially with related Public and Private Sector players.
The State Minister of Energy and Water, Hon. Emma Francoise Isumbingabo presided at the official opening of the workshop, Wednesday 20, March morning. In her keynote address, she noted that: “financing climate change mitigation projects is one of the most challenging issues facing the world today. It therefore requires us to pay particular attention to better understand the requirements and conditions of the international financing community for raising investment and financing for clean energy projects”. This is exactly what preoccupies CTI PFAN all year round – working with a total of 164 projects (126 in development pipeline and 38 projects closed) across developing economies of Asia, Latin American Countries, Africa, and South East Asia. The total amount of investment raised for closed projects to date is USD 432 million including 316 MW of installed Clean Capacity, 1.9 million tonnes CO2 reduction pa and 94.5 GWhrs pa energy savings.
In Africa CTI PFAN operates in three sub-regions, namely Southern Africa, East Africa and West Africa and each of these has both regional and country coordinators. The impact in Africa has been remarkable: Africa accounts for 37% of all pipeline projects and 27 % of all closed projects globally have come from Africa with East Africa taking about half of this share.
Apparently, the extension of CTI PFAN footprint in Rwanda came at an opportune moment when the Government of Rwanda has set ambitious targets in its energy generation strategy to fuel her economic growth over the next five years; to double GDP per capita and increase GDP growth from the current annual average of 8.2% in the last ten years to 11.5% by the year 2020. GDP per capita is projected to move from the current US$600 to reach 1240 USD by the year 2020.
Approximately 86% of primary energy in Rwanda comes from biomass – that is fire wood (57%), charcoal (23%) and smaller amounts of crop residues (6%). Of the 14% of non-biomass primary energy, petroleum products account for 11% (used mainly in the transport sector) and electricity for approximately 3%. The Government plans to generate 1,000MW from different sources by the year 2017 – projecting 340 MW for hydro, 310 MW for Geothermal, 300MW for Methane Gas and Peat-200 MW.
As the Hon Minister remarked, the government’s key role is to facilitate the private sector by developing an enabling policy environment. “But achieving the objectives of clean energy projects’ financing requires a change in the mind set from the government, development partners and the private sector. It will require a true commitment to goals of the initiative and a conscious effort to those who need it most – private sector energy developers”.
There are over 50 Clean Energy Developers in Rwanda, organized under the Energy Private Developers Association (EPD) under the stewardship of Dr. Ivan Twagirashema as Chairman. At the end of the Workshop, a partnership Memorandum of Understanding was signed between EPD and CTI PFAN that provides association members access to CTI PFAN services and should benefit Rwanda in terms of building local capacity and increasing financing flows for Clean Energy project funding.
CTI PFAN Global Coordinator, Peter Storey, hoped that further such agreements with other Rwandan institutions would follow and remarked “CTI PFAN is proud to expand into Rwanda and this workshop has confirmed the opportunities for supporting the private sector. We are looking forward to working with EPD, with other project developers and the Rwandan government to help them raise the capital they need to implement their projects. Our combined efforts will support the growth of clean energy and promote low carbon development in Rwanda.”
Well aware of the major challenge facing development of Clean Energy (CE) projects in the developing world – difficulties in accessing long-term financing due to uncompetitive business plans by Developers, CTI PFAN offers free coaching on project structuring, development and financing; matchmaking through sourcing of equity and debt financing facilitation. Typically CTI PFAN works with projects with an investment volume of between USD 1 – 50 million but also dedicates some of it activities to micro-projects of under USD 1 million. As part of support, CTI PFAN ensures that before project is presented to the investors, it is; commercially viable, technically viable, has growth potential, has a competent management team, compliant with all MDGs, and potential reduction of Greenhouse Gas (GHG) Emissions.
The success of CTI PFAN in a very short period is tagged to the fact that, unlike other energy financing initiatives available globally, it minimizes red tape. Periodically there is call for proposals and projects get selected and shortlisted. This is followed by intensive one-on-one coaching, project development workshops that culminate in financing forums.
Entry into the CTI PFAN pipeline is by submission of a project proposal which also serves as a project design document. This can be made in any form but a template downloadable from resources section, which under Toolkit for Business Proposals provides a guideline as to the sort of information required.
Editor’s Additional Notes:
Since 2006 CTI PFAN has tested and refined the paradigm. It has established itself as a credible vehicle for accessing private capital to implement clean energy projects in developing countries.
Important to note, 2012 saw the launch of a new work stream for Adaptation Related Projects that focuses mainly on Sub Saharan Africa. Some 10 projects were taken on in a pilot programme. The adaptation stream targets the following sectors; Access to Energy, Agriculture & Agri-business, Water & Sanitation, Tourism, and Forestry & Eco-System Services.