AfDB, IFC and SEFA launch first large-scale privately-financed solar project

The African Development Bank (AfDB) and the Sustainable Energy Fund for Africa (SEFA), in partnership with the International Finance Corporation and UAE’s AMEA Power, has launched Tunisia’s first privately-financed solar project.

This initiative is set to revolutionise the nation’s energy scene by cutting power generation costs, significantly trimming greenhouse gas emissions by over 90,000 tons annually, and bolstering Tunisia’s green transition.

The partners signed project launch papers on Tuesday 26 September, at the government headquarters in Al Qasba, Tunis. This initiative stands as one of Tunisia’s most impactful infrastructure projects in over a decade.

The 100-megawatt, US$86 million solar plant located in Tunisia’s Kairouan governorate will benefit from up to $26 million in debt financing from the African Development Bank, including US$13 million sourced from SEFA, a multi-donor fund that provides finance to unlock private sector investments in renewable energy and energy efficiency.

The financing scheme is designed to ensure the holistic development, financing, operation, and maintenance of the plant, located roughly 150 km south of Tunis, in El Metbassta.

The plant is central to Tunisia’s strategy to reduce its reliance on natural gas. It aims to bolster the nation’s renewable energy share to an ambitious 35% by 2030, thus the Kairouan Solar project is not just about power generation; it is about regional transformation.

Hela Cheikhrouhou, IFC’s Regional Vice President, Middle East, Central Asia, Türkiye, Afghanistan, and Pakistan, emphasized the venture’s broader impact: “This project represents a positive stride towards Tunisia’s green transition. South-South investments such as this one underscore the essential role that private sector partners can play in the energy transition.

This project is in line with our strategy to enable South-South investments, including from Gulf Cooperation Council countries to emerging markets,” she said.

Sérgio Pimenta, IFC’s Vice President for Africa, further added, “This ambitious, renewable energy project will not only bring more affordable, clean energy to the people of Tunisia, but it will help Tunisia achieve its energy goals and attract more private investments into future green projects. Through the project, we’re proud to build on our partnership with AMEA Power to expand their operations across North Africa, helping address the effects of climate change in the region.”

Reflecting on the landmark agreement, Dr. Kevin Kariuki, Vice President of Power, Energy, Climate, and Green Growth at the African Development Bank, stated, “We are thrilled to achieve this pivotal moment as we sign the first solar IPP project in Tunisia. This achievement results from AfDB’s unwavering commitment to fostering sustainable energy solutions on the continent. Today’s success is the result of a strong partnership between the Government of Tunisia, AMEA Power, the Bank, SEFA and the IFC. It embodies our joint commitment to help move the country close to its 35% clean energy target.”

AMEA Power’s Chairman, Hussain Al Nowais, said: “We are delighted to reach financial close on this 120MW solar power plant in Tunisia, our first project in the country. This is a significant milestone for AMEA Power and for Tunisia, as it represents the largest solar project fully developed in the country to date.

Despite all the challenges that the market has been experiencing since the COVID pandemic, we are proud that we are delivering this project and honouring our commitment to supporting Tunisia’s transition to clean energy. We are grateful for the strong support of our lenders and the Tunisian government in making this project a reality.”

Malinne Blomberg, African Development Bank deputy Director General for North Africa said: ” The Kairouan solar project symbolises much more than a renewable energy milestone for Tunisia; it’s a testament to the power of collaboration. As the inaugural transaction of its kind, it faced unique challenges, but the AfDB is committed to such transformative ventures. Today’s success and established partnerships will pave the way for future collaborations, driving a sustainable, prosperous and more just energy transition to Tunisia and Africa at large.”

SEFA’s participation is highlighted by the project’s inclusion as a vital component of its COVID-19 IPP relief programme, designed to cushion late-stage renewable energy projects from the economic tremors of the pandemic. The programme seeks to neutralise any associated cost surges due to the pandemic, preserving the project’s feasibility. This will ensure the Kairouan Solar PV project’s unique position as Tunisia’s pioneering utility-scale solar Independent Power Producer or IPP.

Wale Shonibare, African Development Bank Director for Energy Financial Solutions, Policy & Regulation noted that the project resonated with the Bank’s unwavering dedication to catalysing sustainable energy solutions across Africa.

“This monumental stride was possible due to the formidable collaboration between the Government of Tunisia, AfDB, SEFA, IFC, and AMEA Power. This venture exemplifies our collective effort to bolster Tunisia’s energy independence and fortify its green transition,” Shonibare said.

Source: norvanreports