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ADB Private Sector Deal to Promote Solar Power in Afghanistan

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The Asian Development Bank (ADB) has signed a $4 million loan with a special purpose vehicle and subsidiaries owned by the 77 Construction, Contracting, and Trading Group (77 Group), an international civil works contracting firm headquartered in Turkey, to help build a 15.1 megawatt (MW) solar power plant and promote the development of renewable energy in Afghanistan.

The borrower is Barakat Kandahar Solar Energy (BKSE), a special purpose vehicle majority owned by 77 Afghanistan, a subsidiary of 77 Group. The co-borrowers include three subsidiaries of 77 Group. The agreement was signed by Principal Investment Specialist at ADB’s Private Sector Operations Department Ms. Sonali Tang, and Chairman, BKSE, and owner of 77 Group Mr. Suleyman Ciliv. 

“Having a stable, sustainable, and reliable energy source is important for the growth and development prospects of Afghanistan, where power generation and access is one of the lowest in the world,” said Senior Public–Private Partnership specialist at ADB’s Office of Public–Private Partnerships Mr. Mohammed Azim Hashimi. “ADB’s support for this important project will help provide long-term financing that is not available locally to build and operate a state-of-the-art solar power plant in Afghanistan.”

“77 Group would like to thank ADB for paving the way for investors in Afghanistan by supporting the first private sector-financed independent power producer ,” said 77 Group representative and project director Mr. Burak Unsal. “77 Group is keen to work with ADB on future renewable energy investment projects.’’

Afghanistan ranks in the bottom 5% in terms of per capita electricity usage, with only 30% of the country’s population connected to the grid in 2015. In terms of energy mix, solar power accounts for only about 1% or 3 MW of the country’s total installed generation capacity. This is despite Afghanistan having about 220,000 MW of solar power generation potential. The Government of Afghanistan aims to develop the country’s renewable energy generation, including solar power, so it can contribute at least 5,000 MW (40% share) to the national grid by 2032.

The Kandahar Solar Power Project will install a 15.1 MW solar photovoltaic power plant and related facilities, increasing the supply of clean power to the domestic grid in Afghanistan. The power plant will generate about 27.5 gigawatt-hours of electricity annually and avoid 8,500 tons of carbon dioxide emissions. It will also help lift the share of renewable energy in the country’s total installed power generation capacity to between 4,500 MW and 5,000 MW by 2032.

ADB will also administer a $3.85 million loan from the Canadian Climate Fund for Private Sector in Asia II (CFPS II) for the project. CFPS II was established in March 2017 to support greater private sector participation in climate change mitigation and adaptation in low and lower middle-income countries in Asia and the Pacific.

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Mini Grids Have Potential to Bring Electricity to Half a Billion People

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Mini grids, previously viewed as a niche solution, can provide electricity to as many as 500 million people by 2030, helping close the energy access gap, according to a new World Bank report. The combination of falling costs, dramatic increase in quality of service, and enabling policies has made mini grids a scalable option to complement grid extension and solar home systems.

Mini Grids for Half a Billion People: Market Outlook and Handbook for Decision Makers is the most comprehensive study on mini grids to date. It provides policy makers, investors, and developers with insights on how mini grids can be scaled up.  It takes stock of the global market and industry, analyses costs and technological innovations, and shows the importance of microfinance and income-generating uses of electricity.  

Compared with main grid and solar home systems, mini grids are a more viable solution for areas with high population density and medium electricity demand. Extending main grid to serve remote communities is often prohibitively expensive. Globally, at least 19,000 mini grids are already installed in 134 countries, representing a total investment of $28 billion and providing electricity to around 47 million people. Most are deployed in Asia, while Africa has the largest share of planned mini grids.

At present the total mini grid investment in countries with low levels of electricity access in Africa and Asia totals $5 billion. It is estimated that $220 billion is needed to connect 500 million people to 210,000 mini grids in these regions by 2030. Across the globe, countries need to actively mobilize private sector investment. This can be achieved by setting up policies that support comprehensive electrification programs, promoting viable business models, and providing public funding, for example through performance-based grants.

Mini grids are now one of the core solutions for closing the energy access gap. We see great potential for mini grid development at scale and are working with countries to actively mobilize public and private investment,” said Riccardo Puliti, Senior Director of Energy and Extractives at the World Bank. “The World Bank has been scaling up its support to mini grids while helping countries develop comprehensive electrification programs. Our commitments to mini grids represent about one-quarter of total investment by the public and private sector in our client countries. The Bank’s portfolio spans 37 mini grids projects in 33 countries, with a total commitment of more than $660 million. This investment is expected to leverage an additional $1.1 billion in cofinancing.”

In addition to being cost-efficient, mini grids have many other benefits. They have positive environmental impacts: 210,000 mini grids powered by solar energy would help avoid 1.5 billion tons of CO2 emissions globally. They also offer national utilities a win-win solution in the electricity sector by paving the way for more financially viable future grid expansion.

By the time the main grid arrives, significant demand for electricity would already exist and customers would have greater ability to pay through the generation of productive uses made possible by mini grids.

Funding for the report was provided by the World Bank’s Energy Sector Management Assistance Program (ESMAP).

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UNIDO advocates for sustainable energy at EUSEW

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photo: UNIDO

For the second consecutive year, the United Nations Industrial Development Organization (UNIDO) took an active part in the European Union’s Sustainable Energy Week (EUSEW) in Brussels, which focused on ‘Shaping Europe’s Energy Future’. “Ongoing research and collaborative actions between the European Union and Africa are crucial to renew the partnership”, said UNIDO Climate Change Expert Cassandra Pillay. “The aim of this event is to facilitate policy debates and strengthen partnerships between the two continents across private and public sectors”.

Pillay participated in the session “EU-AFRICA Long term Partnership on Sustainable Energy: The Role of Research & Innovation”, with UNIDO also contributing to the “Transport, Energy and Digitalisation – City and Industry Views” session, which was jointly organized by ERTICO-ITS Europe, EUROCITIES, ORGALIM and UNIDO. The session addressed the synergies between the transport, energy and digital sectors to achieve sustainable energy policy goals and aimed at enhancing the value of actions and cross-sectoral work programmes.

The EUSEW is a flagship event organized by the European Commission to bring awareness about renewable and efficient energy use across Europe, which brings together public authorities, private companies, NGOs and consumers to promote initiatives to save energy and move towards renewables for clean, secure and efficient power. More than 4,000 registered participants attended.

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IEA Technology Collaboration Programme holds its third universal meeting

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Innovators and strategic thinkers from around the world discussed key trends in energy technology and research at the meeting. (Photograph: IEA)

Leading energy experts from the public and private sector gathered in Paris on 18 and 19 June for the third universal meeting under the International Energy Agency’s Technology Collaboration Programme (TCP).

Innovation is an essential underpinning of energy sector transitions worldwide. Given the growing complexity and interconnection of energy systems, cooperation and networking can increase effectiveness and maximise the impact of innovation efforts.

“2019 is a key year for innovation at the IEA,” said Dr Fatih Birol, the IEA’s Executive Director. “A more integrated and holistic approach to energy technology innovation is required to reach a sustainable energy future, which means even more partnerships among those in this room.”   

For more than 40 years, the vast amount of research and technology analysis carried out under the TCP network has provided a vital contribution to advancing clean energy technologies worldwide. The TCP currently has some 6,000 participants representing 300 government and industry entities from 54 countries, demonstrating the reach of the TCP’s global innovation network. This body of knowledge supports high-level debates and real-world actions.

The first day of this week’s event was jointly hosted by the IEA Committee on Energy Research and Technology and the IEA Standing Group on Long-Term Co-operation. It brought together policy and decision makers to share experiences on disruptive innovation, technology trends, and partnerships between governments, the private sector and other energy stakeholders.

The meeting provided an opportunity for innovators and strategic thinkers to discuss key trends, which will help to inform future IEA activities related to energy technology, research and innovation. That includes the preparations for the 2019 IEA Ministerial and the 2020 edition of Energy Technology Perspectives, one of the IEA’s major publications.

At the meeting, the IEA unveiled new tools and online resources available under its energy innovation web portal, including a study mapping international partnerships relevant to energy technology innovation in order to identify synergies and foster strategic engagement across initiatives. The IEA Secretariat also outlined plans for a major effort to modernise the TCP legal mechanism, further explore how the IEA can make better use of TCP work and improve communication across the TCP network.

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