The African Development Bank (AfDB) has approved a $27 million and €10 million loan package to co-finance a 100MW solar power plant in Kairouan, Tunisia.
The approval covers $10m plus €10m from the AfDB, with $17m in concessional financing from the Sustainable Energy Fund for Africa (SEFA). Additional finance will come from the International Finance Corporation (IFC and the Clean Technology Fund (CTF).
The project is to design, construct and operate a 100MW solar PV plant under a build, own and operate scheme. It is located in El Metbassta in the Kairouan North Region, about 150km south of Tunisian capital, Tunis. It is one of five renewable projects awarded in 2019 by the government.
Société Kairouan Solar Plant S.A.R.L., developed by Dubai-based AMEA Power, will manage the project.
Renewable energy projects in Tunisia become more feasible and bankable
Dr Kevin Kariuki, AfDB vice-president of power, energy, climate and green growth: “The 100MW Kairouan Solar PV Project will not only be a pioneer for other grid-based solar and wind independent power projects currently under development in Tunisia but also a benchmark for bankability of renewable energy projects in the country as it is underpinned by robust and sustainable agreements negotiated over the last three years under extremely onerous market conditions.”
The Kairouan Solar project aligns with Tunisia’s Nationally Determined Contribution and goal of reducing carbon emissions through the transition to renewable energy sources. It is also consistent with the African Development Bank’s New Deal on Energy for Africa and the “Light up and Power Africa” High-5 strategic priority.
Wale Shonibare, AfDB director of energy financial solutions, policy and regulation: “The success of the transaction, which has reached the highest bankability standards following months of negotiations with the Tunisian authorities, provides a useful template for future projects that will help move the country closer towards achieving the government’s 35% clean energy target.”
Dr Daniel Schroth, the Bank’s Director of Renewable Energy and Energy Efficiency in charge of SEFA, noted that the special fund’s concessional terms under the programme will likely absorb the COVID-19-related project cost increase and maintain the project economics to acceptable levels to achieve financial close. “The Kairouan solar project epitomises the catalytic effect of SEFA in support of developers to deliver sustainable renewable projects that aid Africa’s energy transition,” he said.
Source: esi-africa
