Capitalizing on renewable energy, especially in these days when climate change has been exacerbated by a multitude of natural and man-made factors, is of paramount importance in helping countries secure healthy economic growth and a safe ecological future.
With this in mind, a concerted effort to unlock funding and accelerate renewable energy development across the African continent needs to be channeled, thereby creating a viable platform for discussing a range of ideas in this regard.
Among the many concerned bodies in this field, the International Renewable Energy Agency (IRENA) has come to the forefront, running a multitude of activities aimed at intensifying renewable energy projects. As its name suggests, it is duty-bound to facilitate conditions that can help African states and beyond benefit from expanding renewable energy both on the continent and globally.
Through the Accelerated Partnership for Renewables in Africa (APRA), a country-led alliance supported by IRENA as Secretariat and with an implementation office established by United Nations Office for Project Services (UNOPS) in Nairobi, efforts are underway to accelerate the energy transition, enhance energy access, and support green industrialization through finance mobilization, private sector engagement, and capacity building. In Ethiopia, APRA activities are being implemented in close collaboration with the Ministry of Water and Energy, supporting the country’s efforts to expand access, diversifies its energy mix, and attracts private investment.
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Keeping this in mind, The Ethiopian Herald recently attended a high-level consultative conference on renewable energy financing held in Addis Ababa under APRA, with the aim of acquiring relevant information on the issue under discussion. The conference has targeted project developers, project advisors, financial institutions interested in funding renewable energy projects, as well as government ministries with responsibility for renewable energy development and related policy making and other stakeholders.
The event aimed to strengthen the capacities of local stakeholders in structuring renewable energy projects to improve their bankability and access to finance. Delivered in collaboration with the Ministry of Water and Energy, the event provided technical training and served as a platform for project developers and financiers to engage in dialogue around upcoming project opportunities. Selected projects in Ethiopia may be considered for presentation at the next APRA Investment Forum in Sierra Leone.
Discussions took place with electric companies, utilities, several private sector players, and local banks in order to assess the current condition of renewable energy financing in the country.
To support progress and accelerate project financing in developing countries, including APRA members, IRENA is leveraging the Climate Investment Platform (CIP) and its Energy Transition Accelerator Financing (ETAF) Platform, which are designed to facilitate access to financing. The Agency is also providing technical assistance, widening areas of engagement, and building the capacity of project developers from both the public and private sectors to help them improve performance and implementation methods before submitting projects to financing partners.
According to an IRENA expert on the ground, IRENA has two major financing platforms. The first is the Climate Investment Platform (CIP), which supports medium-scale projects from the early stage until they are ready for financing. CIP already has 90 partners that can provide various forms of investment capital, including commercial debt, equity, and grant opportunities.
ETAF, on the other hand, which was set up at COP27 in Egypt, has mobilized more than USD 4 billion in pledges to accelerate the energy transition by 2030 through strategic partnerships with leading renewable energy financing and de-risking entities. By leveraging IRENA’s convening power, ETAF identifies renewable energy projects from its member countries and connects them with de-risking and financing solutions provided by its partners.
“Financing partners are doing their best to work together,” said an IRENA representative on the ground. “One of the ways to do this, on behalf of IRENA, is to set up regional investment forums where stakeholders are brought together to conduct high-level dialogue among ministers and heads of government to directly discuss the critical barriers to financing climate solutions.”
According to him, IRENA has strong convening power because of its global membership. As a global intergovernmental agency with more than 170 member states, including the EU, it convenes sessions on key issues and works to mitigate hurdles. He stressed that the Agency raises awareness and engages directly with relevant stakeholders who influence policy and legal frameworks, in order to remove barriers to access finance and deploy more capital in respective countries.
The formation of APRA follows the passing of the Nairobi Declaration on Climate Change by African leaders–a resolution that calls for substantial reforms to the way international collaboration works. Through APRA, collaboration is tailored to deliver on national priorities, focusing on rapid energy transitions, securing sustainable livelihoods, and fostering green industrialization across Africa.
No doubt, increasing the number of projects is key to making progress, and through APRA, African countries can advance their socio-economic development goals and accelerate progress by mobilizing investment and strengthening global partnerships to drive resilient, long-term outcomes. APRA’s membership will expand to engage more countries with high ambitions for renewable energy and green industrialization in Africa and beyond, it was learnt.
Since Africa remains the least electrified region, receiving insufficient global energy investment, APRA, a country-led alliance supported by IRENA and international partners aims to enhance energy access through finance mobilization, private sector engagement, and capacity building. In Ethiopia, APRA activities are being implemented in close collaboration with the Ministry of Water and Energy, supporting the country’s efforts to expand access, diversifies its energy mix, and attracts private investment. Strengthening the capacity of developers, financial institutions, and policymakers in project finance is essential to scale renewable energy deployment and secure sustainable investment.
The core role of APRA is to accelerate the deployment of renewable energy in African countries by enhancing energy access, promoting green industrialization, and improving economic and societal resilience. It achieves this by providing a platform for African governments and stakeholders to lead energy transitions, mobilizing public and private sector commitments, and fostering international cooperation to unlock climate finance and technical support for renewable energy projects.
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Renewable Energy Advisor with the Ministry of Water and Energy, Temesgen Tefera on his part stated that the workshop aims at enhancing the capacities of local stakeholders in Ethiopia in structuring renewable energy projects, which target at getting access to financing via The International Renewable Energy (IRENA) Climate Investment Platform (CIP) and Energy Transition Accelerator Financing (ETAF) Platform.
He said, “The workshop will be focusing on some aspects of project finance and development, emphasizing the appraisal, ratios and proposal development. Extensive one-on-one sessions with the developers are scheduled to discuss individual projects in detail, providing tailored advice and support. The workshop highlighted IRENA’s different project facilitation initiatives (CIP and ETAF) on offer to member countries, and gives an overview of the respective submission, review, and evaluation process as well as expected timelines of the initiatives.”
As to Temesgen, depending on the availability of policymakers, relevant ministries and institutions, bilateral meetings will take place to understand local initiatives, opportunities and challenges. These bilateral meetings will be accompanied by moderated discussions between policymakers and developers to clarify permit and policy-related aspects, fostering better understanding and collaboration.
In sum, renewable energy projects harness naturally replenishing energy sources, such as solar, wind, geothermal, hydro-power, and biomass, to generate electricity and heat. These projects have to be well replicated to come up with a healthy environment and pollution free offering alternatives to fossil fuels thereby contributing to reduced greenhouse gas emissions, decentralization of energy supply, and economic opportunities.
