Bridging the gap between projects and funding in Africa
Last month Access Infra Africa ("˜Access'), a developer, owner and operator of power assets in Africa, launched the Access Co-Development Fund ("˜ACF'), a US$ 5 million competition designed to bridge the gap between early stage renewable energy projects in Africa and the expertise and funding they require to come to operation. Solar International spoke to the Program Director, Karim Megherbi Megherbi to find more about the program.
Q. What is the ACF?
ACF is a platform which provides both technical assistance and funds to finance the development costs of renewable energy projects until financial close. Access will then arrange the financing, in equity and debt, of the projects which were successfully developed under the ACF program. This means that developers that are selected under the ACF program will focus on the development of their project, the financing being handle by ACF and Access, while they benefit at the same time of the support of the full team of Access.
Q. Who launched the ACF and why?
ACF was launched by Access, so this is a fully private initiative. We believe that there is a lot of interesting projects on "stand by" in Africa, many motivated developers lack the necessary funds to achieve their goal. But the money is clearly not the only issue. To successfully develop a power project in Africa you need an extensive range of expertise, a strong team which has experience in structuring such projects. In particular the legal and financial schemes, as well as the risk management during the development phase, are challenging. This is where we come in: our goal is to transform the most interesting projects/concepts initiated by local developers into a reality. This will be an exciting journey for all of us.
Q. Why does early stage development in Africa matter?
The early stage development money is the most difficult to raise and the most difficult to manage. On one hand, only few people are interesting in your project at first, essentially because nobody is willing to loose time on something which is uncertain. So at the beginning, the most common reaction you see is "come back when you are more advanced" "“ which means that you still need to spend money and make studies before coming back. On the other hand, when you were able to raise some funds at the beginning, the use of it is very strategic: it should be spent appropriately in order to build a strong case which will lead you to the next level and basically increase the probability of success of your project. ACF will address both issues.
Q. Explain the partnership with the Africa Energy Forum?
As you know the AEF has been growing extensively in the recent years, proving high quality of organization as well as enlisting growing interest of investors in the Africa Energy market. We are very pleased to be collaborating with the AEF on this initiative. There will be a plenary session dedicated to ACF at this year's AEF in Dubai, where the 5 shortlisted developers will be able to present their projects to an expert panel at the AEF. This will be really exciting and novel.
Q. Who can apply and what are the criteria?
Everybody can apply. We wanted the competition to be as wide as possible. All commercial power generation projects are welcomed, as long as it is based on the African continent and that it uses renewable or hybrid technologies. The scoring will be based on technical, commercial and environmental and social aspects.
Q. How do projects apply to be considered for the ACF?
We wanted the process to be as simple as possible, so there is only one form to fill with documents to attach, if any. Interested applicants can download the form and guidelines from at http://access-power.com/access-co-development-fund-acf-launched/. The documentation package is sent to the ACF email address (ACF@access-power.com) and the application will be taken into account immediately. All enquiries should be directed to same email.
Q. Who is judging and what are they looking for?
There will be two steps in the process: first Access's team will review the proposals and will make a shortlist of 5 projects based on the criteria and methodology described in the guidelines. Then the final decision on who can benefit from the 5M USD budget will be made by the expert panel made up of senior representatives of IFC, FMO, Trinity LLC, Eren, and Access. I guess we can say that what everybody is looking for are projects that make sense, are commercially viable and that will improve the environment, supported by a team which will be able to work closely with Access' team.
Q. What are the expected benefits of the ACF?
Obviously the realization of up to 5 projects and their impacts on the environment will already be a big achievement. But we think that ACF will also generate a lot of interest within the DFI world that the relationship between the development institutions and the private sector will soar higher. This could potentially leverage the fund available and their social and economic impact.
Q. What is the timeline for the ACF? Where can potential applicants find more information?
The application period is short: from the 1st of April until the 20th of May. The shortlist will be communicated shortly after the end of the application period, together with an invitation to the AEF to the shortlisted companies. The plenary session will take place at the AEF in Dubai on the 11th of June. Applicants can find more information on Access website www.access-power.com
Q. Has this ever been done before?
ACF is unique in a sense that the funds can be dedicated to very early stage development and that the assistance will be provided on a daily basis, with a full team backing the local developers. What's more, I think this is the first initiative of this kind fully designed and managed by the private sector. A blend of both expertise for early stage development focused on the African Energy projects is certainly unique and novel.
Q. Is there any previous offering to refer to?
It is the first of its kind.
