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The U.S.-Africa Clean Energy Finance (ACEF) initiative has reached a key milestone in deploying millions of dollars for renewable energy in Africa. In December, the U.S. Trade and Development Agency (USTDA), which links U.S. businesses to global infrastructure opportunities, and the Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, reached commitment of 100% of the initial project funds administered under ACEF. ACEF is an ambitious and innovative program to support early-stage projects to catalyze private-sector investment in the renewable energy sector in sub-Saharan Africa.
Secretary of State Hillary Clinton launched ACEF at the UN Conference on Sustainable Development in 2012 with an initial investment of USD$20 million. At the U.S.-Africa Leaders Summit in August 2014, Secretary of State John Kerry announced the U.S. State Department’s intention to invest an additional USD$10 million.
The ACEF program is designed to help promising clean energy projects develop into viable candidates for financing by providing small amounts of early-stage funding for essential inputs, such as technical and feasibility studies. ACEF serves a catalytic role to advance these projects and help attract private sector follow-on investment, which can help to fuel low-carbon economic growth in the region.
Since the program’s launch, OPIC and USTDA have committed funds to 30 renewable energy projects across 10 African countries. The initial $20 million of funding has the potential to lead to more than 400 MW of new renewable power in Africa and could mobilize more than $1.5 billion in project capital, a ratio of $75 for every $1 from the ACEF program.
ACEF-supported projects span a wide breadth of activities designed to address Africa’s energy challenges, including large- and small-scale projects, both connected to central power grids and serving rural, off-grid communities. Impactful renewable energy projects that are now progressing because of ACEF funds include a 150 MW Senegalese wind farm and a 12 MW run-of-the-river hydroelectric power facility in Rwanda.
“Empowering private investors to lead the way in overseas development is at the heart of OPIC’s mission, as well as that of President Obama’s Power Africa initiative, in which we also effectively partner with USTDA,” said Elizabeth Littlefield, OPIC’s President and CEO. “ACEF is a forerunner in realizing the potential of these private investors, and has helped innovative developers of clean, renewable energy in Africa advance their ideas to receive the financing they need.”
(Photo Credit: magharebia via Flickr)