The European Bank for Reconstruction and Development (EBRD) and two partners will offer $250 million (€227.6 million) in debt and equity funding for renewables projects by private firm in Morocco, Egypt, Tunisia and Jordan.
The bank announced the financing program on Tuesday, saying the first project to be backed by it would most likely be the 120-MW Khalladi wind farm near Tangiers in Morocco. The signing of a financing deal for the latter is expected in the near future.
“For the first time in [the Southern and Eastern Mediterranean (SEMED)] region the private sector is now able to produce and sell clean renewable energy on a commercial basis competing head to head with gas and oil-fired generation,” said EBRD’s Nandita Parshad. The bank expects that the $250 million program will support several new business models, from direct agreements between large renewable energy developers and corporate consumers, such as cement firms and hotel groups, to small-scale generation in communities.
In Tunisia, direct sales to state-owned single buyer STEG are also eligible for financing.
The Climate Investment Funds’ Clean Technology Fund (CTF) will provide up to $35 million for the program and the Global Environment Facility (GEF) will bring up to a further $15 million, the EBRD noted. The Union for Mediterranean will act as a policy dialogue partner.
The EBRD was established in 1991 to help build a new, post-Cold War era in Central and Eastern Europe, the bank said.
It is currently active in more than 30 countries from central Europe to central Asia and the southern and eastern Mediterranean, the EBRD said.
Meanwhile, EBRD aims to work with the newly established Asian Infrastructure Investment Bank (AIIB) to jointly fund large infrastructure projects.
President of the EBRD Suma Chakrabarti said that the combined strength of both organizations could allow them to take on much larger projects.
“What I’d really like to achieve by next year, when the AIIB is running, is to have at least two or three co-finance projects. That’s going to be our main push. Of course we can do other things together, but projects will be a good way to start,” Chakrabarti said.
The EBRD and the AIIB have similar financing models, which would allow them to jointly invest in projects and share revenue, he noted. Opportunities include municipal infrastructure, including waste, water management, public transport and street lighting, he said.