The International Renewable Energy Agency (IRENA) and the Abu Dhabi Fund for Development (ADFD) have officially opened the fifth round of funding for renewable energy projects in developing countries.
The funding round of approximately $50 million is part of ADFD’s $350 million commitment offering concessional loans to renewable energy projects endorsed by IRENA.
Since 2012, the IRENA/ADFD Project Facility has enabled $333 million in loans to 15 renewable energy projects in 14 developing countries. Selected projects thus far have included off-grid, mini-grid and on-grid projects using wind, solar, hydro, geothermal and biomass sources.
Thanks to the first three cycles, more than 68 MW of renewable energy capacity will be brought online, the groups say.
“Many developing countries are blessed with abundant renewable energy resources, yet access to financing can still hinder development,” says Adnan Z. Amin, director-general at IRENA. “IRENA’s partnership with ADFD helps overcome this challenge by offering concessional loans to quality renewable energy projects in developing countries, which then leverage additional investment. Funding from the facility helps boost renewable energy deployment and trigger economic growth, offering sustainable and affordable energy to people with limited or no access to electricity.”
Through the facility, ADFD provides concessional loans ranging from $5 million to $15 million per project. Finance is offered at 1% to 2% lending rates with a 20-year loan period, including a five-year grace period. Loans for each project cover up to half of the estimated project cost, so additional co-financing must be acquired from other sources. To help facilitate additional sources of funding, project developers can register and seek financing sources from IRENA’s Sustainable Energy Marketplace.
Only projects located IRENA member states, signatories of the statute or states in accession are eligible to apply. An international panel will review project applications and base their decisions on technical feasibility, economic/commercial viability, and socio-economic and environmental benefits.
The deadline for applications for the fifth cycle is Feb. 15, 2017. Results will be announced in January 2018.