Africa-focused Renewable Energy Initiative Reaches Full Commitment of Initial $20 million Investment
January 12, 2015
WASHINGTON – 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 $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 $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 megawatts 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 megawatt Senegalese wind farm and a 12 megawatt run-of-the-river hydroelectric power facility in Rwanda.
“USTDA is proud of our efforts to link U.S. industry expertise and financing to help develop clean energy across sub-Saharan Africa,” said USTDA Director Leocadia I. Zak. “We look forward to continuing to work with our partners from OPIC and State under the next phase of ACEF.”
“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.”
“ACEF is an excellent example of how we can use limited public resources to leverage the private financing necessary to fuel low-carbon growth in developing countries – a key step in meeting the challenge to address climate change,” said Todd Stern, U.S. Special Envoy for Climate Change at the U.S. State Department.
The U.S. Trade and Development Agency helps companies create U.S. jobs through the export of U.S. goods and services for priority development projects in emerging economies. USTDA links U.S. businesses to export opportunities by funding project planning activities, pilot projects, and reverse trade missions while creating sustainable infrastructure and economic growth in partner countries.
OPIC is the U.S. Government’s development finance institution. It mobilizes private capital to help solve critical development challenges and in doing so, advances U.S. foreign policy. Because OPIC works with the U.S. private sector, it helps U.S. businesses gain footholds in emerging markets, catalyzing revenues, jobs and growth opportunities both at home and abroad. OPIC achieves its mission by providing investors with financing, guarantees, political risk insurance, and support for private equity investment funds.
Established as an agency of the U.S. Government in 1971, OPIC operates on a self-sustaining basis at no net cost to American taxpayers. OPIC services are available for new and expanding business enterprises in more than 150 countries worldwide. To date, OPIC has supported more than $200 billion of investment in over 4,000 projects, generated an estimated $76 billion in U.S. exports and supported more than 278,000 American jobs.