Developing the Concentrated Solar Power in MENA Region

Developing the Concentrated Solar Power in MENA Region Ms. Hela Cheikhrouhou Division Manager Infrastructure Finance, Private Sector Operations, Af. DB MENASOL Conference- Cairo, May 2010 1

Who We are • Af. DB is the Pan-African Multilateral Development Bank • Infrastructure Finance, Private Sector Development, and Regional Integration are institutional top priorities • Af. DB leverages its AAA balance sheet to support the economic development in its regional member countries • Af. DB has consistently been a major financier to the Energy Sector in North Africa • Originator for Clean Technology Fund Co-financings in Africa, along with WBG 2

Af. DB has 2 lending windows: Public and Private Af. DB’s lending operations Public window Private window Recipient Governments or state owned enterprises - Privately owned enterprises - “Financially strong” government owned enterprises Guarantee Sovereign Non sovereign Concessionary terms Commercial terms Financial terms 3

The Af. DB selects its private instruments to meet investee company’s needs • Senior Debt – tenor and currency adapted to project needs; debt arranging capacity: – African Financing Partnership– DFI co-financing platform – A-B Syndication Program– leveraging the Af. DB Preferred Creditor Status • Guarantees – partial risk, partial credit • Subordinated Debt • Equity – direct, or indirect (equity funds) • Technical Assistance, incl. for carbon credits 4

Key Private Investment Selection Criteria • Consistency with Af. DB Strategy in the Regional Member Country • Commercial Viability • Expected Development Outcomes • Af. DB Additionality 5

The Af. DB is actively building a pipeline of Clean Energy Investments across the Continent • • • Hydro Power Wind energy Co-generation Geothermal. . . Solar Power (Mainly CSP) 6

Sample Past Clean Investments : Project name • Bujagali Hydropower IPP Country Uganda • Beni Matar Solar/Gas Morocco Thermal Power Station • Kuraimat Solar/Gas Egypt Thermal Power Station Capacity (MW) 250 MW 30 MW Solar 150 MW 7

Af. DB is working with North African Governments, IFIs and interested private investors to support Solar Energy Scale-up. Why? parabolic trough (PSA) solar tower (SNL) linear Fresnel (Solarmundo) parabolic dish (SBP) 8

Areas physically favorable for CSP development (DLR, 2005) 9

Levelized Costs of CSP technologies as compared to gas fired power plants (Unit: US$/MWh) 10

Cost of CSP Power Generation by Location 11

Advantage of Solar Scale-up program in MENA (1) ØMENA region has amongst the best physical conditions for solar power in the world ØCSP is of particular interest to utilities due to scalability and dispatch-ability ØExploiting the potential scale economics in MENA will help accelerate global adoption of CSP through unit cost reductions 12

Advantage of Solar Scale-up program in MENA (2) ØGrowing strategic importance of renewable energy in the Mediterranean and Gulf region including for regional integration ØGood potential for enhancing local content through technology transfer ØPossibility of “green” stimulus packages that create employment through investment in transmission, generation, and equipment manufacturing 13

Renewable energy targets in North African countries Algeria Egypt 2017: 5 % power generation based on renewable energy 2025: 10 % power generation based on renewable energy 250 MW CSP planned based on feed-in tariffs (300 % bonus-system) 450 MW cogeneration 2010: 3 % electricity demand from renewable energy 2020: 20 % of the electricity from renewable energy, of which 12 % from wind Planned feed-in tariff for smaller plants (wind, solar) 2020 : 42 % contribution of renewable energy to electricity generation Renewable law approved by Council of Ministers- now due for Morocco Parliamentary approval Target for CSP: 2000 MW by 2020 Tunisia 2012: 4 % contribution of renewable energy Investment incentives for renewable Feed-in tariffs and self-generation policy for renewables expected 14

CSP Projects in Clean Technology Fund Investment Plan Country No. of Projects Location Capacity (MW) Est. cost (US$ million) CTF Contribution (US$ million) Algeria 3 Megahir Naama Hassi R’mel II 80 70 70 322 285 58 51 51 Egypt 2 Kom Ombo Marsa Alam[1] 70 30 370 270 51 44 Morocco 3 Tan[2] Ain Beni Mathar Ouarzazate 50 125 100 240 525 440 35 90 72 Tunisia 3 IPP-CSP Project ELMED-CSP Tunisia-Italy transmission 100+ 450 1140 73 73 40 Total 11 ~800 MW 4, 800 640 [1] This is a project with 8 hr storage so the size of the solar field will be equivalent to a 60 MW project. [2] This is a CSP-desalination project 15

Objectives & Rationale: • Increase the production capacity using clean energy resources in order to secure the energy mix and reduce GHG emission • Development and promotion of clean technology • Possibility for Export of electricity to Europe • There is possibilities to combined the technology with other renewable resources (Hybrid system) • Possibility to benefit from the carbon credit 16

Possible Transmission lines within North Africa and to Europe 17

Parameter overview for transmission lines Transmission Line Length Morocco-Spain Capacity Voltage 1] Costs Technology MW 60 HVAC 2 x 700 400 Existing 3. 0 150 Algeria-Spain 240 HVDC 2 x 1000 400 Feasibility studies 2. 4 650 Algeria-Italy 800 HVDC 1000 500 Feasibility studies 5. 0 975 Tunisia-Italy 400 HVDC 500 400 Feasibility studies 3. 1 780 Libya-Italy 580 HVDC 1000 400 Feasibility studies 4. 0 650 km k. V Status Losses[ % Mio. US$ 18 [1] Losses of HVDC: based on Nor. Ned

Summary: In order to enable the implementation of the CSP Projects there will be need for: • Concessional Financing • Clear policy (national & international) • Costs reduction by increasing production of unit number • Local production • Capacity building 19

THANK YOU h. cheikhrouhou@afdb. org 20