June 27th 2017

Business / News

French govt initiates fund to green East Africa industry

SUNREF East Africa includes a provision for green credit lines provided to local banks in the three countries i.e. Kenya, Uganda and Tanzania of more than Eur 35 million. BOA-T is the first bank to sign for a USD11 million credit line dedicated to energy efficiency and renewable energy sector.

By Jack Otwalanewsdesk@kenyafreepress.comFriday, 24 Feb 2017 18:28 EAT

The French government’s international development arm, Agence Française de Développement (AFD), today launched its green finance label SUNREF in Tanzania. In partnership with Kenya Association of Manufacturers (KAM) and Confederation of Tanzania Industries (CTI), AFD hosted over 70 key energy players at the inaugural SUNREF East Africa launch in Dar-es-Salaam.

SUNREF East Africa promotes the development of a low carbon economy in the region by financing the development of renewable energy and energy efficiency solutions in the private sector. To support private investment in green energy and energy efficiency, AFD works with local partner banks in the host country by supporting them in identifying green investment opportunities and in allocating green loans with favorable conditions for tailor-made debt.

In line with SUNREF objectives, this event aimed to explore key challenges facing the renewable energy and energy sectors in Tanzania, and to propose solutions to promote green financing opportunities. The event involved partners and prospective banks, renewable energy and energy efficiency sector players, public authorities and influencers, prospective project sponsors, the donor community and development agencies as well as the media.

All speakers called for the public and private sectors' involvement in developing green economy. Addressing participants, the French Ambassador to Tanzania H.E. Madam Malika Berak said the French Government was committed to continued investment in clean energy and the fight against global warming through the SUNREF programme, which operates in over 70 countries across the world.

Mr Emmanuel Baudran, the AFD country representative, underscored the huge economic development potential presented by the transition towards a green economy. "Green growth provides the private sector with opportunities in the fields of energy management, sustainable natural resources management and environmental protection. With the customized financing from AFD, investments in green energy and energy efficiency solutions is now possible in Tanzania," he said.

The Head of Delegation of the European Union in Tanzania, H.E. Mr. Roeland Van De Geer, highlighted the need of an enabling environment with optimal government policies and regulatory frameworks as a catalyst for mobilisation of private sector investment in renewable sources of energy and energy efficiency. "Once the rules of the game are clearly set, investments will follow. If we get there, it is a win-win situation for all, with increased growth and industrialisation as a result of energy being expanded"

Also present was Mr Styeden Rwebangila, the Acting Assistant Commissioner (New and Renewable Energy) Ministry of Energy and Minerals. USD11 million is already available for lending to renewable energy and energy efficiency projects in Tanzania for financing through Bank of Africa Tanzania (BOA-T).

In partnership with BOA-T, this credit line gives the private sector greater access to bank financing to implement renewable energy and energy efficiency projects by giving them concessional loan characterized by low interest rates, long tenor, and long grace period. The SUNREF East Africa has attracted a number of projects which are at various stages of review and development from such sectors as manufacturing, services and agriculture. 

SUNREF East Africa includes a provision for green credit lines provided to local banks in the three countries i.e. Kenya, Uganda and Tanzania of more than Eur 35 million. In November 2016, BOA-T became the first bank to sign for a USD11 million credit line dedicated to energy efficiency and renewable energy sector. Other banks will be approached to join.

Apart from the credit line in Tanzania, partner banks in the region include Cooperative Bank of Kenya, Commercial Bank of Africa and Diamond Trust Bank in Kenya and Uganda.

Speaking from Nairobi, KAM Chief Executive Ms Phyllis Wakiaga noted that, "Through this project, Tanzania's private sector has the opportunity to access financing for investment in renewable energy which in turn will cut down energy costs, enhance productivity and provide sustainable operations of organizations with long-term benefits to the local economy."

SUNREF East Africa enjoys a pool of over 70 experts drown from KAM and international experts who provide technical assistance to project developers and partner banks in the areas of project origination, project bankability, capacity building and awareness creation. This technical assistance is a courtesy of the European Union.

Jack is a business and society writer at the Kenya Free Press





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