Abu Dhabi Fund for Development (ADFD), together with the International Renewable Energy Agency (Irena), has awarded US$57 million in loans for renewable energy projects in five developing countries including Iran and Mauritania.
The facility will provide a total of $350m in soft loans over seven funding cycles. The first selection cycle began in November 2012.
This year’s award winners come from Argentina, Cuba, Iran, St Vincent and the Grenadines and, for a second time, Mauritania. Two awards will be for geothermal energy including a first-of-its-kind in Iran. The 5 megawatts small-scale geothermal project, located in Ardebil, will receive $6m to help provide local heating and power for various agricultural activities benefiting 150,000 people.
Mauritania will get $6m for a project using solar and wind.
“We are keen to support the economic development and deployment of sustainable energy projects in countries with immense clean energy potential, but lacking necessary financial resources and project management expertise,” said Adel Abdulla Al Hosani, ADFD director of operations.
The second tranche of funding will involve soft loans provided for green projects totalling 35MW – enough to supply power to more than 280,000 people in rural communities. These areas are usually located far from the main electrical grid, forcing residents to use alternative sources of power such as kerosene.
For the least developed countries, loans are provided at a 1 per cent flat rate with more developed countries receiving a 2 per cent interest rate over 20 years. In addition, the award recipients have a five-year grace period to start repayments.
The Irena director general Adnan Amin said that in both tranches, projects submitted had a total combined value between $800m and $1 billion and were all feasible.
“It shows that there is a huge reserve of possibilities for investment that exist,” Mr Amin said. “So we had to select the most bankable, most ready and most innovative projects with the biggest impact on people.”
Mauritania will submit another project for the next cycle.
The West African country has received funding for renewable energy from Abu Dhabi’s Masdar. Last April the company inaugurated a 15MW solar photovoltaic plant that helps to power 10,000 homes. Dah Sidi Bouna, Mauritania’s ministry of petroleum and energy director, said the project has generated about $4m in savings from fuel consumption during the first year.
The project, constructed in just four months, cost $31m and will have a return on investment after seven years.
On Wednesday Masdar and the government of Mauritania will sign an agreement for another 11MW solar PV plant. The scheme will power seven communities in the country and is expected to come online by the end of this year.
The director added that Mauritania will launch a 50MW solar PV plant tender, to be financed by the Arab Fund for Economic and Social Development, and it also has a 100MW wind project in the pipeline.
“We’re hoping to attract more Emirati companies to invest in [Mauritania’s energy sector],” Mr Bouna said.
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