AFRICA – The African Trade Insurance Agency (ATI) has secured a US$56 million grant from Norwegian Agency for Development Cooperation (NORAD) allocated over an initial period of 5 years.
The grant will be geared towards the continued implementation of ATI’s Regional Liquidity Support Facility (RLSF).
RLSF aims to mobilize private investment into renewable energy projects in Africa while contributing to the achievement of Sustainable Development Goals 7, 8, and 13.
It also targets the development of additional insurance or guarantee products in support of small and medium-sized renewable energy sector initiatives.
The funding from NORAD, which will be split across first loss cash collateral for the various initiatives and technical assistance support for ATI, will be provided by the Norwegian Ministry of Foreign Affairs.
“ATI is proud to be NORAD’s strategic partner on this initiative, which will go a long way in enhancing our renewable energy sector initiatives ,” said Manuel Moses, CEO of ATI.
“Furthermore, this partnership is happening at an opportune moment as Africa is seeing greater interest from the public and private stakeholders in the renewable energy sector.”
RLSF was launched in 2017 to address short-term liquidity risks in financing small and medium-sized renewable energy projects in sub-Saharan Africa, by combining ATI’s suite of insurance products with a liquidity support instrument.
Since its launch, RLSF has supported four landmark solar projects in Burundi and Malawi – enabling over US$150 million in project financing and a total installed capacity of 108.5 MW.
Beyond RLSF, ATI has supported other renewable energy projects across its member countries, enabling an installed capacity of over 500 MW.
In addition to providing support towards RLSF, a portion of the grant will be deployed towards the development of additional guarantees or insurance instruments.
These new instruments will have a particular focus on the off-grid sector and other eligible forms of distributed renewable energy.
ATI’s current gross exposure in direct support towards the generation of renewable energy transactions stands at US$210 million.
To date, Benin, Burundi, Côte d’Ivoire, Madagascar, Malawi, Uganda, and Zambia have already signed the MoU with the expectation that more of ATI’s twenty member countries will follow.
In addition to having access to RLSF, IPPs operational in these countries are able to register for the Transparency Tool.
The Transparency Tool is a web-based platform designed to show payment trends of public utilities – over time, the tool is expected to bring greater transparency to the sector and potentially increase the confidence of investors and other stakeholders.
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