POWERING A CLIMATE-SMART AFRICA

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  • POWERING A CLIMATE-SMART AFRICA EnErgy, EnvironmEnt and climatE changE dEpartmEnt

    African Development Bank Group

    2012 Summary of Activities

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  • Acknowledgments

    This report is a product of the Energy, Environment and Climate Change Department (ONEC) of the African Development Bank Group (AfDB). It has been produced under the guidance of Hela Cheikhrouhou, the Departments Director, to summarize the teams work in 2012.

    2013 African Development Bank GroupAll rights reserved. Published 2013Printed and designed in Tunisia

    Energy, Environment and Climate Change Department

    Powering a Climate-Smart Africa

    By making any designation of or reference to a particular territory or geographic area, or by using the term country in this document, AfDB does not intend to make any judgments as the legal or other status of any territory or area.AfDB encourages printing or copying information exclusively for personal and noncommercial use with proper acknowledgment of AfDB. Users are restricted from reselling, redistributing or creating derivative works for commercial purposes without the express written consent of the AfDB.Note: In this report, $ refers to US dollars.

    African Development Bank GroupTemporary Relocation AgencyAngle de lavenue du Ghana et des rues Pierre de Coubertin et Hdi NouiraB.P. 323 1002 Tunis Blvdrewww.afdb.org

    http://www.afdb.org/

  • ivpoWEring a climatE-Smart aFrica

    Contents

    Acknowledgments iii

    Abbreviations list vi

    Maps and Graphs vii

    Introduction 1

    ThE ENERGy, ENvIRONMENT ANd CLIMATE ChANGE dEPARTMENT 2The Departments Mission 3

    A Multi-Disciplinary Team of Experts 4

    Energy for All on a Lower-Carbon and Climate-Resilient Growth Path: Our Vision 4

    Leveraging Financing 5Climate Financing Instruments: Mobilizing Important Concessionary Resources 7

    Trust Fund Financing 7

    Private Financing 7

    PROMOTING AFRICAS GREEN ANd CLIMATE-RESILIENT GROWTh 11Providing Advisory services on Climate Change and Environment for Bank-Wide Operations 13

    Brokering Knowledge in Energy, Environment and Climate Change 13

    Operationalizing Bank Compliance with Environmental and Social Safeguards 18

  • vpoWEring a climatE-Smart aFrica

    Mobilizing Innovative Concessional Climate Finance 18Toward a Climate-Smart Africa: the Climate Investment Funds 18

    The Global Environment Facility: Financing the Additional Cost of Adaptation to Climate Change 23

    Unlock Private Investments in Sustainable Energy: the Sustainable Energy Fund for Africa 25

    African Carbon Support Program: Easing Access to Carbon Markets 25

    ENSuRING ACCESS TO MOdERN ENERGy SERvICES 28Powering the Future 29

    Addressing the Challenges of Energy Access Using Untapped and Renewable Energy Sources 35

    Completed Projects in 2012 35Approved Projects in 2012 36

    Looking Ahead 38

    ENERGy, ENvIRONMENT ANd CLIMATE ChANGE dEPARTMENT - STAFF LIST 40

  • vipoWEring a climatE-Smart aFrica

    Abbreviations list ACSP Africa Carbon Support Program

    ADB African Development Bank

    ADF African Development Fund

    AfDB African Development Bank Group

    CDM Clean Development Mechanism

    CIF Climate Investment Funds

    CO2 Carbon Dioxide

    CTF Clean Technology Fund

    FAPA Fund for African Private Sector Assistance

    FIP Forest Investment Program

    GHG Greenhouse Gas

    GEF Global Environment Facility

    GW Gigawatt

    ICT Information and Communications Technology

    MENA Middle East and North Africa

    MW Megawatt

    NTF Nigeria Trust Fund

    ONEC Energy, Environment and Climate Change Department

    OPSM Private Sector Department

    OSAN Agriculture and Agro-Industry Department

    PIDA Program for Infrastructure Development in Africa

    PPCR Pilot Program for Climate Resilience

    PPP Public Private Partnership

    SCF Strategic Climate Fund

    SEFA Sustainable Energy Fund for Africa

    SSA Sub-Saharan Africa

    SREP Scaling Up Renewable Energy Program in Low Income Countries

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  • viipoWEring a climatE-Smart aFrica

    Maps and GraphsMap 1 Addressing the Main Challenges 27

    Map 2 ONEC Active Projects in 2012 31

    Map 3 Projects Approved in 2012 37

    Figure 1 The Activities of the Energy, Environment and Climate Change Department 3

    Figure 2 ONEC Vision 5

    Figure 3 Financing Instruments Relevant to Energy, Environment and Climate Change Work 6

    Figure 4 ONEC 3 Activities 12

    Figure 5 Presentation of the Climate Investment Funds 16

    Box 1 Zambia Itezhi Tezhi Hydro Power Plant and Transmission Project 9

    Box 2 Sierra Leone Mainstreaming Green Growth for Agenda for Prosperity 14

    Box 3 Kenya Menengai Geothermal Powerplant 16

    Box 4 Environmental and Social Assessment of the Nairobi-Thika Superhighway 18

    Box 5 Morocco Ouarzazate Concentrated Solar Power Plant 21

    Box 6 Mozambique PPCR Baixo Limpopo Irrigation and Climate Resilience Project 23

    Box 7 African Climate Technology Finance Center and Network 25

    Box 8 Ethiopia-Kenya Interconnection Project - Access to Carbon Financing 26

    Graph 1 AfDB Climate Finance 2011-2012 17

    Graph 2 Evolution of GEF Councils Annual Commitments for AfDBs Projects 24

    Graph 3 AfDB Loans and Grants Approvals by Sector, 2012 29

    Graph 4 Public and PPP Energy Portfolio by Financing Window 33

    Graph 5 Public and PPP Energy Portfolio by Region 34

    Graph 6 Public and PPP Energy Portfolio by Area of Intervention 34

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  • 1poWEring a climatE-Smart aFrica

    Introduction Despite more than a decade of consistent economic growth across the African continent, the majority of Africans today still light their houses with expensive, dirty kerosene; cook their food with hand-gathered wood or charcoal; and spend much of their working hours cultivating small food plots to ensure their own subsistence. A significant amount of work remains to be done to increase Africans access to energy while mitigating the environmental and social risks of climate change to ensure sustainable development.

    To help meet these challenges, the African Development Bank (AfDB) created the Energy, Environment and Climate Change Department (ONEC) in May 2010. The establishment of this Department brought these three interlinked themes under one operational unit, concentrating the necessary skills and financial resources to tackle these operational priorities and to deliver tangible results for the Banks Regional Member Countries (RMCs).

    The creation of the Department brought together new and existing expertise into one team to enable innovative strategic and operational thinking with the goal of leading the work of the Bank toward a more sustainable development pathway for Africa. It works on integrating a Bank-wide strategy for energy sector interventions financed by the Banks financing windows and concessional funds, such as the Climate Investment Funds, with a complementary framework on Green Growth and climate change mainstreaming. It responds directly to the call of Bank shareholders to pursue a more powered, more climate-resilient, and greener Africa.

    This report summarizes the work undertaken by the Bank in 2012 in the areas of energy, environment and climate change, highlighting its operations and activities. It demonstrates that the AfDB is at the forefront of institutions seeking to support both the development of African energy infrastructure and address the challenges of climate change and environmental degradation on the African continent.

  • ThE ENERGy, ENvIRONMENT ANd CLIMATE ChANGE dEPARTMENT

    Part one

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  • 3poWEring a climatE-Smart aFrica

    The Departments MissionOur mission is to spearhead the Banks investments, advisory services, knowledge generation and capacity building in the areas of energy, environment and climate change. The Department is in charge of developing and managing the Banks public-sector energy portfolio. Through its Environment and Climate Change Division, the Department provides analytical advisory services on climate change and environment for sector operations. It also coordinates the mobilization of innovative climate and environmental finance to pave the way for Africas green and climate-resilient growth.

    Figure 1: The Activities of the Energy, Environment and Climate Change Department

    Energy, Environment and Climate Change Department ONEC

    Energy ONEC 1 and ONEC 2

    Environment and Climate Change for Sector Operations ONEC 3

    Deliver Analytical and Advisory ServicesMobilize Innovative

    Climate and Environmental Finance

    Develop and Manage the Bank's Public-Sector Energy Portfolio

    North, West and Central Africa

    ONEC 1

    East and South AfricaONEC 2

    CIF - GEFSEFA - ACSP

    Due Diligence for Projects Compliance

    with Bank's Environmental and Social Safeguards

    Operationalize and Mainstream Climate Change

    Co-lead Green Growth

    Activities

    Climate Finance Tracking

  • 4poWEring a climatE-Smart aFrica

    A Multi-Disciplinary Team of Experts Over the past three years, the Department has grown and now has a team of 73 specialists with a wide range of relevant expertise in energy, environment and climate change. Presently ONEC has 37 dedicated energy experts, including 5 in renewable energy, 11 environmental and social experts, 11 climate change experts and 14 support staff and consultants. The Department