Page 11 - AfrElec Week 25

AfrElec
NEWS IN BRIEF
AfrElec
But campaigners argue the scheme is costly, damaging and out of kilter with the global switch towards renewables, which are safer and increasingly cheaper. e station was to burn coal imported from South Africa, and would have been the rst country in the region to establish such a fossil fuel plant.
ExxarosaysEskomwoesto hit coal production
South Africa’s Exxaro Resources expects coal production to fall by 5% in the rst half of 2019 mainly because of reduced demand from struggling state-owned power utility Eskom.
It added it expects domestic coal demand and pricing to remain stable for the remainder of the year, but does not see a recovery from the international price/demand situation.
Slowing economic growth in China is weighing on demand expectations for thermal coal in the world’s biggest market for the fuel, while global moves towards cleaner energy are compounding problems arising from a glut in supply. e supply-demand tandem is likely to keep prices for coal used in power plants under pressure in coming months.
Exxaro Finance Director Riaan Koppeschaar said in a statement a contractual agreement with Eskom would help mitigate the reduced volumes at home.
“China will continue to in uence the supply/demand balance in the Paci c with related potential price volatility,” he added.
Coal capital expenditure (capex) in 2019 is expected to be 9% lower than guided in March, primarily because of delays with the Grootegeluk 6 plant expansion project.
Delays in nalising approvals for abametsi coal- red power plant and lenders withdrawing their funding to old coal technology coal- red power stations also contributed to the lower capex spend forecast.
Exxaro is also feeling the impact of Group Five’s cash- ow problems which resulted
in the struggling construction rm being placed under “business rescue”, similar to U.S. Chapter 11 bankruptcy protection in March.
During the rst quarter, Exxaro was forced to terminate its contract with now de-listed Group Five, who was responsible for parts of the Grootegeluk 6 expansion.
FINANCE
MDBclimatefinancehits
record high of $43.1bn in
2018
Climate nancing by the world’s largest multilateral development banks (MDBs) in developing countries and emerging economies rose to an all-time high of $43.1bn in 2018, boosting projects that help developing countries cut emissions and address climate risks.
is represents an increase of more than 22% from the previous year, where climate nance totalled $35.2bn.
e latest MDB climate nance gures
are detailed in the 2018 Joint Report on Multilateral Development Banks’ Climate Finance, which combines data from the African Development Bank, the Asian Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Inter-American Development Bank Group (IDBG) and the World Bank Group (WBG). ese banks account for the vast majority of multilateral development nance globally.
e 2018 report also summarises information on climate nance from the Islamic Development Bank (IsDB), which joined the MDB climate nance tracking groups in October 2017.
e report shows that $30.2bn, or 70%, of the total nancing for 2018 was devoted to climate change mitigation investments that aim to reduce harmful greenhouse gas emissions and slow down global warming.
e remaining $12.9bn, or 30%, was invested in adaptation e orts to help address
mounting impacts of climate change, including worsening droughts and more extreme weather events from extreme ooding to rising sea levels.
AFRICAN DEVELOPMENT BANK
RENEWABLES
Europe’s FEI to invest
€40mn in African
renewables
e African Development Bank has announced a €40mn investment from the European Commission for the Facility for Energy Inclusion (FEI), a new platform for nancing small-scale renewables in Africa.
FEI is a $500mn nancing platform spearheaded by the African Development Bank to catalyse nancial support for innovative energy access solutions.
FEI On-grid is a targeted $400mn fund that supports improved energy access through the development of small-scale renewable energy generation and mini-grids across Africa.
e O -Grid Energy Access Fund (OGEF), a targeted $100mn fund that supports o grid energy distribution companies and boosts their long-term capacity to access capital markets at scale.
Joao Cunha, manager for renewable energy initiatives at the African Development Bank, said FEI had been developed to o er debt instruments, including in local currency,
to companies providing a ordable, clean and sustainable access to underserved communities in the Sub-Saharan region.
“ rough FEI, we aim to increase co- nancing and private sector investment in innovative on-grid and o -grid clean energy access solutions, and consequently move faster on our “Light Up and Power Africa priority to achieve universal energy access in Africa by 2025,” said Cunha.
In December 2018, the Directorate- General for International Cooperation and Development of the European Commission (DG DEVCO) approved a €25mn investment to FEI On-Grid window, €13mn into the FEI OGEF window and €1.6mn to support the Fund’s Technical Assistance Facility, which aims to build investee capacity in structuring and executing transactions in African capital markets. ese investments will provide junior equity to strengthen FEI’s capital structure, and enable FEI to fundraise from a range of commercial and private investors. AFRICAN DEVELOPMENT BANK
Week 25 26•June•2019
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