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GEEREF channels €22 million into African and Asian energy projects

26/03/2009

  • United Kingdom
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The Global Energy Efficiency and Renewable Energy Fund (GEEREF) has announced an initial €22 million investment in funds for renewable and sustainable energy projects in Africa and Asia.

This first set of investments will be channelled into two commercial renewable energy funds, one supporting projects in sub-Saharan and southern Africa, and the other investing in projects throughout Asia, but with a particular focus on India. The nature and investment outlooks of the two funds are similar.

Renewable energy projects, such as wind energy, small hydroelectric generation, biomass and methane recovery will receive significant investments from these funds. The regions singled out are those where there is a real lack of equity investment available for energy efficiency and renewable energy projects.

Fighting climate change and poverty

The Global Energy Efficiency and Renewable Energy Fund is a novel public-private partnership complementing available Community financing instruments. “GEEREF is creating a finance platform to support the global fight against both climate change and poverty,” said Stavros Dimas, European Environment Commissioner, at the United Nations Climate Change Conference in Poznan, Poland in December 2008. “Tackling both these issues together is at the heart of the EU’s shared vision for a global and comprehensive international agreement on climate change.”

“1.6 billion people worldwide still have no regular access to reliable energy services,” pointed out Louis Michel, European Commissioner for Development and Humanitarian Aid. “GEEREF investments will accelerate the transfer, development and deployment of environmentally sound technologies, and thereby help to bring secure and clean energy supplies to people in poorer regions of the world.”

Proven technical solutions

Launched in 2006, GEEREF invests in renewable energy and sustainable energy infrastructure funds in regions of the world where there is a lack of such initiatives. The emphasis is on deploying technologies with a proven technical track record in regions that are not only ignored by commercial investors but where public investment into the energy sector is also weak. The European Commission currently estimates that the risk capital needs in the renewable energy sector in developing countries is 9,7 billion USD until 2010.

Small hydro and biomass will comprise a large part of investment prospects, with on-shore wind also offering significant potential. Solar energy provides stable solutions for remote areas. Co-firing solutions such as burning coal together with biomass, energy service companies and other small- and medium-scale clean-energy solutions will also qualify.

The objective of GEEREF is to mobilise public and private finance that can help solve the financing grid-lock for economic renewable energy and energy efficiency projects and businesses, especially focusing on the risk capital gap. Together with the European Commission, Germany and Norway have committed some €110 million to GEEREF from 2007 to 2011. The European Commission hopes that these investments will attract risk capital of between €300 million and €1 billion for investment in projects on the ground. GEEREF will prioritise small investments, below €10 million, that are largely ignored by commercial investors and international financial institutions.

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