The European Bank for Reconstruction and Development (EBRD) and its partners are launching a $250m funding package for private sector clean power generation in the Southern and Eastern Mediterranean (SEMED) regions.
The financing is expected to stimulate private sector renewable energy generation in Morocco, Egypt, Tunisia and Jordan.
Unreliable energy supply is one of the chief barriers to economic development in the region, which makes the four countries dependent on hydrocarbon imports.
The debt and equity financing framework has been supported by Climate Investment Funds’ Clean Technology Fund (CTF) and the Global Environment Facility (GEF).
While the former will be investing up to $35m for the $250m package, the latter will contribute up to $15m, with the rest being offered by EBRD.
The financing initiative follows recent reforms in the four countries, which allow private power producers to directly sell electricity to consumers.
The EBRD support will be offered through multiple new business models, involving direct agreements between large developers and corporate consumers to small-scale generation in communities.
EBRD power and energy director Nandita Parshad said: "For the first time in this region, the private sector is now able to produce and sell clean renewable energy on a commercial basis competing head to head with gas and oil-fired generation.
"We are grateful to our partners in this programme, the CTF and GEF funds and the Union for the Mediterranean for their support in catalysing this development."
The 120MW Khalladi wind farm in Morocco will be one of the first projects to be considered under the funding support. Signing for up to €57m, EBRD’s loan for the project is expected to happen soon.
CTF programme manager Mafalda Duarte said: "We hope that this programme and the types of projects it finances will serve as a blueprint for other regions seeking to promote private renewable energy investments."
GEF programmes director Gustavo Fonseca said: "Once these projects are built, they could result in direct CO2 reductions of at least 700,000t per year and much more from the market changes we expect the programme to promote."
Image: The funding is also supported by Climate Investment Funds’ Clean Technology Fund (CTF) and the Global Environment Facility EBRD programme. Photo: courtesy of European Bank for Reconstruction and Development.