EU blending mechanism Practical examples in West and East Africa ---- ACP-EU JPA Economic Commission Brussels 17 March Jean-François Arnal, AFD Brussels Director
WEST AFRICA REGION Ghana / Burkina Faso WAPP (West African Power Pool) Regional power interconnection 2011-2017 2
WHERE? 3
A large programme around 230 M programme. 225 kv Interconnexion Bolgatanga - Ouagadougou (WAPP Masterplan) Burkina : AFD, EIB, WB + Sonabel 52 M - AFD 16 M + 2,4 M Ghana : AFD, WB 33 M$ - AFD 10 M$ 330 kv Line Kumasi - Bolgatanga (WAPP and Ghana Masterplan) Ghana : AFD 174 M$ including rural electrification from the HV Lines 4
General Overview The project consists of a regional power interconnection line linking Bolgatanga to Ouagadougou. As other West African Power Pool (WAPP) power transmission projects, it aims at: providing people with more available, reliable and affordable energy,aswellasmoresustainable, in a region where less than 20% of people have an access to energy; contributing to the creation over the medium and long term of a regional network and market for energy in West Africa, thereby allowing for power exchanges between the coastal countries (such as Ghana) that have access to cheaper energy resources (hydropower and thermal) than the landlocked sahelian countries (such as Burkina and Mali). 5
Financing structure 6
Blending leverage effect Decrease the financial cost for the beneficiairy -> Without the EU grant, AFD and EIB loans would not have been approved by the beneficiaries meaning that the project would not have been possible Provide Technical Assistance: Provide Sonabel and Gridco with trainings and support to improve their functionning Ensure the sustainability of the project -> Without the EU grant, TA could not have been financed as project beneficiairies are often reluctant to finance TA on loans Greater impacts on people: Pro-poor policy: more energy, more affordable and more reliable Rural areas are better connected Increase regional integration: Ghana/Burkina relations 7
A successful collaboration between partners Project conception: ECOWAS (West African Countries) / WAPP (utilities, mostly public) wish to set up a regional power network and market Burkina Faso: limited access to energy + costly energy Ghana: production of low cost hydroelectricity + political strategy to export energy AFD/EIB/WB: longterm experience in energy infrastructures good practices transfer AFD/EIB/West Africa collaboration: Organisation of several AFD/EIB joint missions in the field to meet the main actors Joint meetings to conceive the technical and financial structure of the project Joint meetings to monitor the project at the different stages of the project + drafting of reports Regular contact with the EU AITF Secretariat High visibility: press release, official signatures, logos 8
EAST AFRICA REGION KAMPALA WATER - LAKE VICTORIA WATER AND SANITATION PROJECT 2011-2022 9
General Overview The Project supports the National Water and Sewerage Corporation (NWSC) in the up-grading and rehabilitation of the existing water treatment, transmission and distribution systems, as well as the development of a new water system and water treatment plant east of Kampala. The EU-AITF is supporting this project with two grant operations (TA and IG). Partners: KfW, AFD, EIB, EU and Government of Uganda 25.09.2013 10
Project Components Production Distribution Customers C1 Upgrading and Rehabilitation of GGABA Water Complex 2011-2017 C4 New Water Treatment Plant 2012-2020 C2 Network Restructoring and Rehabilitation 2012-2022 Kampala Water Service Area C3 Extension of Water S supply in informal settlements 2012-2020 C5 - Accompanying measures for enhanced capacity building 2013-2019 25,09,2013 11
Financing Structure Investment: Rehabilitation and extension of water treatment & distribution capacities, improved services in informal settlements (EUR 212 m) Implementation: National Water & Sewerage Corporation (NWSC) Financing: KfW (Lead) EUR 20m grant EU-ITF (KfW) EUR 8m grant AFD EUR 75m concessional loan EU-ITF (AFD) EUR 14m grant EIB EUR 75m concessional loan NWSC/GoU EUR 34m equity EU-ITF support: 1. TA grant of EUR 8m as part of Euro 212m 2. Loan subsidy of EUR 14m for AFD loan finance 25,09,2013 12
Blending leverage effect Decrease the financial cost for the beneficiairy By subsidising AFD s loan -> Without the EU grant, AFD loans would not have been approved by the beneficiaries meaning that the project would not have been possible Provide Technical Assistance: Directly to the National Water and Sewerage Corporation (NWSC) Finance studies for planning, option development, project preparation and hydraulic analyses. -> Without the EU grant, TA could not have been financed as project beneficiaries are often reluctant to finance TA on loans Greater impacts on people: Pro-poor policy: improved access to water supply (for around 400 000 people) and enhanced sanitation in the informal settlements of Kampala Extension and rehabilitation of the water network 13
A successful collaboration between partners Project Conception: The project is based on a long-term rehabilitation and extension strategy for the water supply system of Kampala (2003, updated 2010) and is closely linked to the implementation of the Kampala Sanitation Master Plan (2004). AFD/KFW/EIB: long-term experience in water and sanitation in the region AFD/KfW/EIB/East African partners collaboration: Use of the MRI was helpful Organisation of several joint missions in the field to meet the main actors, joint meetings to conceive the structure of the project and to monitor it Regular contact with the EU AITF Secretariat High visibility: press release, official signatures, logos 14
SUNREF East Africa Regional Program 2010 15
Thanks for your attention! Brussels 17 March Jean-François Arnal, AFD Brussels Director