The seven project concepts endorsed for full project development in Africa focus on forests in Burkina Faso, DRC and Ghana, renewable energy in Kenya and Mali, and climate resilience in Mozambique.
The multilateral development banks ran the four-month competition to provide funding to garner more effective private sector involvement in projects in renewable energy, sustainable forests, and climate resilience. The selected African project concepts - a third of the 15 final winning concepts globally - will now go forward for further development by the African Development Bank (AfDB) as their CIF implementing partner.
"At AfDB, we went an extra mile through this process, and despite the time and resource limitations we carried out business identification efforts on the ground. We now look forward to working with the seven private sector sponsors in the countries to develop the concepts for full funding by next year," said Mafalda Duarte, AfDB's CIF coordinator who spearheaded the African project concept submissions in the competition. "We believe that private sector engagement in climate action is critically important to stimulate markets, increase investment potential, develop climate-friendly business models, and ensure a sustainable shift for effective climate solutions."
The CIF undertook the competition in order to help alleviate the large number of risks preventing private sector's entrance into renewable energy, energy efficiency, forestry, and climate resilience investments, particularly in developing countries. There are upfront risks for early entrants, large capital costs, a lack of suitable financing and insurance products, and a return on investment that is often slower than other better-known investments, such as fossil fuels. Mitigating these factors, along with addressing the lack of understanding of the value of climate investment and the need for new types of investment products, were the underlying reasons the CIF decided to set aside the special funds.
"Going forward, more efforts like the CIF set-asides are needed to raise awareness about business opportunities for potential private sector sponsors in developing countries, particularly for climate adaptation," added Duarte. "We applaud these initiatives, and efforts like the set-asides must be developed across a broader horison than the CIF pilot countries, reaching out to a wide swath of the developing world to stimulate large-scale change."
Selected project concepts under the competition will now be fully prepared and will be presented for final funding to the CIF governing bodies in 2014.
