Developing the Concentrated Solar Power in MENA Region

Ms. Hela Cheikhrouhou Division Manager Infrastructure Finance, Private Sector Operations, AfDB MENASOL Conference- Cairo, May 2010
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Who We are
AfDB is the Pan-African Multilateral Development Bank Infrastructure Finance, Private Sector Development, and Regional Integration are institutional top priorities

AfDB leverages its AAA balance sheet to support the economic development in its regional member countries
AfDB has consistently been a major financier to the Energy Sector in North Africa Originator for Clean Technology Fund Co-financings in Africa, along with WBG
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AfDB has 2 lending windows: Public and Private

AfDBs lending operations Public window Private window

Recipient

Governments or state owned enterprises

- Privately owned enterprises - Financially strong government owned enterprises

Guarantee

Sovereign

Non sovereign

Financial terms

Concessionary terms

Commercial terms

The AfDB selects its private instruments to meet investee companys needs Senior Debt tenor and currency adapted to project needs; debt arranging capacity:
African Financing Partnership DFI co-financing platform A-B Syndication Program leveraging the AfDB Preferred Creditor Status

Guarantees partial risk, partial credit Subordinated Debt

Equity direct, or indirect (equity funds)

Technical Assistance, incl. for carbon credits
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Key Private Investment Selection Criteria

Consistency with AfDB Strategy in the Regional Member Country Commercial Viability
Expected Development Outcomes AfDB Additionality
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The AfDB is actively building a pipeline of Clean Energy Investments across the Continent

Hydro Power Wind energy Co-generation Geothermal ... Solar Power (Mainly CSP)

Sample Past Clean Investments :

Project name Bujagali Hydropower IPP Country Uganda Capacity (MW) 250

Beni Matar Solar/Gas Morocco Thermal Power Station

250 MW 30 MW Solar

Kuraimat Solar/Gas Egypt Thermal Power Station

150 MW

AfDB is working with North African Governments, IFIs and interested private investors to support Solar Energy Scale-up. Why?
parabolic trough (PSA)

solar tower (SNL)

linear Fresnel (Solarmundo)

parabolic dish (SBP)

Areas physically favorable for CSP development (DLR,2005)

Levelized Costs of CSP technologies as compared to gas fired power plants (Unit: US$/MWh)

196

102 80

116

CSP

Wind

Gas CCGT

Simple Cycle GT
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Cost of CSP Power Generation by Location

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Advantage of Solar Scale-up program in MENA (1)

MENA region has amongst the best physical conditions for solar power in the world
CSP is of particular interest to utilities due to scalability and dispatch-ability Exploiting the potential scale economics in MENA will help accelerate global adoption of CSP through unit cost reductions
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Advantage of Solar Scale-up program in MENA (2) Growing strategic importance of renewable energy in the Mediterranean and Gulf region including for regional integration

Good potential for enhancing local content through technology transfer

Possibility of green stimulus packages that create employment through investment in transmission, generation, and equipment manufacturing
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Renewable energy targets in North African countries 2017: 5 % power generation based on renewable energy 2025: 10 % power generation based on renewable energy 250 MW CSP planned based on feed-in tariffs (300 % bonus-system) 450 MW cogeneration 2010: 3 % electricity demand from renewable energy 2020: 20 % of the electricity from renewable energy, of which 12 % from wind Planned feed-in tariff for smaller plants (wind, solar)

Algeria

Egypt

2020 : 42 % contribution of renewable energy to electricity generation Renewable law approved by Council of Ministers- now due for Morocco Parliamentary approval Target for CSP: 2000 MW by 2020 Tunisia
2012: 4 % contribution of renewable energy Investment incentives for renewable Feed-in tariffs and self-generation policy for renewables expected
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CSP Projects in Clean Technology Fund Investment Plan

Country No. of Projects 3 Location Capacity (MW) Est. cost (US$ million) 322 285 285 370 270 240 525 440 450 450 1140 4,800 CTF Contribution (US$ million) 58 51 51 51 44 35 90 72 73 73 40 640

Algeria

Megahir Naama Hassi Rmel II Kom Ombo Marsa Alam[1] Tan Tan[2] Ain Beni Mathar Ouarzazate IPP-CSP Project ELMED-CSP Tunisia-Italy transmission

80 70 70 70 30 50 125 100 100 100+

Egypt Morocco

2 3

Tunisia

Total

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~800 MW

[1] This is a project with 8 hr storage so the size of the solar field will be equivalent to a 60 MW project.

[2] This is a CSP-desalination project

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Objectives & Rationale:

Increase the production capacity using clean energy resources in order to secure the energy mix and reduce GHG emission Development and promotion of clean technology Possibility for Export of electricity to Europe There is possibilities to combined the technology with other renewable resources (Hybrid system) Possibility to benefit from the carbon credit
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Possible Transmission lines within North Africa and to Europe

in use in project phase

Italy Spain

HVDC (feasibility study)

400-kV
New 400 kV transmission line
3x220 kV 2x 220 kV 1x 150 kV 2x 90 kV

Morocco

Algeria

2x220 kV

Libya

2x220 kV

Egypt
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Tunisia

Parameter overview for transmission lines

Transmission Line MoroccoSpain Algeria-Spain Length Capacity Technology

km 60 240 800 400 580

MW 2x700 2x1000 1000 500 1000

Voltage

Losses[ Status
1]

Costs

kV 400 400 500 400 400

%
Existing Feasibility studies Feasibility studies Feasibility studies Feasibility studies 3.0 2.4 5.0 3.1 4.0

Mio. US$ 150 650 975 780 650

HVAC HVDC HVDC HVDC HVDC

Algeria-Italy

Tunisia-Italy

Libya-Italy

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[1] Losses of HVDC: based on NorNed

Summary:

In order to enable the implementation of the CSP Projects there will be need for:
Concessional Financing Clear policy (national & international) Costs reduction by increasing production of unit number Local production Capacity building
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THANK YOU
h.cheikhrouhou@afdb.org

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