Project spotlight: Renewable energy

Geothermal power plant in Kenya. Photo by: Lydur Skulason

Poised for inclusion in the post-2015 global development agenda, renewable energy has been garnering more attention and increased funding from the donor community lately. As a recent Devex analysis revealed, most major aid donors have pledged to increase the share of their energy aid spending on renewable energy sources — including wind, solar, hydroelectric and geothermal power — albeit with only mixed results to show for so far.

We dug into the data even further and solicited comments from the Devex community to find some of the most interesting donor-funded renewable energy projects. These projects provide a snapshot of the priorities and approaches of major donors in the sector.

Zagtouli solar power plant, Burkina Faso (EuropeAid)

In sub-Saharan Africa, where seven out of 10 people lack access to electricity, solar power has emerged as the centerpiece of the European Union’s energy aid strategy. As European Commissioner for Development Andris Piebalgs highlighted in a recent exclusive interview with Devex, the European Union is investing 25 million euros ($34.1 million) in the construction of sub-Saharan Africa’s largest solar power plant in Burkina Faso. The EU anticipates that the solar power plant, which is being built on the outskirts of Ouagadougou, will generate 32 gigawatt hours per year, or 6 percent of the country’s electricity production. EuropeAid issued a contract forecast notice for the project in February.

Inga 3 hydropower scheme, DR Congo (World Bank)

In the Democratic Republic of the Congo, the World Bank earlier this year approved a $73 million loan to provide technical assistance to the Inga 3 base chute, the next step toward the construction of the largest hydropower scheme in the world — the $80 billion Grand Inga Dam. Located on the lower Congo river, the Grand Inga Dam is expected to double Africa’s energy output. Despite World Bank President Jim Kim’s strong backing for the hydropower scheme, environmental and social concerns have ignited a spirited debate in Washington over whether the Obama administration should also support Inga 3. In recent months, the World Bank has been soliciting technical assistance proposals for the project.

Hybrid power system, Philippines (USAID)

While dwarfed in size and scale by Inga 3, a pioneering U.S. Agency for International Development project in the Philippines has the potential to be a game changer in how aid donors design renewable energy projects. Inaugurated in February, the USAID-funded hybrid power system in the Philippine province of Palawan generates electricity from a biomass gasifier, solar panels and wind turbines. The first hybrid power system in Palawan, the project will initially provide electricity to 50 households. In line with the USAID localization agenda under USAID Forward, the project will eventually be owned and operated by the Palawan Center for Appropriate Rural Technology, a local nongovernmental organization.

For fiscal 2015, the Obama administration has requested $5 million in clean energy funding for the Philippines through its Global Climate Change Initiative.

Capacity strengthening for geothermal development, Kenya (JICA)

Among a handful of aid donors that invest heavily in geothermal energy, the Japan International Cooperation Agency last year announced a 1.8 billion Japanese yen ($17.6 million) project to strengthen the capacity for geothermal development in Kenya — one of the agency’s largest technical cooperation projects worldwide. Under its geothermal capacity strengthening project, JICA has tapped experts from Japanese engineering and resources firms — including Nippon Koei and the Japan International Cooperation System to train staff from the state-owned Geothermal Development Company of Kenya on drilling, reservoir evaluation and project management. Procurement opportunities for the project seem to be restricted to Japanese firms.

Already the world's ninth-largest geothermal power producer, Kenya has set an ambitious goal of generating 30 percent of its electricity from geothermal power by 2030.

Tokelau renewable energy project, Tokelau (NZAid)

Despite being a relatively small aid donor to renewable energy, the New Zealand aid program has been drawing positive media attention for the three-year Tokelau Renewable Energy Project, which was completed last year. A dependency of New Zealand with a population of approximately 1,400, Tokelau now relies on the three solar power systems constructed by TREP for 90 percent of its energy needs — a remarkable transition for the territory, which until recently had been entirely dependent on diesel generators for its electricity supply.

Arguably in recognition of the New Zealand aid program’s leadership on promoting renewable energy in Tokelau, the European Union has since bolstered its trilateral energy cooperation with New Zealand in the Pacific. Piebalgs and New Zealand foreign minister Murray McCully held a joint renewable energy mission to the region in April.

Energy-efficient housing, India (KfW)

In India, the single-largest recipient of German energy aid, promoting energy-efficient housing is a marquee project for the German development bank, Kreditanstalt für Wiederaufbau, or KfW. Since late 2010, KfW has provided a 50 million euro line of credit to India’s state-owned National Housing Bank to refinance loans to individual buyers of energy-efficient apartments. Drawing on its experience promoting energy-efficient housing in Germany, KfW has also given 1.5 million euros in technical assistance to NHB.

Between 2011 and 2016, KfW’s investments in energy-efficient housing in India are expected to cover 17,000 apartment units across five residential housing zones. In recent months, NHB and KfW have reportedly been in talks for a second line of credit.

Hydropower infrastructure, Bhutan (India)

Despite being a significant recipient of renewable energy aid, India channels hundreds of millions each year to support neighbor Bhutan’s hydropower infrastructure — including a string of hydropower plants across the water-abundant country. Fast-becoming a major aid donor in its own right, India budgeted $469.7 million for its hydropower programming in the South Asian country in 2013-14. Interestingly, India’s hydropower aid to Bhutan is openly tied to economic motives: New Delhi plans to buy back much of the electricity generated through its hydropower assistance to the country.

India’s newly elected government seems poised to press ahead with New Delhi’s hydropower investments in Bhutan. Last week, Indian Prime Minister Narendra Modi and his Bhutanese counterpart Tshering Tobgay signed off on plans to build four new joint venture hydropower projects in Bhutan.

Have any donor-funded renewable energy projects caught your attention lately? Leave a comment below.

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About the author

  • Piccio

    Lorenzo Piccio

    Lorenzo is a contributing analyst for Devex. Previously Devex's senior analyst for development finance in Manila, he is currently an MA candidate in international economics and international development at the Johns Hopkins School of Advanced International Studies in Washington. Lorenzo holds a bachelor's degree in government and social studies from Wesleyan University.