Rural electrification. Renewable energy  Power generation



Access to finance: Prepare a market study on available financial instruments in support of GMGs and design a concept for a financial intermediation initiative

Country : AFRICA. .
Client : AfDB (African Development Bank)
Start Date : 2016-02-02
Completion Date : N/A
Value of services : 123,169.35 USD
Funder : AfDB (African Development Bank) .
Associate/Partner : N/A
Description :
This Assignment aims to operationalize the Access to Finance business line of the MDP, which intends to:
i. Catalogue the financial and risk-mitigation instruments available and the gaps to be addressed.
ii. Identify and conceptualize a financial instrument (e.g. an equity/debt/venture fund, lines of credit, project pooling/aggregation vehicle etc.).
iii. Increase the understanding of the market opportunity presented by GMGs and their attractiveness for both equity investors and commercial lenders.
iv. Facilitate contacts between project developers and financiers.
Description of the Actual Services Provided For this assignement IED will provide AfDB with a market study, that will focus on the following elements:
• (i) a stocktake of financial instruments and initiatives of relevance for GMG projects;
• (ii) a clearer understanding of the financing needs for GMGs;
• (iii) information on real cases financed and best practices.

The market study will include:

• A demand-side analysis, including financial simulations for different mini-grid project types and sizes, their financing needs and potential returns, and a collection of relevant case studies (at least five);

• A supply-side scoping, including review and analysis (terms, limitations etc.) of existing public and private funding and technical assistance facilities applicable to GMGs operating in Sub-Saharan Africas;

On the basis of the market study the consultant will prepare the following delivrables:
1) an analysis of possible options to establish a financing facilitation instrument for GMGs including recommendations on the most suitable model. This should involve expert and stakeholder interviews.
2) an “information memorandum” setting out the investment scope of the financing facilitation instrument and identifying:
(i) the appropriate structure, mechanics, target size etc.;
(ii) the capacity of the market to absorb this capital and measures to improve absorption capacity;
(iii) the profile of the manager to be recruited (if applicable).