Abu Dhabi Fund reduces conditions for finance

Abu Dhabi Fund for Development (ADFD) and the International Renewable Energy Agency (Irena) have announced the opening of the third funding cycle to support renewal energy projects by extending concessional finance of up to $350 million (Dh1.28 billion) over 7 cycles.

In support of this initiative, ADFD has reduced their lending conditions to encourage developing countries to take advantage of the project facility. Successful projects will enjoy funding rates ranging between 1-2 per cent only. ADFD said in a statement that it believes that this action would attract a wider range of renewable energy projects – many of which can be hugely capital intensive.

It noted that applicants can submit request for funding of renewable energy technology project in accordance with the set guidelines. Countries that intend to apply for funding through the renewable energy development facility will have until February 18, 2015, to do so.

“We believe that the provision of renewable energy is an important and effective form of development aid,” said Mohammed Saif Al Suwaidi, Director-General of Abu Dhabi Fund for Development. “For that reason, it is important that the recipients of the aid are able to fully realise the economic and social benefits of the clean energy projects delivered.

“Based on lessons learned from the first and second cycles we believe these new terms will significantly increase the facility’s impact, and encourage developing countries to utilise this opportunity.”

Projects approved for funding to date include solar, hydropower, biomass, wind energy and hybrid projects in Ecuador, Mali, Maldives, Mauritania, Samoa and Sierra Leone. The projects selected represent a diverse mix of renewable energy sources and innovative technologies that are replicable, scalable and will improve energy access in developing countries.

“The demand for concessional finance for renewable energy projects is high as demonstrated by the more than $1.5 billion worth of loans requested in the first two cycles of the Irena/ADFD Project Facility,” said Adnan Z. Amin, Director-General of Irena.

“The lower interest rates now offered by ADFD make this an even more effective platform to support innovative projects, a diverse range of technologies and a wider geographic spread of countries.”

The recipient countries from round two of the facility will be announced during the Irena General Assembly, which takes place during Abu Dhabi Sustainability Week, from January 17-24, 2015.