The East African Countries of Kenya, Uganda and Tanzania face a growing energy demand characterized by an intensive use of biomass fuel (wood, charcoal) for domestic use, especially in rural communities and among the urban poor. In addition, since electricity consumption is growing every year, these countries struggle to secure an adequate production capacity and are exposed to regular power shortages. Because these countries significantly rely on hydropower, the situation has worsened in the recent years due to severe droughts. This has resulted in the development of additional power generation capacities in the form of emergency oil-fueled power plants, thus increasing the countries’ dependency on fossil fuels. The region’s transition process towards renewable energy sources and energy efficiency improvements is essential, with significant opportunities for rural electrification and minigrids.  However, banks, having a limited track record financing such projects, are frequently confronted with immature or poorly conceived projects, where the perceived financial and implementation risks are often not adequately mitigated by project developers.

In order to support the Governments of Kenya, Tanzania and Uganda in successfully implementing their policies in the energy sector with the objective to increase the share of renewable energy resources and to promote rural electrification and minigrids, the “Agence Française de Développement” (AFD) launched a regional programme (SUNREF) with two main components:

• Credit facilities to provide banks with the necessary long-term financing deemed to overcome the financial barriers met by project sponsors.
• A Regional Technical Assistance Programme, the role of which is to facilitate the origination of viable and bankable projects, provide technical and financial support at critical stages of project development and to increase the knowledge and the expertise of the main stakeholders (sponsors, banks, consultants, equipment providers).

E3I was responsible for managing the launch of the second phase of SUNREF, focusing on building pipeline development  and providing transaction advisory support to local banks and project developers to help achieve AFD’s objectives.

The Municipal Energy Efficiency Program (MEEP) was implemented in Bulgaria by E3I staff to provide technical assistance for development of municipal energy efficiency projects to be funded by United Bulgarian Bank (UBB) under the U.S. Government Development Credit Authority (DCA) 50% loan guarantee program.  The program was funded by the United States Agency for International Development (USAID) - Sofia Mission. The Program aimed at establishing sustainable mechanisms for long-term commercial project financing of energy efficiency projects in Bulgaria. The main financial tool for the program implementation is the DCA 50% loan guarantee mechanism. The team worked with municipalities, industrial enterprise owners and managers, project developers, and UBB regional and central management. E3I staff carried out the initial creditworthiness analysis of the borrower, performed the engineering study, facilitated the financial deal structuring, conducted the cash flow and risk analyses, suggested risk mitigation strategies, developed the business plan, and assisted UBB and the borrower in closing the deal. E3I staff was successful in securing financing for over 30 projects using the DCA guarantee facility.

The Montgomery County Green Bank was authorized in 2015 by legislation of the County Council to accelerate the investment in green technologies, including energy efficiency and renewable energy solutions, to advance the inclusive growth of the clean energy economy in the state of Maryland, and to help meet Maryland’s ambitious greenhouse gas emissions reduction goals. It is the first county-level green bank in the United States. MCGB is funded with limited public-purpose capital to be leveraged with private and donor capital investment to achieve significantly greater impact than government grants alone could provide.  Green banks or finance authorities, which can be government, quasi-government, or nonprofit entities, use financial tools like loan loss reserves and guarantees to reduce perceived risk and catalyze private capital participation in clean energy market sectors. E3I leadership has been involved in the pre-launch market assessment, funding, and governance activities of the MCGB (and also, including  product development, for the Washington, DC Green Finance Authority launched in 2018) and is represented on MCGB’s board leadership now guiding the operations, investments, partnerships, and governance of this new institution which has already been proven successful at the state level in Connecticut and New York and internationally in Great Britain, Japan, Malaysia, Australia and elsewhere.  This public/private blended finance approach for clean energy investment can also be adapted for implementation in conjunction with development banks to achieve sustainable development goals, and E3I leadership is currently advising on these internationally in several countries.