AFRICA ENERGY GUARANTEE FACILITY

Promoter – Financial Intermediary

Munich Re

Location

• Regional - Africa

Description

The Africa Energy Guarantee Facility (AEGF) consists of a guarantee to support reinsurers in the provision of investment and trade insurance services for the African energy sector through local partners. The operation is initiated by the EIB and forms part of the Bank's response under the UN Sustainable Energy for All (SE4All) initiative. It is proposed to establish AEGF to provide political and comprehensive credit risk insurance and reinsurance to SE4All projects in Africa.

Objectives

The proposed operation consists of a guarantee for a dedicated reinsurance vehicle targeting eligible SE4All projects in sub-Saharan Africa. Eligible investment projects to be covered by the guarantee will include renewable energy, energy efficiency, small-scale hybrid energy systems, electricity transmission and distribution. AEGF's capital would include contributions from an already identified group of public and private insurance and reinsurance companies with existing operations in Africa. The objective is to enhance the availability of long-term capital for the African energy sector through provision of investment insurance services.

Sector(s)

• Energy - Electricity, gas, steam and air conditioning supply

Proposed EIB finance (Approximate amount)

USD 50 million (EUR 47 million)

Total cost (Approximate amount)

USD 1389 million (EUR 1304 million)

Environmental aspects

The underlying investments to be guaranteed by the AEGF are expected to include renewable energy, energy efficiency, small-scale hybrid energy systems, electricity transmission and distribution projects. All projects will require environmental and social (E&S) screening and will need to comply with the Bank's environmental and social standards. Some projects may be required to undertake an environmental impact assessment (EIA) in line with national legislation or in order to meet the Bank's requirements. In such cases, the EIA studies will be published on the Bank's website. The agents managing the operation will adopt an environmental, social and governance (ESG) policy and a social and environmental management system (SEMS) in line with the Bank's standards, incl. a grievance mechanism.

Procurement

The Bank will require the AEGF manager to ensure that implementation of the underlying projects is done in accordance with the Bank's Guide to Procurement. Most of the project promoters are expected to be private companies for which the AEGF manager will have to verify during appraisal whether the projects have obtained any special or exclusive rights, and verify that the provisions of the guide are respected.

Status

Signed - 21/12/2017