A solar program from the World Bank Group (WBG) will lead to over 1.2 gigawatts of competitively priced utility-scale solar PV in Zambia, Senegal, Ethiopia and Madagascar in the coming years, according to new research.
Despite criticism from local developers, the program is a breakthrough risk mitigation and advisory mechanism that offers global solar developers a chance to secure a foothold in new markets with high growth potential and low rates of energy access.
The Scaling Solar Initiative is designed to address utility-scale solar project development challenges in emerging markets through a transparent auction overseen by the International Finance Corporation, with prescreened project sites and standardized contracts. Its aim is to support the procurement of utility-scale solar PV projects through a one-stop shop for turnkey advisory and due diligence, as well as standardized contracts that can be used by “any government and any bidder and any bank.”
The program also leverages risk reduction products from WBG to allow countries with high perceived risks and limited institutional capacity to benefit from solar PV project financing (typically LIBOR + single-digit market rates for 17- to 19-year terms).
Scaling Solar made headlines in June 2016 when a First Solar-Neoen consortium was awarded a bid of USD $0.0602 cents per kilowatt-hour (non-indexed) for the 54 megawatt-DC West Lunga project site, less than one year after signing the initial memorandum of understanding with the Zambian government….