Solar and wind developers could soon tap a €30 million (Dh151.3m) fund aimed at bringing more clean energy to the region.
Dii, the industrial alliance that promotes renewables in the Middle East, is helping the German development bank KfW to set up an investment vehicle to provide financiers the chance to back wind or solar projects of 10 to 20 megawatts each, said Paul van Son, the chief executive of Dii, whose shareholders include Abu Dhabi co-investors such as Eon and Abengoa.
The money, which Dii envisions parcelling off in tranches of about €1m, would enable early stage studies on solar or wind conditions, grid availability and other factors that renewables developers must submit to banks to apply for more funding.
“The developers don’t have money or funding to invest in such a study,” Mr van Son said. “There is a lot of money waiting for good projects. The problem is the definition of good projects.”
In theory, the fund could spur the installation of as much as 600MW of clean energy in the region and augment the efforts of governments pushing forward massive 100MW-scale projects with smaller, more manageable ones. It would be administered by the KfW subsidiary Entrepreneurial Development Cooperation.
The fund would be a coup for Dii, which last year lost the backing of the Desertec Initiative, the non-governmental organisation that promoted a plan to produce solar energy in North Africa for export to European consumers and was the reason behind Dii’s creation in 2009. Desertec split from Dii last year after a disagreement over mission.
Dii’s membership is diversifying as its mission expands beyond its former partner’s original plan. A December joiner is State Grid, the Chinese electric giant, which envisions building high-capacity transmission lines to connect, for example, a Moroccan solar array to a Chinese city. The idea would be to take advantage of time differences to use up off-peak energy.
“The Chinese companies think very long term,” Mr van Son said. “The Chinese say to me this is the project of the century.”
Less ambitious electricity lines are taking shape. A European Commission-funded study is expected to be completed this year on the feasibility of building a power line from Tunisia to Italy, which would also help Algeria and Libya to reach developed electricity markets. Morocco and Spain are already connected.
Next year is expected to be a watershed for renewable energy in the Middle East, with solar and wind capacity reaching 3.9 gigawatts, more than double last year’s 1.6GW, according to Dii estimates. Altogether governments are targeting 50GW of renewables by 2020, half of it planned by Saudi Arabia.
ayee@thenational.ae
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