The capacity of renewable energy in the Middle East and North Africa (MENA) will nearly double from the current 1.7 GW to 3.3 GW by 2015, according to the Desertec Industrial Initiative (Dii).
The organization, which is looking to expand renewable energy in the region and comprises partner companies from 15 countries, made the forecast last week at the 4th Dii Desert Energy Conference in Rabat, Morocco, which took place Oct. 30-31.
Project developers are an important driver in reaching this ambitious goal, Dii said. However, it pointed out that the amount of capital available for the high risk phase of early stage development is often limited in MENA’s emerging markets.
"North Africa and the Middle East are at the beginning of an impressive energy transition based on wind and sun," said Dii CEO Paul van Son at the opening of the fourth Dii Desert Energy Conference. Van Son added that supporting the right projects in their early stages was a priority and unveiled plans for a new investment vehicle to support such endeavors.
Redimena investment vehicle
The Renewable Energy Development and Investment Vehicle for MENA (REDIMENA) is a fund dedicated to overcoming such hurdles by co-investing between 1 million and 4 million of risk capital per project to help them reach the construction phase.
"A well-developed, shovel-ready project then builds the basis for the much larger amounts of private sector investment necessary for constructing a renewable energy power plant," Dii said. The initiative added that the support of these local entrepreneurs as first movers would pave the way for further projects through demonstrating best-practice of project concepts and contractual arrangements.
"This is why Dii has launched REDIMENA for promising projects," van Son added.
As a next step, Dii and the Hamburg-based consulting company Suntrace will perform a feasibility study to lay the groundwork for this investment vehicle. The aim is to identify investors to set-up REDIMENA with an initial volume of 30 million ($40.5 million).
The 4th Dii Desert Energy Conference took place at the Corum Rabat Convention and Exhibition Center in Skhirat, Morocco. Energy ministers from the region, EU dignitaries, heads of industry and international representatives from the fields of science, politics and business attended the conference to discuss network expansion and the generation of electricity from renewable energy sources and their integration.