Private-Public Partnership Mezzanine Fund

Background

Due to the risk involved, debt financing for renewable energy (RE) and energy efficiency (EE) projects in Egypt, Morocco, and Tunisia typically requires substantial proportions of equity and grants in the financing structure. This may strain the developers' capital resources.  Innovative structures are needed to close the gap between equity and debt, available to RE and EE projects and increase the leverage of scarce public funds.

Purpose

To develop a financing instrument to improve financing possibilities for RE and EE projects in the southern Mediterranean region.

Main Activities

  • Analyse the RE and EE market structure and opportunities and evaluate the financing needs  in each country of the target area
  • Identify the optimal legal and economic framework for financing RE and EE projects in each country
  • Devise a structure for Public-Private Partnership between governmental agencies and private investors to: 

                   o improve risk allocation to better suit the objectives of the project partners                      o propose an efficient use of public funds to leverage private investor financing

Expected Impact

  • Closing the gap between developer equity and available debt for RE and EE projects
  • Provision of additional financing to projects on better financial terms, thanks to more efficient and differentiated risk allocation
  • Opportunity for local developers to implement a larger number of projects while still maintaining ownership.
  • Use of public funds to attract private investors will leverage public funding and multiply its effect in terms of the number of projects supported
  • Involvement of local players will allow the financing of medium and small scale projects, usually not considered by large investors.
     

Related News

Project Information

Programme sector: 

RE & EE (Business&Finance)

Stage of project: 

Completed

Location: 

EG/Egypt, MA/Morocco, TN/Tunisia

Duration: 

2009 - 2010

Budget: 

€ 140,000 including co-funding from Intesa Sanpaolo Group

Implementing agency: 

Equiter S.p.A. - Intesa Sanpaolo

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