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The ACP-EU Energy Facility

Updated: July 2012

The Energy Facility is a funding mechanism that is part of EuroAid.
The Energy Facility for African, Pacific and Caribbean countries promote initiatives and projects in the area of energy in ACP countries. It's based on the idea that access to modern energy services is a prerequisite for social and economic development.
Grants are made for projects in combination with other other financial sources, such as private investments.

It is so far the main outcome of the EU Energy Initiative
It was first proposed by the EU commission (Communication of 26 October 2004 on the future development of the EU Energy Initiative ...(COM(2004)711final), and was adopted by the EU development ministers together with representatives of ACP countries June 25, 2005.

The first energy facility was provided for the period 2006-2009 with 220 million Euro and a call was opened in June 2006 with the deadline of October 6, 2006. Based on this call 198 mill. Euro were given to 75 projects. Read more here

Additional activities were a 5 Mill. Euro EUEI Partnership and Dialogue Facility (PDF), supporting EUEI upstream dialogue’ (e.g. policy, capacity building and partnership development) with Developing Countries. The PDF is funded by 6 EU Member States (Austria, France, Germany, the Netherlands, Sweden, UK) and managed by GTZ in Germany. Read more here

In 2009, a second energy facility was agreed for the period 2009-2013 financed with 200 million Euro and a call was made with a deadline 1/2 2010 and a budget of 100 milion Euro. The total amount of 98.5 mill. Euro was given to 65 projects.

For the implementation of this second energy facility it was created a Pooling Mechanism with the aim of promote investment in energy from the private sector in rural and peri-urban areas in ACP states. The guidelines of this Pooling Mechanism were published on February 2011, read it under (pdf). See also ACP-EU nergy Facility publication (pdf`)

The second call of the second energy facility is expected soon, also with a budget of 100 million Euro. It is one of the instruments implementing the Africa-Europe Energy Partnership (AEEP), which is part of the 2011 – 2013 Joint Africa-EU Strategy. Read more on the website of the AEEP.

Four principles for the Facility:
Governance: The Facility shall help countries to establish their institutional and regulatory framework and to attract additional financial resources for public-private partnerships.
Ownership: The Energy Facility is an instrument to support and deepen the involvement of actors in ACP countries in the building and implementation of energy policies.
Flexibility: The Facility will be open to joint financing with Member States, other international financing institutions such as the European Investment Bank and private sector investments
Innovation: The Facility is intended to offer innovative responses to the challenge of providing sustainable energy services to the poorest areas. Projects could include electrifying rural areas, improving the efficiency of households' cooking and promoting sustainable energy generation through biomass, small hydroelectric plants and wind turbines.

Three Priority Activity Areas:
Delivery of energy services: The largest financial contribution from the Facility shall improve rural people's access to modern energy services. Priority shall be given to people in unserved areas.
Creating an enabling environment: The Facility facilitates the implementation of sound national energy policies and strategies, improves the institutional, legal and regulatory framework, strengthen the capacity of key stakeholders, and improves monitoring and evaluation capacity.
Supporting future large-scale investment programs: Up to 20% of the Facility resources are devoted to preparatory activities required to facilitate future large-scale investment plans for cross-border interconnections, grid extensions and rural distribution, preparing them for financing by international finance institutions. (not necessarily included in future calls)

Website of the ACP Energy Facility

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