E Co. Sound bites: Conversations with AEs Episode 4 Transcript – African Development Bank
This is the transcript for Episode 4 of Conversations with Accredited Entities: Leveraging Energy Access Finance Framework project with the African Development Bank. You can listen to the full episode here.
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About this episode
Project: Leveraging Energy Access Finance Framework project with AfDB
Organisations: African Development Bank
Podcast Speakers: Dr Grant Ballard-Tremeer – E Co., Fatma Ben Abda – AfDB, Timothy Afful-Koomson – AfDB, Jamal Gore – E Co.
Grant: Alright, so I’m joined now by Fatma Ben Abda and Timothy Afful-Koomson from the African Development Bank. And they’ve just been successful in the approval of their project, the LEAF project, or the “Leveraging Energy Access Finance Framework project”, that was approved at the 29th board meeting of the GCF. So a warm welcome to both of you. Thank you for joining me here. Your project was approved at the GCF board meeting 29. Could you tell us a little about it?
Fatma: Thank you very much grant for giving us an opportunity to present the leaf program, which has been approved by the B 29. GCF board. So just to give you an idea on this program, first we will I would like to present why actually did we design this program. So in Africa, there is a necessity to scale up renewable energy to meet growing electricity demand in Africa. Our distribution networks across Africa are unable to reliably serve the existing industrial, urban and rural customer base. We know that rural communities often rely on fossil fuel based solutions such as kerosene, and diesel as well as disposable batteries, lead acid batteries as energy source, all of which cause damage to humans to climate and pollute the environment. As a result, we have an estimate of 570 million people in Africa without access to clean electricity mainly in Sub Saharan Africa. We think that the centralized renewable energy solution, including small to medium scale, grids like mini grids, captive power for businesses and industrial facilities as well as solar home systems, solutions hold immense potential for effectively electrifying and industrializing countries across Africa. These decentralized solutions are faster and cheaper to deploy and grid decline extensions, they are not there to replace the grid extension we acknowledge the importance of grid electrification. But they can close the gap in a faster way to achieve universal access to electricity in the continent. The continent is also endowed with abundant resources of renewable energy. And lastly, I mean, the opportunity is there, the sun is everywhere for the centralized renewables.
So to respond to these other needs for clean electricity the FTB has developed in collaboration with the GCF the LEAF program, leveraging energy access framework program, with the main objectives of the program to unlock commercial investment in the sector. And to scale up investment of decentralized renewable energies. The first phase of the program will focus on six countries Nigeria, Kenya, Ethiopia, Ghana, Guinea, and Tunisia. And the framework the if the GCF will contribute with 170 million US dollars. Investments, including Technical Assistance Grants, and the contribution will aim to enhance local investment and commercial investment in the space by providing the risking financing instruments through such as guarantees and subordinated debt to unlock Commercial Investments.
So by promoting and accelerating the deployment of renewable energy in Africa, we are here talking about a major objective of the bank and its energy agenda and we think African countries have a unique opportunity to leapfrog the fossil fuel based growth strategies of developed countries by investing more in green energy. And we acknowledge also that this requires a significant amount of private sector investment. I don’t know if I answered all the questions.
Grant: Yes. Thank you very much. How is the project structured? I understand there are three components to it. You have one component is investment oriented or component one and two are both investment oriented. Could you say a few words about that?
Fatma: Yes, thank you, Grant. Indeed, the project includes three components, we have the first component we want to do risk, we provide the risking instrument which will unlock commercial capital and may reduce the overall project capital costs for renewable energy developers. So the GCF support will primarily take the form of an outflow of concessional credit enhancement. enhancement instruments we including subordinated debt, and also partial credit guarantees concessional in the form of concessional financing instruments, the second component is to address the need to concessional capital as a result of the COVID pandemic.
So we have the COVID recovery support, where we provide concessional debt instruments, the GCF and the FTB through its Sustainable Energy Fund for all safer fun to support great companies to support developers renewable energy companies impacted by the pandemic, to ensure their business continuity and the delivery of essential energy services and also to safeguarding the sector and to support the clinic recovery of the sector. The third component is to create the enabling environment for private sector investment, and decentralized renewable energy.
So we have three I would say axe pillars of this component, we support local banks, local financial institutions, and for enhancing their ability to, to uprise and to lend to decentralized renewable energy businesses and projects, including trainings, appraisal toolkit, standard guides, loan document templates, and we also support the development and structuring of innovative and financially sound. Financing structures, so really enabling environment for financial intermediaries to invest more on the sector. The second pillar is, to support the enabling policies for private sector investment in the sector. So to support government to create the right enabling environment, and policies to unlock investment from private sector, in these infrastructure projects. And also, we provide FTB with provide technical assistance to companies to develop financially robust structures to invest more and decentralized renewable energies. Yeah, so these are the three pillars of the program.
So we provide the risking instruments to unlock private and local currency investment. We support the COVID recovery in the sector. And we provide also technical assistance, which is for the private sector, but also for the governments to create the right enabling environment for private investment.
Grant: Okay, thank you. It’s a very interesting structure, including this COVID element in it. And I know that GCF was trying to really shift some investment into the area of supporting recovery and green recovery related to COVID. It’s interesting to see that element as a component of your project. And you’re working in six countries, it’s a big initiative 170 million from the GCF must have been quite complicated to put together this project and how did you go about it? In all of these countries, especially taking into consideration locked down in many countries, that must have been quite a challenge, how did that all work?
Fatma: Yeah, thank you for the question. We have actually started designing this program. Before the covid 19 pandemics. We started already in 2019, we conducted a feasibility study and 2018. So, we have been always aware through the various seminars which we had in the African Development Bank about the need for commercial and local currency investment in the sector, and also the need for de-risking the sector for local financial intermediaries to mobilize more private capital. So FTB has conducted this market assessment to explore the supply and demand for commercial and local currency finance and the off-grid, renewable energy space.
The feasibility study has focused on these six countries as I mentioned, Nigeria, Kenya, Ethiopia, Ghana, Guinea, and Tunisia. And thanks to the feasibility study, the market has confirmed that there are tremendous obstacles that developers and businesses are facing and tapping into local currency credit and the extent to which credit enhancement could actually support local banks and financial intermediaries to finance the off-grid sector. The study has involved many stakeholders in the renewable energy space. So we discussed with developers we discussed with the financial intermediaries with funds in the space.
We also discussed with businesses who are keen to transition to renewable energy. And we have seen that there is, although there is a huge demand for this kind of solution, there are major barriers of access to finance of capital, which is affordable and there is a very high-risk perception of investors of the risk related to this kind of investment. That for example, the target population are perceived as a higher risky target market segment, we are talking about rural communities, we are talking about electrifying households in rural areas of population with a low income and fluctuating income from the agricultural sector. So, there is a high-risk perception of the sector combined with lack of investment in the sector and combined. Also, there are regulatory barriers, which need to be addressed to support investment in the sector. The design of this program is also based on consultation with key stakeholders and FTP extensive experience in the sector.
We have also discussed with government including the NDA’s and the country’s ratification agency and ministries of energy and other stakeholders, we, in the context of our specific projects, have also visited beneficiaries and we have seen the need for access to clean electricity for these households, and also for businesses. So, leaf is actually a program of a wider strategic initiative of the Bank of its wider upgrades strategy, and it’s a piece of a puzzle to complement existing FTP effort and sector.
We have other also initiatives like the safe upon which I mentioned earlier we have the green mini-grid program, which is working with a with an emphasis on the enabling environment for deploying at scale screen integrates So, really, strategically we are looking at addressing these barriers and to deployment at scale of off-grid solutions to close the energy access gap in Africa.
Grant: Okay, thank you very much. The demand I understand very well, in terms of rural communities, mainly with energy demand, and need for electrification of grid electrification and such, like, and I can understand the mitigation impact of these types of investments because of what you’re displacing, you mentioned, rather than getting kerosene and other fuels that are being potentially displaced, and through this, but how about the interest of banks and financial intermediaries in these countries? And I suppose the barrier borrowers because it’s not rural communities that are borrowing from these funds is that it’s getting to be companies that are suppliers to the benefit, the ultimate beneficiaries, who are the people in the villages or in the rural areas, is there really a demand from banks to supply these types of products that are focused on renewable energy.
Fatma: Yeah, thank you very much. That’s a very good question. We have noticed through the feasibility study, that there is not at the moment, a very large interest of the banks to invest in the sector. And this is one of the key barriers, which the program would like to address by making investment in the sector more attractive, and also by addressing why there are these blockages.
So one of the blockage is because of the perception of the high-risk person perception of these banks to invest in the sector. So hence, why we have designed the program in ways so that we provide de-risking instruments to share the risk with the banks. On this kind of investments, the interest is also limited, because the unique business models of decentralized renewable energy solution, it’s not the classical ongrid, power generation investments. And it requires different approaches to assess the risk of these investments, and also different instruments, different mechanisms of investment, different structures to develop robust, financing instruments, I would say. And also, it requires additional legal support to, structure the agreements, on the financing, etc. So I think it’s just I think the major barriers are due to the fact that it’s a new, relatively new sector, which is growing. But this, there is a unique opportunity here to support this sector to grow and to address this barrier, and to unlock interest of local bank and also to support their investments.
So we see this as our role as a development bank to address really the concrete barriers, the sector, if there were no barriers, then we don’t have any role to play. I mean, we hope that we achieve one day sector, which is quite fluid in the investment to private sector investment, and so that we don’t have any role to play in this in this sector, then we can say we have succeeded.
Grant: Yep, absolutely. So that’s the basis of the structure that you are putting forward there a guarantee mechanism, there is a loan mechanisms so that both the borrower is which accompanies suppliers of the services and the banks are encouraged towards using debt financing these type of financial mechanisms to provide and the services that are really in demand. So that sort of basis, and then that’s supported by your third component, which is the technical assistance, building knowledge and capacity related to putting together financial instruments with that sort of structure. Makes a lot of sense.
Thank you. And Tim, Fatma described this project within the context of a wider initiative and interest from the African Development Bank, to the sort of green finance area, broadly and also with other instruments that you have friends, for example, the safer program and such, like, give us some insight into how this project fits within that broader context. Perhaps some of your plans going forward, if you’re happy to share?
Tim: Yeah, thank you very much. Grant, as Fatima has rightly indicated, the bottlenecks that we’re trying to really resolve particularly on the financing side, and then also technical feasibility side and then the challenge that the DRA is really faced with when it comes to access to finance, and then also some market and currency risk that they does leave, try to resolve, these are some of the things that AFDP would like to pursue, I mean, there are several, there are several opportunities, several, structuring and financial tools, for example, that are available in other developed countries, that, certainly, we would like to also use in Africa, the whole, issue of even monetizing tax strategies in US, I mean, I worked in, in a transaction, where you have some tax equity investment, you have master limited partnerships, that you could use to actually improve the financial viability of the project and also improve liquidity, for the project, here, they are very very limited. And so, the instrument that we are mainly focusing on is the guarantee, the concessioner, debt, which makes GCF, a very, you know, a good partner, because, GCF is actually established to deal with these concessional issues.
So, it’s something that we will still pursue, we’ve done some form of local currency projects in there, this one is focusing exclusively in the renewable energy space. And for the areas but in the past, we’ve done some in the agricultural sector, working with Ecobank Ghana.
We hope to also be doing more using other financial instruments, that the constraints are really great. For example, if you take very low hanging fruit that could be done. And like I said, to the investment, it has to really have the support from the government where those tax incentives will be provided for the renewable energy transactions, where there, for example, renewable energy certificates that could be monetized, the government’s have to, and there are challenges, even at this stage like, feeding tariffs in other countries that, has not even been adopted by the cabinet. So, we have a very long way to go, although the financial tools are there, but I think we may have to work together with other colleagues, who,daily, more in the regulatory and policy space, so that we’re able to deploy some of these very useful financial instruments also.
Grant: Okay, thank you very much. Yes. One characteristic of energy access projects are the sort of cross-cutting nature and see that this is purely results area one, energy access, and it’s a mitigation project. Did you consider sort of a cross-cutting project addressing the adaptation elements, which at the moment are co-benefits in this project design? I know Just also the itap made a comment around that for this particular project about those co-benefits. And I’m interested in a little bit of the thinking and the dialogue that you had around whether it should be both mitigation and adaptation or just mitigation as was selected.
Fatma: Actually, we thought that there are adaptation benefits of the project because the target population is the vulnerable population talking about farmers here and electricity access to will provide an opportunity for the target population to diversify their revenues and to have access to additional activities that can support their economic development that, however, the issue which we have is that the countries which we have selected and in general in Africa, there are not enough historical data that would support the I would say the business case to build for adaptation for this program.
So, therefore, we were limited by the, we don’t have any data that would I mean, provide a strong argument for the patient, that’s why we thought actually, okay, so, we move to mitigation project with co-benefits of adaptation. So, the limitation of data is one of the key issues to make this project a cross-cutting project. Yeah, right.
Tim: Yeah, I mean, at what I can add to what I was saying, if the project had originally be conceived as a cross-cutting, maybe we could have done something about it. But even then, the requirement was, getting a little bit complicated and telling you, because we have other projects that are cross-cutting, and with adaptation focus, and as you are aware, there are three projects that were shut down by us for the B 29, this is in the publications, and if you follow in the proceedings, you will have noticed that So, this is information that is out there and we had a big challenge because the countries that we dealing with do not have reliable and adequate point source of observation data for those you know, analysis, if it is just adaptation benefit LEAF has very, very, several significant adaptations.
Fatma has noted the diversification, there is access to energy, which certainly decreases vulnerability, there is increased productivity because of the access to those like electricity improved, household income, productivity and all that. So, the COVID benefits are there, but if we are going to have an adaptation focus, that I SAP requires that we need to provide a minimum of 30 years of points of division data, that was the challenge for the league, and it was the same challenge for some of the adaptation projects and also the cross-cutting product that was submitted for B29th that did not go through. So, the challenge is data and what ISAP really will accept. If ISAP could have accepted crew, we could have use crew To do the analysis, because crew data is really available.
But to have points source observation data for a country like Guinea, which is one of the program countries is going to be a big challenge. So the decision that we made was that let’s get, you know, go back to the original design of the funding proposal, where the adaptation as the focal area was not considered, and then maintain the adaptation co-benefits and I think GCS Secretariat and ISAP were okay with that, so the project path.
Grant: Yeah, you got a very positive response from ITAP in the documents that are there in the board documents. So that’s certainly something well addressed. And it’s got a compelling mitigation focus. So doing the cross-cutting, add some extra elements, I think, the extra complexity, as you said, everyone, I think, is struggling with this requirement related to the scientific and technical basis for adaptation projects, this point source observation data, historical data, the lack of the availability of that, and Well, as you know, better than me, that was a major discussion point raised many times by the developing country constituency at the board meeting around what I kept veto and the climate rationale aspect of it. So it’s a complicated element there. Just briefly, one other point that was raised at the board had to do with the labour standards and labour conditions related to PV production and supply. Was that something that you specifically had to address within this proposal? Or was it something that AFDB’S policies and procedures already covered? Or was it merely a case of putting forward if DBS procedures clearly to the GCF, to address those concerns?
Fatima: Yeah, exactly. This is a very hot topic, I must admit, currently, the labour standard related to the production and supply chain of pv afdb. FTB has very strict measures and safeguards related to, to labour standards in general and to Yeah, we have zero tolerance for forced labour for child labour, and for this kind of practices and projects, and this is part of our due diligence process to ensure that the these are policies and procedures of ATR are covered when we assess to the various projects, however, I mean, this is a quite complicated subject, because there is no 100 transparency in the supply chain. There is no I would say, is the cat certificate mechanism, for example, to ensure that the solar systems are free from child labour and these kinds of practices.
So it’s a challenging subject, not only for investors for development banks but also for developers. I would say the market is not yet there to provide such transparency on the provenance of the equipment. And I think it’s not only FTB, who is encountering this challenge are other multilateral development banks and deifies also encountering the same challenges. We know the limitation of our due diligence process, although we have very strict measures and procedures for that, and policies. So I think we, our answer to that is to use our procedures, but also to work together with other MDBS with other partners to address these major issues and to find ways and mechanisms in the short terms and in the long term, to ensure that our policies and procedures are well applied on the various projects. Considering the limitation we have on really ensuring this provenance mechanism and all this, the parts of the equipment of the solar equipment. So it’s, I think it’s a process, we will try to address it in the short term, we will try to do our best to apply our procedures. But it’s also a process to where we need to collaborate with other partners, and also the harmonized way on how to address this point.
Grant: Thank you very much.
Tim: Then, what I would add to that is, if you follow and you remember the interventions from the board member from China, you will understand also the political dimensions of this and we are at AFDB, In fact, we really don’t need to take sides, and we have to make sure that we apply our procedures and policies which have been approved by the AFDB board comprising also of representatives, the governors and directors from China, from Europe, from US and other countries who also make up the GCM board. The concern is that we don’t have to really meddle in this politics but we have to be consistent in the application of our procedures to make sure that if any sourcing is done, it is sort in areas where there is no child labour or there is no forced labour and other critical related issues and then we avoid the political dimensions of that
Grant: Yeah, right, Thank you very much. It’s really complicated as you were saying there especially isn’t immediate finance here because you’re one step further removed from the actual borrowers and the borrowers then outsourcing equipment in the supply chains that you are a few steps that you are away from in essence. It’s a very complicated thing to both require and then monitor and follow up on. I think it’s a great and important point and it’s good to see that you are addressing that within this project. I just have a couple of more questions and I hope you have a moment for that. It will be really good, Tim, if you could tell us a little bit about yourself, your background and what led you to work at AFDB?
Tim: I had almost about 15years in corporate America after I finished my studies in US and the last firm that I worked with was Barilench and when the financial implosion happened in 2018, I think yeah, Grant, you may be aware or our listeners may be aware, I really saw the whole, fleet in a part of, that area/ sector and it dawned on me that look, you have all these experience, why don’t you just come and utilize it, for the benefit of Africa to support development in Africa. And so that was the motivation although it took that unfortunate incident to happen and I also find it that very useful because always we also talk about things that should be done in Africa. But I believe that it brings more credibility if you are in it and you are contributing than may be sitting somewhere, maybe in Europe or US, and telling people what should be done. And then when you, if you ask me about what I have really come to know this with all the aspirations that I came with or what has been my current view, I’ll let you know some of it.
I have actually let you and the others to know about some of the challenges, when I was coming, I was thinking there are lots of things that we were using in some of the transactions you know, for sustainable projects like renewable energy and energy efficiency, some of the instruments that we could deploy over here and we realised that no, in Africa we have a long way to go. But those were the things that really drove my motivation that you have this over 15years of experience why not just come to Africa and then also use these experiences to contribute to what is being done. And African Development Bank was one of the areas that I looked where my skills will be needed. I was working with AFDB in training financial institutions, banks, private equity firm, microfinance, insurance companies on the new financial systems that is coming and I got involved with AFDB on that. So when that opportunity came, I said why not just go to AFDB and then do this for them. so these were the reason why transitioned into Africa and joined the AFDB.
Grant: Thank you. Okay, so you have a chance to make more difference there on the ground. Thank you. And Fatma, for you what is your background, tell us a little bit about yourself and what you brought into this work?
Fatma: Yeah, so, my background, I am, actually, I have a background in two areas. So I have actually, I am an IT expert, that’s my background and I have transitioned in, I would say six years ago to the renewable energy sector. My motivation for that is both are innovative sectors, both are growth markets and I love actually to contribute to these growth markets. I like growth market, I have seen the opportunity there and so I think lots of innovation we can also scale up these growth market. Now I am not working anymore in the IT sector but I am working in the renewable energy and I am very happy about it. I have been also always entrusted to contribute to the green economy and also to support and address the challenges of climate change. I think there is a huge opportunity and if you want to make a difference as also Tim said, you have to be in the ground in Africa. Africa has a huge opportunity in these markets and we can actually reap out what has been done by developed countries. So, yes, so my motivation is really to contribute on the ground and to support the green economy and to support us with sustainable development. And we have plenty of challenges which we are facing.
We talked earlier about labour standard but I think this can be solved when we work together and when we work on the ground and when we address the current issues in the African continent. I have worked before in Germany, for a long time in the private sector and I have realized if I want to contribute to my country and to the African continent then we have to do it from there to understand the issues from there. It is not easy, it’s challenging but it’s something which we can do. Thank you.
Grant: Thank you very much and great to hear that. Strong motivation as well. In order to make a difference there on the ground to understand the context to be able to contribute there. Thank you very much. And really great huge thank you to both of you for joining me today. Its been a really fascinating conversation, good to hear about the initiatives that you’ve been taking here and I wish you all the success in the implementation of this project and of course in all your future endeavours and other climate finance projects. Hope to have the opportunity to speak with you again sometime soon. Thank you so much for joining us today.
Grant: I’m joined by my colleague, Jamal Gore, who is a principal consultant here at E Co. Jamal is a specialist in energy access projects and climate finance with extensive experience particularly in Africa. Jamal, welcome. What did you make of that discussion?
Jamal: Thanks, Grant. Well, I think Fatima and Tim did a really good job presenting this project. We’ve known for a long time now that investors tend to hold renewable energy projects to a higher standard than traditional power projects. And they hold the centralized energy projects to an even higher standard, even when comparing to grid based renewables. So if you’ve got an off grid renewables project, ironically, these are the projects that have perhaps the greatest development impact. And yet, they have the hardest time getting funded by investors. Now, what’s interesting about this project is that it levels the playing field. It systematically addresses those reasons that companies struggle to get these off grid renewable energy projects financed. One key component of the project works with financial intermediaries to appraise loans to help them get confidence lending in the sector and help reduce their transaction costs. So it makes it easier for them to lend cheaply. The project also works with governments to put in place more favorable policy and regulatory environments for these projects, to try and get some of those systematic barriers out of the way. And then it provides technical and managerial support to the companies and helps them overcome some of those capital constraints that have arisen, especially during the Covid-19 pandemic. So the idea behind all of this is to overcome those barriers, and then really get the ball rolling so that these activities can continue over the long term and help to reach underserved groups of people.
Grant: Yeah, it’s that comprehensive approach, isn’t it, that stands out in this project, addressing the barriers at multiple levels?
Jamal: Yeah, exactly. One of the things that jumped out at me- aside from the fact that it’s just a big project, $170,000,000.00, 6 countries across eastern West Africa- the thing that jumped out was the amount of preparation that was involved in putting it together. The team really wanted to make sure that they understood those barriers, and then devised approaches to address them and overcome them. The feasibility study for this project started three years before it was approved. And it involved detailed consultations with financial institutions, governments, local stakeholders, and beneficiaries, the companies themselves, and then the teams within the African Development Bank. So a tremendous amount of work. And, in a way, this is a distinguishing feature of GCF projects. Not just this project, not just energy or mitigation projects. There’s an expectation by the GCF, and by the board, that all of the planning, all of the background research is going to be done in advance. So that once the funding is released, the project team can move swiftly into implementation and address those climate challenges. This isn’t to say that those challenges in that work won’t be done in other types of projects and with other funders, but the GCF really does expect it all to be done up front. And it shows when the project is approved, and the team can describe how comprehensively they’ve addressed those issues.
Grant: I guess this one is, it’s a financing framework. So there’s going to be due diligence done at more of the transaction level. Or has the AfDB really brought all of that upfront within this proposal?
Jamal: It’s a great question, Grant. And it’s something that comes up a lot with GCF projects where, as I said, they expect as much detail to be put into the project documents as possible. But when you’ve got these frameworks, you sometimes don’t know yet the nature of those sub-investments. And when, as Tim and Fatima mentioned, the AfDB is sort of one step removed from the actual procurement and investment, what’s really important is to ensure that you’ve got systems in place to do that due diligence and report back. I imagine that they’ve identified a few early stage projects that are ready for investment, and have that detail to show to provide an indicative pipeline, and the rest of them will come but they’ll already have those processes in place so that they can roll out swiftly.
Grant: Yeah, we’re seeing that more and more, as you said, with GCF projects looking to have baseline studies, understanding what is in the early pipeline, the due diligence done on that early pipeline wherever possible so that there’s as much grounded in fact and analysis right at the start of the project before the GCF Board approval.
Jamal: Yes, indeed. The other thing about this project that stood out, and I really appreciated was Tim’s insight into the AfDB’s thinking about financial mechanisms. The GCF was set up in part and structure to allow funders and projects to move beyond grants. Grants are important, they have their role. But there’s a tremendous amount of private capital out there, from institutional investors and others. Trillions of dollars. And opening the door to a wider array of financial instruments- debt, equity, guarantees, blended finance and others, makes it easier to mobilize that private finance and achieve the type of scale that we need to overcome climate change challenges. So I was really pleased to see Tim speaking openly about the AfDB’s interest in tapping those approaches.
Grant: And including within the energy access sector, because we’re seeing those sources of finance to a limited extent, but certainly, it’s happening in the larger scale. Renewables sector, for example. It’s really, as you said, right at the beginning, energy access, that’s the most challenging, because there are some more challenges, more hurdles. But that’s where the greatest need is. And that’s also where the greatest need is for flow of private sector funding.
Jamal: Yes, indeed. And it’s not just the financial mechanisms that are interesting and innovative, but the business models that are emerging in that sector are as well. You’ve gone from revolving loans where each household had to purchase, say, a solar home system to fee for service models, where essentially, you’re paying for the energy not for the kit. And those models have lots of advantages as well, in terms of helping to drive long term sustainability. So there’s a tremendous amount of innovation that’s happening in this space, and it’ll be interesting to see how this project and the framework approach that it brings out to enable that.
Grant: Yeah, we’ll keep our eyes on it. Thank you very much, Jamal. Really appreciate it.
Jamal: Thank you, Grant.