The presentation is targeted to the general public. It is a brief look at Results-Based Financing in the context of the African Renewable Energy Initiative (AREI). The AREI significant as it is Africa's statement of commitment to the sustainable energy component of the global 2015 Sustainable Development Goals, and aims to drastically reduce the continent's energy poverty.

1. Results-Based Financing
(RBF) - a Development
Financing Option for the
African Renewable Energy
Initiative (AREI)

2. What is the African Renewable Energy Initiative
(AREI)?
Image source: www.afdb.org
AREI: The Africa-wide commitment
to increase the continent’s renewable
energy generation capacity by at least 10
Gigawatts by the year 2020, and to 300
Gigawatts by 2030 (as reported by the
Guardian newspaper)
 AREI was announced on December 7,
2015 at the Paris climate change talks
 Solar energy production will be a major
component of AREI

3. Why the AREI Matters
The AREI is also Africa’s commitment to goal 7 of the Sustainable
Development Goals announced in 2015
Over 591 million Africans lack access to energy (African Development
Bank). As a result:
• Small businesses cannot thrive because of the lack of power
• Children’s education (and specific emphasis on girls’ education) is hindered
• Hospital patients’ lives are endangered as a direct result of the lack of
electricity
To succeed, AREI will require innovative mixes of development
finance across different African countries

4. Results–Based Financing (RBF)
RBF is financing provided to development projects that give agreed,
measurable results – in other words, development finance for
projects that work.
• RBFs can be arranged by donor governments, multilateral development
banks such as the World Bank, or philanthropists like the Bill and
Melinda Gates Foundation.
• Recipients of RBFs are the development partners who make/deliver the
services, goods, equipment, etc. to the people who receive
development assistance.
So… Are there possible RBF options to help the AREI succeed?

5. Matching Some RBF Options to AREI Challenges
Some Potential AREI Challenges
Convince renewable energy vendors
of profitability (positive risk/return
outcomes) in remote/rural areas
populated by very low-income
individuals/households
Scale-up proven solar-powered
technologies to small businesses and
hospitals
Matching RBF Options (World
Bank)
Advanced Market Commitment:
Finance purchase of pre-determined
quantity of vendor product for the
rural areas that will have the greatest
difficulty affording (for example)
portable solar powered lighting to
replace fossil-fuel powered lanterns.
Performance-based Funding: Based
on pre-agreed criteria, pay the
renewable energy provider according
to how many hospitals and businesses
have actually converted to the new
technology