PREP Highlight: Scaling-up Renewable Energy Program (SREP)
Overview
The Scaling-up Renewable Energy Program (SREP) is a multi-donor programme within the framework of the Climate Investment Funds (CIF). The Netherlands is one of the founding donors. Through a programmatic approach, it supports seven countries with transformational change in their renewable energy sector. In this way, SREP aims to demonstrate the viability of low-carbon development pathways in low-income countries.
Transformation of Renewable Energy Markets
SREP is a ‘country-led program’ that builds on national opportunities and priorities. The participating developing countries draw up an investment plan that is aimed at a structural transition to renewable energy. SREP interventions are directed to take away investment bottlenecks and increase investor confidence. SREP has planned to develop the needed capacity to monitor the investment flows in the partner countries. SREP does not primarily target (energy access of) households, but prioritizes ‘productive use’ of renewable energy by industry and businesses.
Example: Breakthrough in Geothermal Energy in Kenya
One example is the exploration of the Menengai geothermal field in Kenya. This East-African country already has operational geothermal power plants in the Olkaria field (in Hell’s gate national park), which generate 202 MW. Private companies have however been reluctant to invest in the development of promising new fields like Menengai because of the high costs and risks involved. SREP has agreed to invest US$ 40 million in the development of the geothermal resource, leveraging US$ 360 million additional investment from Kenya and multilateral development banks. This investment is expected to unlock a further US$ 400 million investment in a 200MW geothermal power plant and ultimately contribute to Kenya’s target to develop 5,000MW of geothermal energy by 2030.
How it works
SREP starts from country investment plans with comprehensive analyses of the renewable energy sector and the main bottlenecks for private sector investment. The investment plans are owned by the government and agreed with the multilateral development banks. They are drawn up through consultation with all stakeholders and checked by means of an expert review. The investment plans must finally be endorsed by the SREP sub-committee. Currently investment plans have been endorsed for Kenya, Honduras, Nepal, Mali and Ethiopia. Maldives and Tanzania are in the process to develop an investment plan.
After endorsement of the investment plan, investment projects are prepared by the government, development partners and the multilateral development banks. The Kenya geothermal project, funded through the African Development Bank, is the first investment project to have been approved by the SREP sub-committee.
Per country, SREP will invest US$ 30 to 50 million in investment projects to be proposed in the period 2011 to 2014. The Netherlands contributes US$ 76 million (Euro 53,4 million).
Climate Investment Funds
The Climate Investment Funds have been set up to give developing countries a jump-start towards climate-smart development. They are implemented by the World Bank in cooperation with AfDB, ADB, IDB and EBRD. Over the past three years, the Climate Investment Funds (CIFs) have moved fast from design to active implementation of investment projects.
The CIFs total US$ 7 billion and consist of:
- the Clean Technology Fund (CTF, US$ 4.8 billion): renewable energy, energy efficiency and sustainable transport in 15 middle income countries
- the Strategic Climate Fund (SCF, US$ 2.2 billion): targeted programs to pilot new approaches in low-income countries:
- Scaling-up Renewable Energy Program (SREP, US$ 364 million): low carbon development of energy sectors in 7 low-income countries
- Forest Investment Program (FIP, US$ 639 million): reduce emissions from deforestation and forest degradation in 8 countries
- Pilot Program for Climate Resilience (PPCR, US$ 1.2 billion): mainstream resilience in development planning in 9 countries
The governing board of the CTF and SCF trust funds is composed of developing countries and donor countries. In SREP, governance is organized through a sub-committee of six developing countries and six donor countries. The SREP sub-committee is currently co-chaired by Honduras and the Netherlands.
Further Information
