Nairobi, May 26, 2022 – The African Trade Insurance Agency (ATI) and the Republic of Togo have signed a Memorandum of Understanding (MoU) which will enable Independent Power Producers (IPPs) in Togo to benefit from ATI’s Regional Liquidity Support Facility (RLSF). RLSF, a joint initiative of the African Trade Insurance Agency (ATI), the KfW Development Bank and the Norwegian Agency for Development Cooperation (Norad), is a financial product that is designed to address the short term liquidity risk faced by small and medium sized IPPs that sell electricity to state owned power utilities – improving bankability and helping such projects reach financial close.
The signing of this RLSF MoU is a major milestone for Togo as the country works towards achieving universal electricity access- currently less than half of the Togolese population has access to electricity. RLSF will ensure that IPPs operating in Togo receive protection against payment risks that often contribute to their failure.
Additionally, Togo’s onboarding on to RLSF will lead to significant progress in de-risking renewable energy projects which should spur additional investments from project developers and lenders owing to the improved risk profile of the projects.
The country has the potential to develop a diversified energy mix, with renewable energy sources like solar and hydro contributing towards future electricity generation. Thanks to RLSF, more renewable energy projects in Togo will reach financial close and will ultimately strengthen the country’s generation capacity, thereby reducing its energy dependence on imports from neighboring countries.
In addition to Togo, seven of ATI’s member countries have entered in to Memoranda of Understanding with ATI and can benefit from RLSF: Benin, Burundi, Côte d’Ivoire, Madagascar, Malawi, Uganda and Zambia.
Press Release 2022/0526/Nairobi
Press Contact:
Sheila Ongas
Communications Officer
African Trade Insurance Agency
Mobile +254 728 600 180
Note to editors:
About The African Trade Insurance Agency
ATI was founded in 2001 by African States to cover trade and investment risks of companies doing business in Africa. ATI predominantly provides Political Risk, Credit Insurance and, Surety Insurance. In 2020, ATI closed the year with a gross exposure of US$6.3 billion and a net profit of US$39.4 million, owing to a strong demand for ATI’s insurance solutions from the international financial sector and from African governments. Since inception, ATI has supported US$70 billion worth of investments and trade into Africa. For over a decade, ATI has maintained an ‘A/Stable’ rating for Financial Strength and Counterparty Credit by Standard & Poor’s, and in 2019, ATI obtained an A3/Stable rating from Moody’s.
About The Regional Liquidity Support Facility (RLSF)
ATI and the German Development Bank, KfW, with financing from the German Federal Ministry for Economic Cooperation and Development (BMZ), launched the RLSF in 2017. The Facility was created to help tackle climate change and attract investments by supporting renewable energy projects in ATI’s member countries. RLSF has an initial capacity of EUR 63.2 million and it supports small and mid-scale renewable energy projects with an installed capacity of up to 50 MW (and in exceptional cases up to 100 MW) by protecting the developers against the risk of delayed payments by public off-takers; in turn improving project bankability and ensuring that more projects reach financial close.
https://www.ati-aca.org/energy-solutions/facilities/regional-liquidity-support-facility/
About KfW Development Bank
KfW is Germany’s leading development bank, wholly owned by the German Government and the federal states. It is one of the major implementing agencies of German development cooperation. On behalf of the German Federal Government KfW finances investments and advisory services in developing countries, typically with governmental institutions. KfW projects are aimed at sustainable economic development, social infrastructure and environmental protection.
About Norad
Norad is the Norwegian Agency for Development Cooperation. The Agency is a directorate under the Norwegian Ministry of Foreign Affairs. In matters regarding Norway’s International Climate and Forest Initiative (NICFI), NORAD reports to the Norwegian Ministry of Climate and Environment. NORAD’s main purpose is to ensure that Norwegian development aid funds are spent in the best possible way, and to report on what works and what does not work. In addition to Grant programmes, NORAD’s main tasks are Aid advisory services, Quality assurance and monitoring, Communication and Evaluation.
