Technical preparatory studies for the creation of a Green Bank / Facility to mobilize resources (public and private) to finance the energy transition and green growth in Benin.
Context
Investment in renewable energy (RE) and energy efficiency (EE) is increasing, but not fast enough to enable Benin to meet its nationally determined contribution (NDC) targets, including a greenhouse gas (GHG) emissions reduction of 48.75 MtCO2 by 2030. Consequently, the mobilization of private sector investment was deemed essential to enable the Beninese government to meet its climate change targets.
These additional clean energy capacities require total investments of 1,345 billion euros to be realized by 2025. Consequently, the scoping report by the African Development Bank (AfDB) and the Climate Investment Fund (CIF) highlighted Benin’s energy sector as a strong candidate for green bank support to mobilize resources to finance the energy transition and green growth.
Goal
CAA will support the broader technical assistance of the African Development Bank (ADB) by conducting preliminary technical and analytical studies in preparation for the development, implementation and operation of the CDCB Green Banking Facility. In addition, the proposed intervention will involve the financial and legal structuring of the green banking mechanism to comply with international investment criteria.
CDCB’s green bank mechanism will not only benefit from the best green finance mechanism structuring options, but will also gain the momentum of stakeholders and potential beneficiaries to ensure that the investment strategy aligns with climate resilience and profitability.
CAA Technical Assistance
The technical assistance will catalyze the development of a national renewable energy ecosystem and will therefore help to foster innovation, create new jobs, contribute to gender equality in the green finance value chain, and increase the availability of capital.
Group Baastel’s technical support includes the following components:
- A legal structuring component, which includes an analysis of the country’s institutional, regulatory, fiscal and legal environment and an analysis of the regulatory constraints and structuring options of the Green Bank Facility (GBF);
- The design of an appropriate governance framework for each structuring option, aligned with the agreed upon international conventions, namely the Paris Agreement;
- Implementation of an operational manual detailing the procedures of the Green Bank Facility.
