Deutsche Bank – Responsibility
April 28, 2013

GET FiT – The pilot in Uganda taking shape: project proposals presented

On a meeting of numerous representatives of the different stakeholders of GET FiT in Kampala on the 9th of April private investors as well as developers demonstrated huge interest in the GET FiT pilot in Uganda.

Since end of March developers could present potential projects to built renewable energy generation capacities to apply for support under the GET FiT pilot.

First financial contributions have been announced by the governments of the United Kingdom and Norway. Worldbank is expected to decide on first guarantees for projects under the GET FiT pilot presumably already at the beginning of the 2nd half of 2013.

These developments confirm our assessment that the creation of a stable regulatory environment in developing countries (“enabling environment“) rather than project-based support for individual developers increases transparency and visibility for the private sector.

Joseph Nganga, a project developer at responsAbility Renewable Energy Company, also shares this view: "As a project developer/investor, we have found the renewable energy space as one of high potential sectors to invest in here in Uganda. However, barriers such as the creditworthiness of the offtaker, anemic financial returns relative to the risks (perceived or otherwise) and availability of affordable and long term debt have limited our investments. The GET FiT program offers a comprehensive solution that in association with Uganda Government efforts such as the standardized PPA, now unlocks these barriers. By providing a top up on the tariff, the program enhances project returns enough to overcome the risk premium hurdle. The ingenious design of this top up both enhances returns while providing flexibility in structuring both debt and equity. World Bank guarantees offer solutions on key risks without which we would be less incentivized to make the long term investments that renewable energy requires. In a market where debt is often times very expensive, incredibly short term and predominantly corporate finance rather than debt finance, the program's Private Financing Mechanism will rope in appropriate debt without which we as equity investors cannot invest in the sector. "

Orli Arav, Head of Project Finance at Frontier Markets Fund Managers (FMFM), confirms that assessment: „The pioneering Get Fit program is providing the key elements for bankable mini hydro projects in Uganda, thus enabling a true PPP. Without the Get Fit program a number of projects which can deliver much needed power would not be financed.“

The objective of GET FiT is to combat climate change and the lack of available energy by supporting investment in capital intensive renewable energy sources in emerging and developing countries. The GET FiT program is unique and innovative in its philosophy and approach. By offering a comprehensive support package, it goes well beyond the conventional wisdom of how to promote private investment in renewable energy.

GET FiT – Global Energy Transfer Feed-in Tariffs – was developed in January 2010 by experts of Deutsche Bank Climate Change Advisors. The Advisory Group on Energy and Climate Change (AGECC) of the Secretary General of the United Nations had asked the latter to present new concepts for promoting renewable energy investments in developing regions. Following more than one year of lobbying work for the GET FiT concept among public sector players, Deutsche Bank has entered into a “joint venture” with KfW to develop the GET FiT pilot in Uganda.

“As a project developer/investor, we have found the renewable energy space as one of high potential sectors to invest in here in Uganda.”

Joseph Nganga Project developer at responsAbility Renewable Energy Company

“The pioneering Get Fit program is providing the key elements for bankable mini hydro projects in Uganda, thus enabling a true PPP. Without the Get Fit program a number of projects which can deliver much needed power would not be financed.”

Orli Arav Head of Project Finance, Frontier Markets Fund Managers (FMFM)

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