A Transformational North Africa/Middle East Solar Power Program: Bright Prospect for the Clean Technology Fund

April 30, 2009
This is a joint post with Joel Meister and Matt Hoffman. North Africa Solar Power MapThe May 11-12th meeting of the Clean Technology Fund’s Trust Fund Committee will consider a proposed $6-8 billion solar thermal power program for North Africa and the Middle East, according to the World Bank’s Climate Investment Funds website. The concept note, Clean Technology Fund: Concept Note for a Concentrated Solar Power Scale-up Program in the Middle East and North Africa Region, cites CGD research on solar radiation potential in the region and is the most encouraging sign yet of CTF stakeholders’ commitment to clean energy development. The note proposes CTF co-financing of $750 million, or about 10% of the $6-8 billion needed to develop the multi-gigawatt solar thermal power program. It would install capacity equivalent to 8-10 commercial-scale plants, or about 10% of currently-planned global solar thermal capacity. The proposal anticipates a decision by the Trust Fund Committee in October 2009, after consultations with stakeholders and civil society organizations. Echoing my Congressional testimony last year, the proposal’s authors explain the long-term benefits of this strategic investment in renewable energy:
Such an investment program would provide the critical mass of investments necessary to attract significant private sector interest, benefit from economies of scale to reduce cost, result in organizational learning in diverse and several operating conditions, and manage country and technical risk. An investment program at this scale would firmly establish the region on the transformational path of achieving 5 GW of installed CSP capacity by 2025 and provide the stimulus necessary for replication in other developing countries.
The proposed program would give a much-needed boost to solar thermal power, whose growth has been threatened by the global economic recession. Despite the credit crunch, some companies are still moving forward in developing countries. It was recently announced that U.S.-based eSolar has licensed its technology to India’s ACME Group, which will construct up to 1,000 megawatts of solar thermal power capacity in India over the next ten years – without subsidies if necessary. This major commitment strongly supports our own finding, summarized in Desert Power, that a scaled-up solar thermal power sector can be cost-competitive with coal-fired power. The CTF may have gotten off to a shaky start, but acceptance of the North Africa/Middle East solar proposal would certainly reassure the environmental and development policy communities – not to mention Capitol Hill – that the CTF is serious about focusing on renewable energy. To promote this goal, the CGD climate team will soon release the first edition of its CTF Monitor – a detailed analysis of CTF investment proposals that have already been approved by the Trust Fund Committee.


CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.