Pooling Mechanism

The overarching objective of the Pooling mechanism is to provide for increased and sustainable access to financial resources for medium-size investment projects (total investment cost in the approximate range of €10.000.000-50.000.000) targeting the principal objective of the Energy Facility: the improvement of access to modern energy services in rural and peri-urban areas in ACP countries. Priority will be given to projects relying on renewable energy sources and energy efficiency measures while taking into account the specificity of local context, the optimisation of local resources and sustainability considerations.

 

The specific objectives sought with the creation of the Pooling mechanism are the following:

 

  1. To propose a flexible financing tool for medium-size investment projects for access to energy in ACP rural and peri-urban areas. The Pooling mechanism will support projects, which scale and complexity go beyond the scope of the Call for Proposals (CfP), by providing a flexible instrument, complementary to the CfP, which will allow for a continuous process of open submission of projects by applicants, in-depth discussion and negotiation. This process is expected to lead to the approval of better prepared projects, thus allowing for their smoother implementation.
  2. To encourage private sector investments in energy sector in rural and peri-urban areas in ACP states by bridging the funding gap between revenues and costs, thus strengthening the "bankability" of the projects and helping to mobilise longer term financing instruments. The Energy Facility, through the Pooling mechanism, can contribute especially to projects characterising with a low level of return and important socio-economic benefits and to the accompanying capacity building activities necessary for the successful project  implementation.
  3. To maximise the impact of the Energy Facility grants through blending its grants with loans and enhance the interest of the EU development financing institutions towards rural and peri-urban electrification projects in ACP countries, which under competitive market conditions do not attract a sufficient level of private sector and loan investment.
  4. To create a platform for coordination at EU level of available resources and expertises in the energy sector, and more specifically for energy access in ACP countries. The Pooling mechanism is expected, on the one hand, to increase the complementarity of the financial resources of the EU multilateral and bilateral donors and finance institutions and thus increase their impact, and on the other, to strengthen the synergies and the exchange of experience and ideas at EU level.

 

Please consult the EuropeAid website for more information.

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