(Togo First) - The West African Development Bank (BOAD) and WAEMU States must prioritize projects focusing on skills transfer, research and development, in regards to clean energy financing. This was declared by Benin’s Minister of Finance, Romuald Wadagni, also Chairman of WAEMU’s ministers’ council, on November 14, on the sidelines of the 45th anniversary of the regional bank.

“I urge BOAD to focus on projects that leverage local content,” Wadagni said. He then encouraged “the region’s various member-States to make sure projects financed by the BOAD focus on skills transfer, research and development”.

These projects will, according to the Beninese minister, contribute to sustainability of production and distribution units, at low cost.

WAEMU must invest in research and develop to profit from various opportunities

According to Romuald Wadagni, the renewable energy sector grows even faster than new technologies.

“In 2016, when we came, there were many discussions on photovoltaic energy at the government. At the time, many experts said this type of power source was relatively unstable and could destabilize our grid during periods of low production. Now, almost three years later, this concern is almost solved since we have found ways to control and store PV energy injected in the grid.”

In regards to cost, which was thought to be too high a few years ago, the former Deloitte executive said: In its latest report, the International Renewable Energy Agency revealed that since 2010, cost of photovoltaic energy reduced by 73% and that by 2020, it could fall by another half.

Moreover, he mentioned the need for WAEMU countries to prioritize and invest in research and development, the only way to almost control the whole chain, from production to final consumption. “We have a constant access to the sun, the primary source (Ed.note: From which PV energy is derived). If we are not careful and leave those without constant access to the sun to lead research and development, it will be difficult for us to benefit from related impacts. This is true since it is those leading research and development who control commercialization of energy on the market. We must therefore focus on projects that are research and development oriented,”  Wadagni warned.

Relying on innovative financial instruments to boost mobilization capacity at favorable conditions

While praising BOAD’s top management for good performances it recorded over the past five years, the head of WAEMU’s ministers’ council since last July pointed out some challenges to overcome over the next five years, making some recommendations even in this regard.

The latter includes improving BOAD’s lower medium investment grade (Baal for Moody’s and BBB for Fitch), in order to increase its capacity to raise more funds at favorable conditions.

He recommended for the Lomé-based institution, some innovative funding mechanisms such as the World Bank’s credit lines, knowingly regional IDA loans to secure from international institutions long-term financings with interest rates below 2%, just like Benin did. Indeed, the country recently got its first international commercial loan amounting to €260 million, using World Bank’s IDA loans rated triple A. The loan matures over 12 years and has a margin of less than 3.5%.

Fiacre E. Kakpo