AFDB Approves $164m To Promote Renewable Energy In Six African Countries

(AFRICAN EXAMINER) – African Development Bank (AfDB) has approved the sum of $164 million under the Leveraging Energy Access Finance Framework (LEAF), to promote decentralized renewable energy in six African countries.

The $800 million programme will help spur commercial and local currency investments to scale up the activities of decentralized renewable energy companies in Ghana, Guinea, Ethiopia, Kenya, Nigeria, and Tunisia.

The AfDB developed the LEAF programme, in collaboration with the Green Climate Fund, which approved $170.9 million in concessional financing for it in July 2021. The framework forms part of the Bank’s broader off-grid strategy under the New Deal on Energy for Africa and complements existing initiatives, such as the Sustainable Energy Fund for Africa

Under LEAF, some 18 decentralized renewable energy projects are expected to be financed, providing access to six million people and businesses, resulting in 28.8 million tonnes CO2 eq. in greenhouse gas emission reductions over the lifetime of the systems.

Over six years, LEAF will deploy concessional finance, credit enhancement instruments and technical assistance to crowd-in private sector investors, including local banks, to finance and accelerate efforts to power the continent.

Meanwhile, many African countries still face challenges in achieving universal access to sustainable, clean, affordable and reliable electricity. According to the latest Sustainable Development Goal (SDG) 7 tracking report, close to 600 million Africans lack access to electricity. As a result of the Covid-19 crisis, the number of people without access to electricity increased again for the first time in recent years.

Notably, scaling up decentralized renewable energy (solar home systems, green mini-grids, and solar solutions for commercial and industrial use) is crucial to achieving the SDG7 objectives and requires significant private sector and local currency financing.

The Bank’s Vice President in charge of Power, Energy, Climate Change and Green Growth, Dr. Kevin Kariuki said the Bank is delighted to partner with the Green Climate Fund on the LEAF, which will not, according to him, only accelerate access to electricity based on decentralized renewable energy solutions, hence reducing the respective countries’ carbon footprints, “but will do so with the active participation of a private sector facilitated by local currency financing and commercial capital availed under the program”.

Similarly, AfDB’s Acting Director in charge of Renewable Energy and Energy Efficiency Department, Dr. Daniel Schroth described the approval of the programme as very timely as it increases the Bank’s toolbox to support the fast-moving decentralized energy access market which complements conventional grid-connected solutions.