AfDB, Swedfund Partner To Boost Power Transmission Line Projects In Africa

Posted by African Examiner African News, Energy, Latest Headlines Thursday, May 26th, 2022

(AFRICAN EXAMINER) – African Development Bank (AfDB) and Swedfund International AB (Swedfund), have jointly signed an agreement to enhance private sector participation in independent power transmission line projects in Africa.

Swedfund is Sweden’s development finance institution with the mission to contribute to poverty reduction through sustainable investments in developing countries.

The Project Accelerator is a facility within Swedfund with the objective to support the development of sustainable projects through sustainable procurement and strengthening of capacity in public institutions.

By providing grant support and technical know-how to public institutions for feasibility studies and other project preparatory work, the Project Accelerator contributes to the implementation of Agenda 2030.

Under the agreement, the Bank Group and Swedfund will collaborate to promote private sector participation in transmission, mainly through public-private partnerships. This will be achieved through project preparation and advisory support to African countries to encourage reforms that boost private sector investment and public-private partnership projects, including stakeholder capacity building.

The collaboration between the Bank and Swedfund, governments and regional power pools, will enable the identification of eligible priority projects and the development of bankable transmission line project pipelines

In addition, different public-private partnership procurement and financing structures, which have been successful in mitigating typical risks in similar contexts globally, will be evaluated and benchmarked.

Private sector investment is critical to filling the gap, but requires adequate technical, regulatory, financial systems, and politically enabling environments, as well as equitable risk-sharing arrangements, to address the basic pre-requisites for national and regional transmission projects, such as clarity on land rights and permits, and harmonization of standards, regulations and wheeling tariffs.

Transmission infrastructure requires significant investment, which cannot be met by governments alone. The impact of the Covid-19 pandemic and increasing public debt burdens, have led to fiscal constraints and infrastructure financing deficits.

AfDB’s Vice President Power, Energy, Climate & Green Growth, Dr. Kevin Kariuki said the collaboration between the Bank and Swedfund is one of several transformative partnerships envisaged under the New Deal on Energy for Africa and the Bank’s High 5 strategic priorities, in particular Light Up and Power Africa.

The Bank will be able to leverage Swedfund resources to support regional member governments in the development of high-impact public-private transmission line projects, which will increase penetration of renewable energies on the grid and consequently move Africa towards a clean energy transition”, he said.

Swedfund Chief Executive Director, Maria Håkansson said her organization looks forward to collaborating with the Bank on delivering support for the development of bankable transmission projects.

This, according to her, will be an important step in facilitating private sector participation to increase transmission capacity and lay the foundation for further development of renewable energy in the region.