AfDB commits $164m to promote renewable energy in Nigeria, others
The African Development Bank Group has approved the Leveraging Energy Access Finance Framework (LEAF), under which the Bank will commit up to $164 million to promote decentralized renewable energy in Nigeria and five other African countries, a statement by the AFDB has shown.
According to the statement, 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.
While the program is worth $800 million by estimation, it is expected to help spur commercial and local currency investments to scale up the activities of decentralized renewable energy companies in Nigeria, Ghana, Guinea, Ethiopia, Kenya, and Tunisia, according to the statement.
Daniel Schroth, Acting Director in charge of Renewable Energy and Energy Efficiency Department, AFDB said, “The approval of this program is very timely as it increases the Bank’s toolbox to support the fast-moving decentralized energy access market which complements conventional grid-connected solutions.”
Recall, the AFDB developed the LEAF program, in collaboration with the Green Climate Fund, which approved $170.9 million in concessional financing for it in July 2021.
In addition, 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.
And this why over next 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.
Kevin Kariuki, the Bank’s Vice President in charge of Power, Energy, Climate Change and Green Growth made a remark that “The African Development Bank is delighted to partner with the Green Climate Fund on the Leveraging Energy Access Finance Framework, which will not 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.”
Also, 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.
“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 statement reads.