News

Top Stories – June 2017

AfDB combines energy & agriculture in fundraising drive, and commits Sh.1.2 trillion to light up Africa

The African Development Bank (AfDB) has embarked on a fund-raising drive to finance the expansion of energy, with the immediate aim of connecting 200 million people with clean energy even as it continues its push to unlock barriers to effective investments in the agriculture sector. AfDB will spend Sh1.2 trillion ($12 billion) to enhance electricity access in Africa in the next five years.

Access to electricity remains a challenge and the bank is determined to change the trend. The bank’s goal is to help achieve universal access to electricity by 2025. AfDB is at the forefront of the renewable energy and ‘Off-Grid Revolution’ in Africa.

AfDB is directly involved in expanding the opportunities for African countries that plan to raise funds externally to access the financial markets for onward lending. Its broad-based development agenda identifies the lack of energy, access to electricity as a critical challenge undermining efforts to unlock the full economic potential of small-scale farmers. 

To address the challenge, the Bank’s President unveiled the “New Deal on Energy for Africa,” aiming to provide energy to 205 million people in Africa by 2025, with 75 million of those being connected through solar energy and other connections outside the national electricity grids. Under the New Deal on Energy for Africa strategy, the bank will also leverage between Sh4.5 trillion and Sh5 trillion ($45-50 billion) respectively from the private sector to light up and power Africa.

AfDB is working with companies to ensure national electric grids are managed sustainably and profitably, and will ensure reforms within institutions which supply power and guarantee funding for power firms through a US $500-million financing facility to support solar and national grid connections. These measures could cut the current cost of solar power by 50 percent.


IFC to provide US$55 million in funding for Mozambique’s first utility-scale PV project

The International Finance Corporation, a member of the World Bank Group, will provide a financial package of US$55 million to build Mozambique’s first utility-scale PV project. The financing includes US$19 million from IFC’s own account, US$19 million from Climate Investment Funds and a syndicated loan of up to US$17 million.

IFC’s financing will support the development of a 40.5MW PV project in Mocuba, Mozambique — which is being developed by Norwegian IPP Scatec Solar and Mozambique’s electricity utility Electricidade de Moçambique (EdM). Funds are being mobilized from the Emerging Africa Infrastructure Fund, which provides debt products to private sector infrastructure projects in sub-saharan Africa. This investment will expand electricity supply in one of the least developed regions of the country while also supporting electricity infrastructure and promoting foreign direct investments at an important time.