THE African Development Bank will invest $12 billion in the energy sector by 2020 from its own resources and leverage additional financing, about $45-$50 billion, from partners including the private sector and other development financial institutions because the bank sees energy as “crucial” to the continent.
In fact, AfDB has become the first multilateral institution to set up a vice presidency complex for Power, Energy, Climate and Green Growth and appoint a management team.
Also, the staff complement of the energy complex, currently at 60 will grow to 100 by year-end because the bank sees the issue of energy as crucial for Africa.
AfDB last year launched a New Deal on Energy for Africa, which is built on five inter-related and mutually reinforcing principles including raising aspirations to solve Africa’s energy challenges; establishing a Transformative Partnership on Energy for Africa; mobilising domestic and international capital for innovative financing in Africa’s energy sector; supporting African governments in strengthening energy policy, regulation and sector governance; and increasing African Development Bank’s investments in energy and climate financing.
The bank’s energy strategy, central to implementing the New Deal, focuses on seven areas, which include setting up an enabling policy environment, transforming utility companies for success, dramatically increasing the number of bankable energy projects, and increasing the funding pool to deliver new projects.
The strategy also includes supporting “bottom of the pyramid” energy access programmes, particularly for women, accelerating major regional projects to drive integration and rolling out waves of country-wide energy “transformations”.
These priorities will be implemented through a series of flagship programmes such as IPP procurement, power utility transformation, an early stage project support facility and related catalytic programmes, mobile payment initiatives, and a regional project acceleration programme.
“The provision of sufficient, reliable and affordable electricity to Africa is the first priority of the bank. The target of the New Deals for Energy for Africa for a universal access to electricity by 2025 requires the implementation of landmark and transformative regional projects such as Batoka. The New Deal is meant to address the persistent lack of reliable electricity in African countries,” AfDB vice president of the Power, Energy, Climate and Green Growth complex, Amadou Hott said.
Pursuing this strategy, the bank’s total approvals last year reached $1,7 billion. These projects ranked from operations to power generations and public sector transmissions and distribution. This year the bank is expecting to invest $2 billion in the energy space in Africa from its own resources.
Another bank, Standard Chartered Bank which has in the past invested more than $5 billion in the power generation in Africa, said it was considering funding other energy projects on the continent.
An investor conference convened by Zimbabwe and Zambia last week heard of opportunities for financiers, developers, contractors and off-takers in the region.
Addressing delegates at the investor conference for the Batoka Gorge Hydro-Electric Scheme Zambian Energy Minister David Mabumba said in order to stimulate investment in the mining and manufacturing sectors and also to promote social and economic development, a stable and reliable supply of electricity is paramount.
Zimbabwe and Zambia have embarked on a project to develop the 2 400MW Batoka Gorge Hydro-Electric Scheme. The scheme will comprise the construction of 181m high arch gravity roller compacted concrete dam as well as, two surface power stations located on either banks with an installed capacity of 1 200MW each. And for this the two countries are angling for the financial institutions and private institutions money.