Africa has huge renewable energy potential with some of the world’s largest concentration of alternative energy resources in the form of solar, wind, hydro, and energy. Overall, 17 countries in sub-Saharan Africa are in the top-33 countries worldwide with combined reserves of solar, wind, hydro, and geothermal energy far exceeding annual consumption. Most of the sub-Saharan countries receive solar radiation in the range of 6-8 kWh/m2/day, which counts among the highest amounts of solar radiation in the world. Until now, only a small fraction of Africa’s vast renewable energy potential has been tapped. The renewable energy resources have the potential to cover the energy requirements of the entire continent.
The African Development Bank has supported its member countries in their energy development initiatives for more than four decades. With growing concerns about climate change, AfDB has compiled a strong project pipeline comprised of small- to large-scale wind-power projects, mini, small and large hydro-power projects, cogeneration power projects, geothermal power projects and biodiesel projects. The major priorities for the Bank include broadening the supply of low-cost environmentally clean energy and developing renewable forms of energy to diversify power generation sources in Africa. The AfDB’s interventions to support climate change mitigation in Africa are driven by sound policies and strategies and through its financing initiatives the Bank endeavors to become a major force in clean energy development in Africa.
Energy projects are an important area of the AfDB’s infrastructure work, keeping in view the lack of access to energy services across Africa and continued high oil prices affecting oil-importing countries. AfDB’s Programme for Infrastructure Development in Africa (PIDA), and other programmes, are in the process of identifying priority investment projects in renewable energy, which also include small and medium scale hydro and biomass co-generation. The Bank supports its member countries towards developing renewable energy projects in three ways:
- By encouraging countries to mainstream clean energy options into national development plans and energy planning.
- By promoting investment in clean energy and energy efficiency ventures
- By supporting the sustainable exploitation of the huge energy potential of the continent, while supporting the growth of a low-carbon economy.
FINESSE Africa Program
The FINESSE Africa Program, financed by the Dutch Government, has been the mainstay of AfDB’s support of renewable energy and energy efficiency since 2004. The Private Sector department of AfDB, in collaboration with the Danish Renewable Energy Agency (DANIDA), has developed a robust project pipeline of solar, wind, geothermal and biomass energy projects for upcoming five years.
The FINESSE program has helped in project preparation/development for Lesotho (rural electrification by means of different sources of renewable energy), Madagascar (rural water supply using solar water pumps), Ghana (energy sector review) and Uganda (solar PV for schools and boarding facilities), as well as on the development of the energy component of the Community Agricultural Infrastructure Improvement Program in Uganda (solar PV, hydropower and grid extension), the Bank’s initiative on bio-ethanol in Mozambique (including co-funding a recent bio fuels workshop in Maputo) and the AfDB Country Strategy Paper revision in Madagascar.
Clean Energy Investment Framework
The AfDB’s Clean Energy Investment Framework aims at promoting sustainable development and contributing to global emissions reduction efforts by using a three-pronged approach: maximize clean energy options, emphasize energy efficiency and enable African countries to participate effectively in CDM sector. The AfDB’s interventions to support climate change mitigation in Africa are driven by sound policies and strategies and through its financing initiatives the Bank endeavors to become a major force in clean energy development in Africa.
In order to finance energy access and clean energy development operations, the Bank Group will draw on resources from its AfDB non-concessional window to finance public-sponsored projects and programs in countries across Africa. According to the Framework, AfDB will work with a range of stakeholders (national governments, regional organizations, sub-sovereign entities, energy and power utilities, independent power producers and distributors, sector regulators, and civil society organizations) on key issues in clean energy access and climate adaptation in all regional member countries.
Climate Investment Funds
Part of the AfDB’s commitment to supporting Africa’s move toward climate resilience and low carbon development is expanding access to international climate change financing. The African Development Bank is implementing the Climate Investment Funds (CIF), a pair of funds designed to help developing countries pilot transformations in clean technology, sustainable management of forests, increased energy access through renewable energy, and climate-resilient development. The AfDB has been involved with the CIF since their inception in 2008.
The Bank is actively supporting African nations and regions as they develop CIF investment plans and then channeling CIF funds, as well as its own co-financing, to turn those plans into action. One of the Climate Investment Funds, the Clean Technology Fund (CTF) provides developing countries with positive incentives to scale up the demonstration, deployment, and transfer of technologies with a high potential for long-term greenhouse gas (GHG) emissions savings.
In the Middle East and North Africa region, US$750 million in CTF funding is supporting deployment of 1GW of solar power generation capacity, reducing about 1.7 million tons of CO2 per year from the energy sectors of Algeria, Egypt, Jordan, Morocco and Tunisia. In Morocco, US$197 million in CTF funding is cofinancing the world’s largest concentrated solar power initiative. Another US$125 million is helping scale up investments in its wind energy program targeting 2GW by 2020.