The African Development Bank, through its public and private sector departments, is currently implementing several clean energy projects and programs to address these priorities particularly in the energy and forestry sectors. The Bank’s energy portfolio currently stands at about USD2 billion. The AfDB provides two lending windows. The first is a public window, with mostly concessional funds available to governments. The second is a private window, which offers debt and equity on commercial terms.
The World Bank Group and the African Development Bank are in the process of applying to the Clean Technology Fund (CTF) Trust Fund Committee for use of $750 million of concessional funds for the MENA CSP Scale-up. For example, over the first half of 2012, AfDB approved USD800 million in loans to spur private investments in Morocco’s renewable energy sector. The Sustainable Energy Fund for Africa (SEFA), financially supported by Denmark, aims to support the implementation of AfDB’s strategy to provide grants and equity to small-scale renewable energy and energy efficiency project.
The World Bank Group and the African Development Bank, in collaboration with other donors, are launching an initiative to scale-up Concentrated Solar Power (CSP) up to 1GW over 6-8 years by means of around ten large projects in Africa. Hydroelectric power generation represent an attractive investment opportunity for AfDB as Africa has tremendous hydropower generation potential, 60% of which is locked within Guinea, Ethiopia and the Democratic Republic of Congo. The AfDB has committed its support to developing the Gibe III hydroelectric dam, in Ethiopia. Wind farms are another lucrative investment arena for AfDB, as shown by AfDB’s commitment for 300MW Lake Turkana Wind Farm in Kenya.
Evolution One Fund
In 2009, the African Development Bank has approved a Rand100 million investment in Evolution One Fund, the first specialized private equity fund focused on the acceleration and deployment of clean energy and sustainable technologies across southern Africa. The 10-year private equity fund, managed by Cape Town-based Inspired Evolution Investment Management, will seek to invest predominantly in growth-phase businesses, particularly in eight high-growth sectors, namely clean energy/energy efficiency (up to 50% of its investments), efficient and clean manufacturing processes and technologies, air quality and emissions control. South Africa will account for 60-75% of the fund’s overall investments, while up to 25-40% will be earmarked for other Southern African Development Community countries.
Ain Beni Mathar Solar Project
The Ain Beni Mathar Integrated Solar Thermal Combined Cycle Power Station is the Bank’s first experience in solar power. It is working in partnership with the Global Environment Facility and Morocco’s National Electric Authority. The African Development Bank is financing approximately two-thirds of the cost of the plant, or about 187.85 million Euros. The plant combines solar power and thermal power, and is expected to reach production capacity of 250MW soon.
Lake Turkana Wind Project
Lake Turkana Wind Power (LWTP) consortium is constructing a wind farm consisting of 353 wind turbines, each with a capacity of 850 kW, in Northwest Kenya near Lake Turkana. The wind power project has full production of 300 MW. LTWP can provide reliable and continuous clean power to satisfy up to about 30% of Kenya’s current total installed power. The AfDB Group is facilitating the entire project cost of US$405 million, out of which, the institution intends to provide US$135 million. The AfDB has also agreed to invest US$19 million in a wind power project in the Republic of Cape Verde, off the western coast of Africa. This total cost of the project, consisting of four wind farms with more than 120 wind turbines, is US$84 million.