With a sixth of the world’s population, Africa generates a measly four percent of the world’s electricity, three-quarters of which is used by South Africa and northern Africa. According to World Bank statistics, more than 500 million Africans (almost two-thirds of the total population) have no access to “modern energy.” Hydropower accounts for around 45% of electricity generation in sub-Saharan Africa (SSA) while biomass (mostly firewood) constitutes about 56 percent of all energy use in sub-Saharan Africa. Large-scale use of forest biomass is accelerating deforestation, and the World Bank estimates that 45,000 square kilometers of forest were lost between 1990 and 2005 across all low-income countries in Africa.
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 biomass 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.
Several African counties, such as South Africa, Egypt, Morocco, Kenya, Senegal, Madagascar, Rwanda and Mali have adopted national targets for renewable energy, and feed-in tariffs for renewable energy electricity have been introduced e.g. in South Africa and Kenya. Countries such as South Africa, Morocco, Egypt, Cape Verde, Ethiopia, Kenya and Tanzania are developing wind farms. Geothermal investments are increasing in the Rift Valley area of Eastern Africa. The pipeline of investments in Africa in hydropower, wind farms, solar PV and concentrated solar thermal, geothermal power and biomass energy underlines the huge potential for a future expansion of renewable energy across the continent.
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 USD 2 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.
Hydroelectric power generation represent an attractive investment in Africa because of 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. 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 is expected to reach full production of 300 MW by the end of 2012. LTWP can provide reliable and continuous clean power to satisfy up to about 30% of Kenya’s current total installed power.
The Ain Beni Mathar Integrated Solar Thermal Combined Cycle Power Station is one of the most promising solar power projects in Africa. The plant combines solar power and thermal power, and is expected to reach production capacity of 250MW by 2012. African Development Bank, in partnership with the Global Environment Facility and Morocco’s National Electric Authority, is financing approximately two-thirds of the cost of the plant, or about 200 million Euros.
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.