AfDB Approves $25 Mn Fund For Renewable Energy Projects in Africa

AfDB Approves $25 Mn Fund For Renewable Energy Projects in Africa

The Fund’s strategy is to prioritize projects with a clear timeline to financial close, with emphasis on de-risking early stage greenfield projects.

AfDB $25 Million Fund

The African Development Bank Group (AfDB) has approved an equity investment of up to $25 million in ARCH Africa Renewable Power Fund (ARPF), a US$ 250 million private equity fund for renewable energy projects across Sub-Saharan Africa.

ARPF will provide equity for the development and construction of 10 to 15 greenfield renewable energy projects in Sub-Saharan Africa, adding approximately 533MW of installed energy generation capacity from renewable sources in the region. This will provide both base load and peak load power in underserved markets.

ARPF projects will focus on mature technologies including wind, solar PV, small to medium hydro, geothermal and biomass. These would include grid-connected independent power producers (“IPPs”), and decentralised energy projects (commercial & industrial solar, mini-grids, and solar home systems companies).

The Fund’s strategy is to prioritize projects with a clear timeline to financial close, with emphasis on de-risking early stage greenfield projects.  

AfDB’s presence is expected to act as a catalyst for other investors to commit a further $60-75 million equity from non-DFI sources. The Bank would also ensure that the highest environmental and social standards, together with climate change and gender considerations, are applied to the ARPF’s projects.

“Energy investments in Africa are constrained by limited well-structured, bankable projects, as well as by unavailability of risk capital. Renewable technologies require additional support to be fully competitive over fossil fuel-based energy generation,” said Amadou Hott, the Bank’s Vice-President for Power, Energy, Climate Change & Green Growth.

“ARPF will expand the pipeline of bankable energy projects in Africa, and complement and deepen the work of the Bank in this critical area. This is vital for economic growth, and to foster a transition to low carbon across the continent,” Hott added.

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Ayush Verma

Ayush is a staff writer at saurenergy.com and writes on renewable energy with a special focus on solar and wind. Prior to this, as an engineering graduate trying to find his niche in the energy journalism segment, he worked as a correspondent for iamrenew.com.

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