The African Development Bank (AfDB) has confirmed its approval for the construction of 533-MW of renewable power plants across Sub Sahara Africa.
The new push to Light Up Africa with new renewable power plants is expected to reach financial close early in 2019, according to the AfDB, which is contributing US$25 million as equity to support investor interest.The AfDB said that the Africa Renewable Power Fund (ARPF), a US$250 million private equity fund set up for renewable power projects in Africa, will complete the process of securing additional investors.
“The ARPF will provide equity for the development and construction of 10 to15 Greenfield renewable energy projects in the Sub continent,” the AfDB said. This will provide both base load and peak load power in underserved markets.
“The power projects will focus on mature technologies including wind, solar, small and medium hydro, biomass and geothermal,” the bank continued.
The fund's strategy is to prioritise projects with clear timeline to financial close, with emphasis on derisking early stage greenfield projects'
The bank’s presence is expected to act as a catalyst for other investors to commit and additional US$60-75 million in equity from non DFI sources.
On potential recipient country is Nigeria, where the Power Minister has a list of 20 small hydro projects that need investors. These include: 27 MW at Tella; 11 MW at Kila; 16 MW at Gongola; 1.9 MW at Otukpo; 20 MW at Keranti and 11 MW at Bali.
“Energy investments in Africa are constrained by limited well structured, bankable projects as well as non availability of risk capital. Renewable technologies require additional support to be fully competitive over fossil based energy generation" said Amadou Ott,
AFDB Vice President for Power, energy, Climate Change and Green Growth.
“The 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 transition to low carbon across the continent,” Hott added.
Africa plans to attain universal access to electricity by year 2025, with renewed focus on renewable energy.