Nigeria is among five other African countries that will benefit from the African Development Bank Group (AfDB) Leveraging Energy Access Finance Framework (LEAF), programme, which the Bank has pledged to promote with up to $164 million.
Other African countries that will draw from the programme, which overall cost is estimated at $800 million are Ghana, Guinea, Ethiopia, Kenya, and Tunisia.
The AfDB said the programme will help spur commercial and local currency investments to scale up the activities of decentralised renewable energy companies in the six African countries.
According to the AfDB, “under LEAF, some 18 decentralised renewable energy projects are expected to be financed, providing access to six million people and businesses, resulting in 28.8 million tonnes CO2 eq. in greenhouse gas emission reductions over the lifetime of the systems.”
It added that many African countries still face challenges in achieving universal access to sustainable, clean, affordable and reliable electricity.
According to the latest Sustainable Development Goal (SDG) 7 tracking report, close to 600 million Africans lack access to electricity.
“As a result of the Covid-19 crisis, the number of people without access to electricity increased again for the first time in recent years,” said the AfDB.
The Bank noted that scaling up decentralised renewable energy (solar home systems, green mini-grids, and solar solutions for commercial and industrial use) is crucial to achieving the SDG7 objectives and requires significant private sector and local currency financing.
“The Board of Directors of the African Development Bank Group has approved the Leveraging Energy Access Finance Framework (LEAF), under which the Bank will commit up to $164 million to promote decentralized renewable energy in six African countries.
“The $800 million programme will help spur commercial and local currency investments to scale up the activities of decentralized renewable energy companies in Ghana, Guinea, Ethiopia, Kenya, Nigeria, and Tunisia”, the AfDB stated.
The AfDB developed the LEAF programme, in collaboration with the Green Climate Fund, which approved $170.9 million in concessional financing for it in July 2021.
The framework forms part of the Bank’s broader off-grid strategy under the New Deal on Energy for Africa and complements existing initiatives, such as the Sustainable Energy Fund for Africa.
The Bank’s Vice President in charge of Power, Energy, Climate Change and Green Growth, Dr Kevin Kariuki, remarked: “The African Development Bank is delighted to partner with the Green Climate Fund on the Leveraging Energy Access Finance Framework, which will not only accelerate access to electricity based on decentralised renewable energy solutions, hence reducing the respective countries’ carbon footprints, but will do so with the active participation of a private sector facilitated by local currency financing and commercial capital availed under the programme.”
The AfDB pointed out that over six years, LEAF will deploy concessional finance, credit enhancement instruments and technical assistance to crowd-in private sector investors, including local banks, to finance and accelerate efforts to power the continent.
The Bank’s Acting Director in charge of Renewable Energy and Energy Efficiency Department, Dr Daniel Schroth, added: “The approval of this programme is very timely as it increases the Bank’s toolbox to support the fast-moving decentralized energy access market which complements conventional grid-connected solutions.”
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