AfDB approves US$25mn grant for renewable energy projects

renew 23jThe African Development Bank (AfDB) has approved an equity investment of up to US$25mn in ARCH Africa Renewable Power Fund (ARPF), a US$250mn 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.

The bank’s presence is expected to act as a catalyst for other investors to commit a further US$60-75mn 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, vice-president for power, energy, climate change and green growth. at AfDB.

The project is in line with the bank’s Ten-Year Strategy and High-Five priorities, specifically the New Deal on Energy for Africa, which aims to achieve universal access by 2025. ARPF will also assist governments in meeting their renewable energy objectives through on-and off-grid renewable energy technologies.

In addition to the contribution to renewable energy, the project construction and operation will result in the direct creation of at least 272 full-time jobs and 5,320 part-time jobs.

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