The World Bank has sought to improve distributed renewable energy (DRE) and clean cooking private sector projects in select African countries by extending a facility of close to US$300mn to the Eastern and Southern African Trade and Development Bank (TDB)
Beneficiaries of this announcement – which follows TDB’s successful financing of innovative off-grid solar projects under a US$415mn World Bank Regional Infrastructure Financing facility (RIFF) in 2020 – will be from eligible countries of the World Bank’s International Development Association (IDA) that are TDB member states. It comes as part of the first wave of IDA’s US5$bn ‘Accelerating Sustainable and Clean Energy Access Transformation’ (ASCENT) programme which aims to provide access to electricity for up to 100 million people in Africa over the next seven years.
“With African energy demand projected to grow rapidly alongside growth in population and incomes, there is an acute need to boost the intermediation of financing, including of concessional finance which can be leveraged to crowd-in more private capital, and make a substantial difference towards greater access to sustainable and clean energy in Africa,” remarked Admassu Tadesse, TDB group president and managing director. “Together with several other strategic engagements with World Bank Group institutions, TDB Group is delighted to further elevate its partnership with the World Bank’s IDA through ASCENT which stands to bolster the efforts the group has been deploying towards a just energy transition, including by adding low-carbon energy capacity in its markets, thereby enhancing their energy security and sustainable growth, while reducing GHG emissions.”
Growing Africa's private sector
Loans under the facility will be provided to DRE and clean cooking companies through direct lending to private sector, co-financing or on-lending via financial intermediaries. Smaller loans will be extended to SMEs through TDB Group’s Trade and Development Fund (TDF) and performance-based catalytic grants will be made available to support companies entering new markets in order to pilot innovations grow the private sector. This will be accompanied by technical assistance, capacity building and the development and piloting of financial innovations with a focus on pipeline development, implementation tools and technologies, E&S aspects, climate resilience, gender, and innovative financing instruments.
Boutheina Guermazi, World Bank director for regional integration in Africa and the Middle East, commented, “Access to sustainable, reliable, and affordable energy is at the crux of Africa’s development and poverty reduction efforts. The World Bank is pleased to build on our strong partnership with TDB Group, and we look forward to leveraging our combined efforts to unlock even more sources of financing for a host of private sector actors through the new ASCENT Regional Energy Access Financing Platform.”
TDB has also received support for its green initiatives from the African Development Bank. Click here to find out more.
