AfDB sets aside Sh2.5b to finance green energy

Kenyans innovating around the energy sector are poised to benefit from a Sh2.52 billion African Development Bank (AfDB) fund for renewable energy projects across Africa.

The approval by the board of directors comes just a month after the bank announced plans to raise over Sh700 billion from capital markets to finance development projects in member countries.

Through its Africa Renewable Power Fund (ARPF), a $250 million (Sh25 billion) private equity fund, AfDB will provide finance for the development of 10 to 15 greenfield renewable energy projects in Sub-Saharan Africa with the capacity to add at least 533 megawatts of installed energy generation capacity from renewable sources.

The bank said this will provide enough power for governments to serve citizens in under-served regions.

“ARPF will focus on ready-to-invest technology projects in wind, solar, small to medium hydro, geothermal and biomass,” said AfDB in a statement.

It said projects are welcome from grid-connected independent power producers (IPPs), and decentralised energy projects in commercial and industrial solar, mini-grids and solar home systems companies.

“The fund’s strategy is to prioritise projects with a clear timeline to financial close, with emphasis on de-risking early stage greenfield projects,” added the bank.  

Further, the AfDB initiative is expected to act as a catalyst for other investors to commit a further $60-75 million in equity into ARPF’s projects.

“Energy investments in Africa are constrained by limited well-structured, bankable projects, as well as by unavailability of risk capital,” said Amadou Hott, AfDB vice-president for Energy, Climate Change and Green Growth.

He said ARPF will complement and deepen the bank’s work to foster economic growth while transitioning to low carbon across the continent.