Development finance institution the African Development Bank (AfDB) has approved the Leveraging Energy Access Finance (LEAF) framework, under which it will commit up to $164-million to promote decentralised renewable energy in six African countries.
“The $800-million programme will help spur commercial and local currency investments to scale up the activities of decentralised renewable energy companies in Ghana, Guinea, Ethiopia, Kenya, Nigeria and Tunisia.
“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 tons of carbon dioxide-equivalent in greenhouse gas emission reductions over the lifetime of the systems,” the AfDB says.
Scaling up decentralised renewable energy, such as solar home systems, green mini-grids and solar solutions for commercial and industrial use, is crucial to achieving the United Nations Sustainable Development Goal 7 objectives and requires significant private sector and local currency financing, the group says.
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.
“Many African countries still face challenges in achieving universal access to sustainable, clean, affordable and reliable electricity. According to the latest United Nations 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,” the AfDB says.
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 AfDB is delighted to partner with the Green Climate Fund on the LEAF 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,” says AfDB power, energy, climate change and green growth VP Dr Kevin Kariuki.
“The approval of this programme is very timely as it increases the Bank’s toolbox to support the fast-moving decentralised energy access market which complements conventional grid-connected solutions,” adds AfDB Renewable Energy and Energy Efficiency Department acting director Dr Daniel Schroth.