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AfDB secures fresh $90M for sustainable energy

Chibuzo Nwaneri

The African Development Bank (AfDB), said it has secured additional $90 million to boost its Sustainable Energy Fund for Africa (SEFA) programme.

The AfDB-managed SEFA, which was founded in 2011, transformed into a Special Fund on 31 October 2019, focuses on green baseload, green mini-grid, and energy efficiency investments, reported a record number of transactions in 2020.

The Fund approved seven high-impact projects worth $54 million in 2020, described as its best year despite the Covid-19 challenges, AfDB said in its 2020 Annual Report.

The report, titled: Building Foundations for Success, said SEFA secured commitments worth $90 million from existing and new donors in the year, including from the German Ministry for Development Cooperation and the Nordic Development Fund, both of which joined SEFA in 2020. It also details the Fund’s success in attracting increased donor funding.

A statement on the Bank’s website indicated that the report covers four key areas: strategic priorities and instruments; key achievements in 2020; providing an overview of SEFA’s legacy (2012-2019) portfolio; and looking ahead to SEFA’s key priorities for 2021 and beyond to transform SEFA into the leading catalytic finance facility in the sustainable energy space for the African continent.

The statement quoted the Vice President, AfDB Power, Energy, Climate & Green Growth Complex, Dr. Kevin Kariuki, as saying: “SEFA’s potential was duly recognized, with the year culminating in a strong endorsement by the Fund’s donors.”

He said the additional resources will enable SEFA to establish itself as the leading proponent of Africa’s energy transition and energy access agendas in line with the Bank’s New Deal for Energy in Africa.

The Fund responded swiftly to the onset of the pandemic by launching its COVID-19 Off-Grid Recovery Platform to extend recovery capital to energy access businesses.

Other highlights include the provision of catalytic investments in the Spark+ Clean Cooking Fund, the first Africa-focused investment fund to support the clean cooking sector, as well as the Africa Renewable Energy Fund II, a private equity initiative to develop and invest in baseload renewable energy solutions involving hybrid renewable energy projects as well as battery storage.

Similarly, the Bank’s acting Director for Renewable Energy and Energy Efficiency, Dr. Daniel Schroth, said: “SEFA’s role in supporting innovative solar initiatives in the decentralized renewable energy space led to the African Development Bank receiving the Development Finance Institution of the Year award by the Africa Solar Industry Association in 2020. SEFA is working on an exciting pipeline of new opportunities across all three focus areas for 2021 and beyond.”

SEFA’s role in supporting innovative solar initiatives in the decentralized renewable energy space led to the African Development Bank receiving the Development Finance Institution of the Year award by the Africa Solar Industry Association in 2020.

Indeed, access to energy is seen as essential for the reduction of poverty and promotion of economic growth globally, and Africa in particular.

As such, the applications of renewable energy technology are said to have the potential to alleviate many of the problems that face Africans every day, especially if done in a sustainable manner that prioritizes human rights.

Specifically, the International Renewable Energy Agency (IRENA), reiterated that Africa’s rapid economic expansion creates a daunting energy challenge, combined with rising expectations of improved resilience and sustainability.

Therefore, finding a sustainable way to meet growing energy needs, it said, is one of the core development challenges for the continent. “Africa is rich in renewable energy sources, including hydro, sun, wind and others, and the time is right for sound planning to ensure the right energy mix. Decisions made today will shape the continent’s energy sector for decades,” the United Nations agency said.

Stressing the need to scale up renewable energy deployment in Africa in the pursuit of its energy transformation, it noted that renewables are an increasingly favoured option in the continent not just because of environmental concerns but also, increasingly, they are an economical option.

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