The African Development Bank’s board of directors on December 14 approved $15m from the Sustainable Energy Fund for Africa and $10m from the Clean Technology Fund to advance African Renewable Energy Fund II’s projects to boost low-carbon energy generation in sub-Saharan Africa.
SEFA’s contribution will comprise a package of $10m in equity and a $5m reimbursable grant. CTF, part of the Climate Investment Funds, will provide $10 million in equity. The combined contribution of $20m from SEFA and CTF will go to capitalise AREF II’s catalytic tranche.
The reimbursable grant is earmarked for AREF II’s project support facility.
The CTF contribution was approved by the CTF Trust Fund Committee in July 2020 under its Dedicated Private Sector Programme.
The financing will help small and medium-sized producers to add more than 800 MW of hydropower, solar and wind power, and battery storage in countries across sub-Saharan Africa.
“We are very excited to support AREF II at a time when, due to competing financing needs, on account of the cost impacts of the pandemic and for post-COVID-19 recovery efforts, there is a real risk of under-investment in the African power sector, including in renewables,” said the bank’s Vice President for Power, Energy, Climate and Green Growth, Dr. Kevin Kariuki.
AfDB manages SEFA, a special fund, and is also a CTF implementing entity.
Capitalising the fund’s catalytic tranche is expected to attract critical private investment at a time of investment uncertainty and economic disruption owing to the ongoing COVID-19 pandemic and to ensure capital flows to support the delivery of sustainable power infrastructure to meet the region’s growing energy needs. AREF II Project Support Facility will work to bring projects to the required level of readiness and bankability.
“We are proud to be able to continue our company’s mission of bringing reliable renewable power to countries and communities in Africa to support economic and social development, while also meeting the needs of our investors,” said Berkeley Energy’s Chief Executive Officer, TC Kundi.
“The Berkeley Energy team is looking forward to working again with SEFA which has played an important role in launching AREF II,” he added.