The African Development Bank (AfDB) is set to fund the development of Africa’s electricity transmission and distribution infrastructure through its Sustainable Energy Fund for Africa (SEFA).
The $6.3 million technical assistance grant will go to funding the private sector through Public-Private Partnerships (PPPs) in their goal of developing sustainable electricity transmission and distribution (T&D) infrastructure.
“This project aligns perfectly with SEFA’s strategic framework, in particular in removing market hurdles and supporting new business models to accelerate energy access and drive a just energy transition across the continent”, SEFA said in a social media post.
The Bank’s SEFA said supporting African countries in developing bankable T&D projects aligns with its goal of promoting environmental sustainability and renewable energy integration.
“This grant will be instrumental in supporting project preparation and transaction advisory for T&D projects structured in PPP configurations, with the ultimate goal of mobilising at least $600 million in private-sector funding”, the post reads.
The funding will facilitate grid expansion and strengthening, as well as the construction of transmission lines. The goal is to bring electricity to more homes across the continent and facilitate electricity connectivity.
This initiative is part of AfDB’s Alliance on Green Infrastructure for Africa (AGIA) and contributes to the Mission 300 Initiative which the bank has said five more African nations have signed on to.
A similar project by the AfDB and run by SEFA is the $29.5 million financing package to construct a 62 megawatt (MW) solar photovoltaic power plant in Sokodé, Togo.
What the financing means for Africa’s electricity sector
The grant is poised to fund the modernisation of electricity grids in African nations and increase electricity connectivity.
Targeting the private sector, the grant will support public-private partnerships and create jobs and a sustainable business environment in Africa’s electricity industry.
“Without the private sector we will not create jobs. Our job is to enable the private sector invest responsibly and successfully, to create jobs”, Ajay Banga, President of the World Bank Group, said during a Mission 300 meeting in London last month.
The grant is set to enable African nations and private players unlock up to $600 million in the long run to finance the continent’s electricity needs.
