African Development Bank approves $25m for Africa Renewable Energy

African Development Bank approves $25m for Africa Renewable Energy


African Development Bank Group approves $25 million Equity Investment in Fund for Renewable Energy Projects in Africa

Abidjan, Côte d’Ivoire, January 22, 2018 – The Board of Directors of the African Development Bank Group has approved an equity investment of up to US$ 25 million in ARCH Africa Renewable Power Fund (ARPF), a US$ 250 million private equity fund for renewable energy projects across Sub-Saharan Africa.

ARPF will provide equity for the development and construction of 10 to 15 greenfield renewable energy projects in Sub-Saharan Africa, adding approximately 533MW of installed energy generation capacity from renewable sources in the region. This will provide both base load and peak load power in underserved markets.

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ARPF projects will focus on mature technologies including wind, solar PV, small to medium hydro, geothermal and biomass. These would include grid-connected independent power producers (“IPPs”), and decentralized energy projects (commercial & industrial solar, mini-grids and solar home systems companies). The Fund’s strategy is to prioritize projects with a clear timeline to financial close, with emphasis on de-risking early stage greenfield projects.

More support for renewable energy

More information on renewable energy

The Bank’s presence is expected to act as a catalyst for other investors to commit a further US$ 60-75 million equity from non-DFI sources. The Bank would also ensure that the highest environmental and social standards, together with climate change and gender considerations, are applied to the ARPF’s projects.

“Energy investments in Africa are constrained by limited well-structured, bankable projects, as well as by unavailability of risk capital. Renewable technologies require additional support to be fully competitive over fossil fuel-based energy generation,” said Amadou Hott, the Bank’s Vice-President for Power, Energy, Climate Change & Green Growth.

ARPF will expand the pipeline of bankable energy projects in Africa, and complement and deepen the work of the Bank in this critical area. This is vital for economic growth, and to foster transition to low carbon across the continent,” Hott added.

The Project is in line with the Bank’s Ten-Year Strategy and High-Five priorities, specifically the New Deal on Energy for Africa, which aims to achieve universal access by 2025. ARPF will also assist governments in meeting their renewable energy objectives through on-and off-grid renewable energy technologies. 

In addition to contribution to renewable energy, the project construction and operation will result in direct creation of at least 272 full time jobs and 5,320 part time jobs.

The Fund is expected to reach first close in early 2019. The ARPF anchor investing entity is ARCH Emerging Markets Partners Ltd, a London-based emerging market investment joint venture.

Contact:         Chawki Chahed, Chief Communications Officer, email: c.chahed@afdb.org

Technical contact: Namho Oh, email: n.oh@afdb.org

What is renewable energy

Renewable energy is energy produced from sources that do not deplete or can be replenished within a human’s life time. The most common examples include wind, solar, geothermal, biomass, and hydropower[1]. This is in contrast to non-renewable sources such as fossil fuels.

Most renewable energy is derived directly or indirectly from the sun. Sunlight can be captured directly using solar technologies. The sun’s heat drives  winds, whose energy is captured with turbines. Plants also rely on the sun to grow and their stored energy can be utilized for bioenergy[2]

Not all renewable energy sources rely on the sun. For example, geothermal energy utilizes the Earth’s internal heat, tidal energy relies on the gravitational pull of the moon, and hydropower relies on the flow of water.

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