In a bid to improve the power sector in Africa, the board of directors of the African Development Bank (AfDB) has approved an equity investment of around 25 million USD in the ARCH Africa Renewable Power Fund (ARPF). The ARPF, which is a 250 million USD private equity fund for renewable energy project across sub-Saharan Africa, will provide the fund for construction of over 10 greenfield renewable energy project focusing on wind, solar, small and medium hydro, geothermal and biomass power generation technologies.
This project will add approximately 533MW of installed energy generation capacity from renewable sources in the region. Power problems have been a reason for underdevelopment in Africa as the electricity supply in the continent needs to be expanded rapidly and reliability improved.
The problem of power in Africa cannot be overemphasized, hence, AfDB expects that its own involvement would attract further investment of over 65 million USD in total from other parties. 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 the 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.