AFRICA – The African Development Bank Group (AfDB) has approved an equity investment worth US$25 million in ARCH Africa Renewable Power Fund (ARPF) to support renewable energy projects across Africa.
The investment from AfDB comes as part of a US$250 million private equity fund that seeks to support the initiative.
ARPF will subsequently provide equity for the development and construction of 10 to 15 Greenfield renewable energy projects in Sub-Saharan Africa, reports Digest Africa.
This will boost the current installed energy generation capacity in the continent which stands at about 533 Mega Watts (MW) providing both base load and peak load power in underserved markets.
Amadou Hott, the Bank’s Vice-President for Power, Energy, Climate Change & Green Growth, said that the investment is aimed at promoting sustainable energy sourcing across the continent.
“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.
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,” said Hott.
The green energy projects to be financed by ARPF will focus on mature technologies centred on Solar Power harnessing, medium hydro, geothermal and biomass.
These will also include grid-connected independent power producers (“IPPs”), and decentralized energy projects (commercial & industrial solar, mini-grids and solar home systems companies).
According to ARPF, priority will be given to projects with a well-established and clear timeline to financial close with great considerations on de-risking early stage greenfield projects.
The projects will also boost state governments’ renewable energy objectives as the fund is expected to reach first close in early 2019.
In addition to the contribution to renewable energy,
ARPF is a private equity fund for renewable energy projects across Sub-Saharan Africa with its anchor investing entity as ARCH Emerging Markets Partners Ltd, a London-based emerging-market investment joint venture.