AfDB to create vice-presidency on energy to oversee $12bn portfolio             

The Executive Boards of the African Development Bank Group (AfDB) today took a significant step towards Africa’s economic transformation by announcing the approval of the Bank Group’s “Strategy for the New Deal on Energy for Africa (2016–2025),” which it said was approved on Wednesday, May 18.

The AfDB has developed a significant energy sector portfolio in recent years with over 100 active projects, and the volume of the Bank’s energy sector approvals from 2006 to 2015 amounts to about $15 billion, with its entire energy sector portfolio standing at over $12 billion.

“The New Deal is coupled with internal reforms, following the previous approval by the Board of the new Business Delivery Model, which envisages the creation of a Vice Presidency for Power, Energy, Climate, and Green Growth, making the AfDB the only Multilateral Development Bank to do so,” the bank said in a statement posted Monday on its website.

It also aims to spur the transformation of Africa’s energy sector, promoting inclusive growth and the transition to green growth by increasing energy production, scaling-up energy access, improving affordability, reliability and energy efficiency as well as the sustainability of energy systems.

The New Deal on Energy for Africa is built on five inter-related and mutually reinforcing principles: raising aspirations to solve Africa’s energy challenges, establishing a Transformative Partnership on Energy for Africa, mobilising domestic and international capital for innovative financing in Africa’s energy sector, supporting African governments in strengthening energy policy, regulation and sector governance, and increasing the African Development Bank’s investments in energy and climate financing.

With over 645 million people in Africa without access to electricity and some 730 million reliant on biomass for cooking, the New Deal proposes to be a game changer for the continent’s energy sector.

To tackle this deficit, the New Deal intends to focus on seven themes that are holding back the development of the energy sector.

The themes include setting up the right enabling policy environment, enabling utility companies for success, dramatically increasing the number of bankable energy projects, and increasing the funding pool to deliver new projects.

Other themes are supporting “bottom of the pyramid” energy access programmes, accelerating major regional projects and driving integration, as well as rolling out waves of country-wide energy transformations.

The AfDB says it intends to address these themes through a series of flagship programmes such as Independent Power Producers (IPP) procurement, renewable energy, energy efficiency, power utility transformation, early stage project support facility, bottom of the pyramid energy financing, regional project acceleration, energy efficiency, country wide energy sector turnarounds and transformative partnerships.

Meanwhile, Babatunde Fashola, the minister of power, works and housing on Monday disclosed that the government had recent multiple proposals from investors who want to do solar and other forms of renewable energy projects. saying also that he had held meetings a week earlier with about 20 solar energy developers with keen interest in making investments in Nigeria.

Nigeria is said to experience 485.1 million megawatt-hour per day of naturally occurring solar energy, with an average of 6.2 hours of daily sunshine, yet an estimated 60 percent of its 180 million people is without access to electricity.

“This constitutes a big market with a promise of very rewarding returns on investment which, in itself, is an investment incentive,” Fashola assured.

With over-reliance on current trends, two-thirds of the world’s population will remain without electricity by 2030, which is the target year to achieve the newly agreed post-2015 UN Sustainable Development Goal of universal access to energy, said a report released Tuesday, May 24 by PricewaterhouseCoopers (PwC).

According to John Gibbs, Africa deals power and utility lead for PwC, “for the millions of people who don’t currently have access to electricity, the old assumption that they will have to wait for grid extensions is being turned on its head by new technological possibilities, and faster progress is needed in embracing the new starting points for energy provided by standalone renewable technology solutions and mini-grids.”