AfDB to invest $12bn in African energy sector

African Development Bank (AfDB) Group has again set an ambitious goal to help the continent achieve universal electricity access by 2025, with a strong focus on encouraging clean and renewable energy solutions.

To achieve this goal, it is estimated that needed investment in energy sector will range between $60 billion and $90 billion per year.

This will require providing 160giga watts (GW) of new energy capacity, 130 million new on-grid connections, 75 million new off-grid connections and providing 150 million households with access to clean cooking solutions.

In giving this plan a big leverage, the AfDB Group will be investing $12 billion of its own resources in the energy sector over the next five years; this is in addition to a leverage of about $50 billion.

Conservatively, over 640 million Africans have no access to energy, corresponding to an electricity access rate for African countries at just over 40 percent, the lowest in the world.

Per capita consumption of energy in sub-Saharan Africa (excluding South Africa) is 180 kilowatts per hour (kWh), compared with 13,000kWh per capita in the US and 6,500kWh in Europe.

“These annual meetings are not just about us who are here. They are also very much about the people who are not here. It is about the millions of our fellow Africans without electricity, or food, or jobs; the young people on whom Africa’s future depends.

“We will never transform Africa without transforming its energy supply. Energy is like the blood in the body. It has to flow – everywhere,” Akinwunmi Adesina, president, AfDB Group, said at the ongoing annual meetings of the AfDB Group holding in Lusaka, Zambia, with the theme “Energy and Climate Change.”

To light up and power Africa is among the High 5s priorities of the Group. The High 5s agenda – five priority actions for the AfDB and for Africa – is the AfDB’s channel for focusing and scaling up its 2013 -2022, 10-year strategy, to bring about the socio-economic transformation of Africa.

The bank launched a new deal on energy for Africa, which 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, and mobilising domestic and international capital for innovative financing in Africa’s energy sector.

While the bank will prioritise renewable energy, fossil fuels will remain an important part of the overall energy mix, as is the case with several developed economies, with the bank financing state-of- the-art technology to minimise emissions.

The African Development Fund (ADF) is a great instrument of hope. It makes concessional loans to poorer African countries. In over 40 years, it has granted and loaned over $40 billion in almost 40 countries. In 2016, it is going through its 14 replenishment.

The High 5s are designed to deliver the twin objectives of the 10-year strategy: inclusive growth that is shared by all, and the gradual transition to green growth.

“Nutrition is one of a set of key investments in human development that together are just as important as investments in infrastructure and power in bringing about economic growth. We are thrilled with AfDB… this leadership in giving greater priority to nutrition and the wider human capital investment agenda,” Jamie Cooper, chair of Big Win Philanthropy, said.

“Malnutrition remains a major barrier to development in many African nations, but we have consensus on what targets we need to reach, along with a roadmap for action. One way to achieve nutrition security is to transform the continent’s agriculture sector.  It’s not just about the amount of food we grow, it’s also about the type of food that we eat,” said Kofi Annan, chair, Kofi Annan Foundation.

“Urbanisation without transformation will mean moving the poor from poor areas to other poor areas. It would change the nature of poverty, but it wouldn’t address the issues,” said Mario Pezzini, director, Organisation for Economic Cooperation and Development Centre.

“For urbanisation to be successful and transform the lives of people, it has to be accompanied by serious planning by local government authorities, and the engagement of people. But people often get marginalised in the process, and we are now seeing development in cities characterised by the slums that result from lack of planning,” said Aisa Kirabo Kacyira, deputy executive director and assistant secretary-general, UN-Habitat.