Morocco - The African Development Bank (AfDB) has approved US$324 million in loan support to two renewable energy projects in Morocco and Côte d’Ivoire that are expected to significantly increase power supplies and keep economic growth on track. This is in line with the bank’s New Deal on Energy for Africa policy framework launched in 2016.
The bank has identified five priority areas for investment and development and named them the High 5. Sitting on top of the priority list is Light up and Power Africa which seeks to scale up investments in energy in a continent where more than 600 million people do not have access to electricity.
The New Deal on Energy for Africa is a partnership-driven effort with the aspirational goal of achieving universal access to energy in Africa by 2025.
AfDB has committed US$265 million to help develop two solar power plants in Morocco. The NOORM I and NOORM II solar power plants with a total cost of €2.048 billion a combined capacity of 800 MW will be developed under a public-private partnership (PPP). The solar plants will be connected to the national grid, and will guarantee electricity supplies to more than 2 million Moroccans (approximately 6% of the country’s population) and significantly reduce CO2 emissions.
The investment is part of the Bank’s continued support to Morocco’s US$ 3 billion NOOR solar energy program.
AfDB’s loan support is also helping Côte d’Ivoire with its Singrobo-Ahouaty project which involves the design, construction and operation of a 44-MW hydropower plant on the Bandama River. The country’s dynamic economy is exerting pressure on power supply, with demand projected to grow by 8-9% annually. To meet rising domestic and regional demand, Côte d’Ivoire intends to significantly raise its generation capacity, including hydropower.
The approval of both projects underscores the AfDB’s focus on renewable energy in Africa. This year (2017) alone the Bank’s investments will contribute to 1.4 GW of additional generation capacity exclusively from renewable energy sources.
“These approvals demonstrate once again the Bank’s leadership on renewable energy in Africa,” AfDB’s President, Akinwumi Adesina stated. “These projects will be essential to achieving the countries’ Nationally Determined Contributions (NDCs) under the Paris Agreement. I believe this sends a strong message ahead of the One Planet Summit on Climate next week in Paris”.
In addition to utility-scale renewable energy generations projects, the AfDB’s interventions in 2017 covered all facets of renewable energy.
The bank helped boost off-grid and mini-grid projects with the approval of the second phase of the Green Mini-Grid Market Development Program to address barriers to scaling-up of private sector mini-grids in Africa and the launch of the Off-grid Revolution by mobilizing funding, pushing for regulatory reform, achieving economies of scale, addressing currency risks and convening governments to provide incentives for off-grid.
AfDB also supported transmission and distribution projects including crucial regional interconnectors that are critical to evacuate power generated from renewable energy.
The bank approved a US$100 million anchor investment to close funding gaps in the small-scale energy infrastructure sector and catalyse growth in last-mile energy access solutions as a way of directing investments in private equity and debt funds, such as the Facility for Energy Inclusion (FEI).
2017 also saw AfDB availing project preparation support notably through the its Sustainable Energy Fund for Africa (SEFA), which has approved 12 projects that aim to bring additional 166 MW and leverage US$ 340 million.
AfDB’s energy agenda continues to attract international support.
In October 2017, the Bank’s first “Light Up and Power Africa” theme Bond for SEK733 million (approximately JPY 10 billion) was issued and sold to Dai-ichi Life Insurance Company Limited, the sole investor in the transaction. The bond supports the bank’s ambition of bridging the continent’s energy deficit.