The African Development Bank promised in 2015 to “light up and power Africa” as part of its New Deal on Energy for Africa. Now, three years on, it’s clear that the bank must do more — and quickly — to support the fastest and most affordable means of delivering energy access to the people: distributed renewable energy.
That’s the message delivered this month by more than 50 civil society organizations, representing groups from across Africa and around the world, as AfDB kicks off its first-ever Africa Investment Forum in South Africa, looking to scale up infrastructure investment across the continent.
The letter was released at the same time as a new analysis of AfDB’s energy finance, which shows that although AfDB’s track record on supporting energy access has improved since 2015, progress must be turbocharged if the bank is to meet its own ambitious commitments.
The new analysis assesses nearly 100 AfDB energy transactions from 2014 through 2017. The analysis finds that while AfDB’s approvals for projects targeting energy access increased dramatically in 2017, the share of approved financing for distributed renewable energy — off-grid and minigrid solutions — remains low, at less than 2 percent of AfDB’s energy finance in 2014 and 2015, and 6.6 percent of AfDB’s energy finance in 2016 and 2017.
This translates to an average of just $46 million per year in support for off-grid and minigrid solutions from 2014 through 2017. In addition, AfDB support for clean cooking is minimal, at less than 1 percent of its energy finance.
If AfDB wants to do more to scale up energy access rapidly, its efforts should focus on scaling up distributed renewable energy. Last year, the International Energy Agency published an “Energy for All” scenario, which finds that for a least-cost pathway to universal electricity access in sub-Saharan Africa by 2030, two-thirds of additional electricity supply investment would be in off-grid and minigrid solutions.
And just last week, IEA released new data on energy access that found that, in sub-Saharan Africa, more people are without access to electricity and clean cooking today than five years ago.
“In sub-Saharan Africa, more people are without access to electricity and clean cooking today than five years ago.”—
If AfDB is serious about meetings its ambitious and laudable commitment to enable 75 million new off-grid connections and provide 150 million households with clean energy solutions for cooking, it must massively and deliberately scale up support in these areas.
The bank’s facility for energy inclusion, approved in 2016, focused on projects with total costs of less than $30 million — an example of the kind of solution the bank could scale up to reflect its energy access ambitions for the continent, using all the financial tools at AfDB’s disposal to support scaled-up finance for energy access through distributed renewables, including guarantees and other risk mitigation instruments.
Dramatically increasing resources for distributed renewable energy and clean cooking is not the only thing civil society groups are calling for: They also want more meaningful civil society participation in AfDB’s processes. One important avenue for that collaboration is the fledgling AfDB-CSOs committee, where the bank can demonstrate that it’s serious by ensuring meaningful opportunities for civil society groups to participate in the development country strategies — the documents that dictate AfDB’s engagement with its clients.
If AfDB rapidly scales up finance for distributed renewable energy, it can deliver on the goals of the New Deal on Energy for Africa and can help uplift the 600 million people in sub-Saharan Africa who lack access to electricity and the 890 million who lack access to modern energy for cooking. With adequate transparency and meaningful civil society engagement, the bank can ensure its energy access projects do the most to improve quality of life and lift people out of poverty.