The African Development Bank Group (AfDB) has approved $25m in equity investment in the ARCH Africa Renewable Power Fund (ARPF).
ARPF is a $250m private equity fund that aims to develop renewable energy projects across Sub-Saharan Africa.
The fund offers equity to develop and construct 10 to 15 greenfield renewable energy projects in the Sub-Saharan region. The projects are expected to result in the addition of about 533MW of energy generation capacity from renewable sources.
ARPF projects will focus on mature technologies such as wind, solar PV, small to medium hydro, geothermal and biomass. And, these would include grid-connected independent power producers (IPPs), and decentralized energy projects such as commercial & industrial solar, mini-grids and solar home systems companies.
AfDB says that its presence could act as a catalyst for other investors to commit $60m to $75m in equity from non-development finance institution (non-DFI) sources.
AfDB power, energy, climate change & green growth vice-president Amadou Hott said “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 transition to low carbon across the continent.”
Besides adding renewable energy, the projects are expected to create at least 272 full time jobs and 5,320 part time jobs during the construction and operation of the power projects.
In November, the Bank had approved $18.17m loan for the 40MW Kenyan solar project, Kopere Solar Power Project owned by Voltalia, an international player in the renewable energy sector. This project falls under Kenya’s Renewable Energy Feed-in-Tariff (FiT) policy and will be located in the Nandi County.
The project also involves the construction of a 33/132 kV substation, and a 1.8km T-line to evacuate the electricity to the national grid.