THE African Development Bank (AfDB) says one of the two donors within the Climate Investment Fund has approved US$20 million to promoting small-scale renewable energy projects across the continent.
In a statement, AfDB said Clean Technology Fund (CTF), one of the two multi-donor trust funds within the Climate Investment Fund recently approved US$20 million for the Facility for Energy Inclusion (FEI).
“The CTF on August 8, 2019 approved US$20 million for the Facility for Energy Inclusion (FEI), to provide sustainable financing for small-scale renewables in Africa,” said the regional financier, which was sponsoring the energy inclusion facility.
FEI is a $500 million financing platform whose objective is to catalyse financial support for innovative energy access solutions.
FEI On-grid, a targeted US$400 million fund, supports improved energy access through the development of small-scale renewable energy generation and mini-grids across Africa, while the Off-Grid Energy Access Fund (OGEF), a targeted US$100 million fund, supports off-grid energy distribution companies and boosts their long-term capacity to access capital markets at scale.
It is hoped that the FEI initiative would provide an opportunity for independent power producers in Zimbabwe whose solar mini projects for long have failed to take off due to funding constraints.
As a result of the projects’ lack of implementation, the Ministry of Energy and Power Development recently threatened to revoke their licences.
Due to lack of investment in new power generation plants by the Government over the years coupled with the adverse effects of climatic change, Zimbabwe is experiencing acute power shortages.
The country’s major power plant, Kariba Hydropower Station was generating less than 200 megawatts against an installed capacity of 1 050MW due to low dam levels.
The Zimbabwe Power Company (ZPC) has indicated its intention to decommission Kariba Hydro next month should dam levels dwindle to less than 475 metres.
Recently, ZPC indicated that water levels at Kariba were at 478 metres.
Meanwhile, AfDB said the CTF investment composed of a US$4 million junior equity tranche and a $16 million senior concessional loan will be drawn from the Dedicated Private Sector Programme III, which was designed to provide risk-appropriate capital to finance high-impact, large-scale private sector projects in clean technologies.
Stressing the difficulty rural areas have in attracting investment for affordable and productive electricity, AfDB Climate Change and Green Growth director Mr Anthony Nyong said the funds would contribute to economic and social growth and enhance its recipients’ resilience to the effects of negative climate change.
“Access to affordable and reliable energy has huge benefits at various levels of any society. Most of the 600 million people estimated to lack access to modern energy services in Sub-Saharan Africa are also among the most vulnerable to the disastrous consequences of climate change,” he was quoted as saying.
FEI is expected to contribute to the installation of around 600MW of renewable energy projects across different African countries and avoid over 30 million tonnes of carbon dioxide equivalent of greenhouse gas emissions over a period of 20 years while yielding positive gender and social outcomes. — –herald.co.zw