AfDB Approves LEAF Program to Increase Investment in Decentralized Renewable Energy
The bank will commit US$164 million to promote renewable energy projects.
The AfDB Board of Directors has approved the Leveraging Energy Access Finance Framework (LEAF) program. The bank will invest up to US$164 million to promote decentralized renewable energy in six African countries.
The LEAF framework will provide renewable energy solutions to help tide over the energy crisis. It will also reduce carbon dioxide emissions and provide the impetus needed to boost local economies and businesses.
Financial and investment barriers will also be cleared by deploying credit enhancement instruments and new financial products to get in local currency debt and commercial capital. The LEAF framework will further address adverse Covid-19 economic impacts which have limited national capacities to achieve renewable energy transition goals.
The US$800 million LEAF program will help stimulate commercial and local currency investments which will provide the impetus needed to upscale the activity of decentralized renewable energy companies in Ghana, Guinea, Ethiopia, Kenya, Nigeria, and Tunisia.
About eighteen renewable energy projects are ready for financing under the LEAF scheme and will direct access to six million people and businesses. This will result in a reduction of 28.8 million tonnes of CO2 equivalent emissions throughout the lifetime of the project.
Africa faces huge challenges in tackling the electricity crisis. The latest Sustainable Development Goal (SDG) 7 tracking report shows that at least 600 million Africans lack electricity access. The Covid pandemic has further aggravated this problem. To achieve the SDG7 objectives faster, more financing is needed for projects such as solar home systems, green mini grids, along with commercial and industrial solar solutions.
The African Development Bank will commit up to $164m, under the Leveraging Energy Access Finance Framework (LEAF), to promote decentralized #renewableenergy in six African countries: #Ghana, #Guinea, #Ethiopia, #Kenya, #Nigeria, and #Tunisia. #PowerAfrica https://t.co/dUJbTR6vAt pic.twitter.com/3Y2WKJE8qM— African Development Bank Group (@AfDB_Group) February 21, 2022
Over six years, LEAF will release concessional finance, credit enhancement instruments and technical assistance to attract private sector investors such as local banks. Dr Daniel Schroth, the Bank’s Acting Director in charge of the Renewable Energy and Energy Efficiency Department, said, “The approval of this program is very timely as it increases the Bank’s toolbox to support the fast-moving decentralized energy access market which complements conventional grid-connected solutions.”
Top Photo: Modern green city powered only by renewable energy sources concept (Adrian825 | Dreamstime)