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Water and Energy

AfDB affirms its support for Power Africa, with
a commitment of more than US $600 million

T

he African Development Bank (AfDB) is proud to
be an anchor partner of Power Africa, a five-year
United States of America Presidential initiative aimed
at supporting economic growth and development by
doubling access to power in Sub-Saharan Africa. In fact,
the Bank’s work with the US Government on African
development issues spans four decades. The AfDB’s
contributions to Power Africa run broad and deep,
including contributions to the initiative’s focus countries
in the form of investments, support for policy reforms,
advisory services and guarantees.
Last year alone, this support included the conversion
of the Sustainable Energy Fund for Africa (SEFA) into
a multi-donor trust fund; providing US $64.5 million
for the Africa Renewable Energy Fund (AREF); issuing
a loan of EUR 115 million for the 300 MW Turkana
Wind Power Project in Kenya, along with a partial risk
guarantee (PRG) of EUR 20 million; issuing a PRG
Program of US $184 million along with a concessional
loan of US $3 million to support Nigeria’s power sector
privatization program; providing EUR 145 million for the
Côte d’Ivoire–Liberia–Sierra Leone–Guinea Electricity
Interconnection; and making US $58 million available for
Tanzania’s Governance and Economic Competitiveness
Programme.
AfDB’s work associated with the Power Africa focus
countries in 2013
Between January and December 2013, the Bank approved
several landmark operations associated with Power Africa
countries for a total of approximately US $670 million.
With SEFA – a bilateral trust fund established with
funding from the Government of Denmark – the Bank
led its coversion into a multi-donor trust fund with a
wider remit. As part of the conversion, the United States
Agency for International Development (USAID) will
become the second anchor donor and make a contribution
under the Power Africa Initiative. The conversion also
opens the door for other donors interested in promoting
private-sector led investments in small and medium-sized
sustainable energy projects. Additionally, the Bank’s Board
endorsed a new financing window to support related
enabling environment activities.
In April 2013, the Côte d’Ivoire–Liberia–Sierra Leone–
Guinea Electricity Interconnection received EUR 145
million of AfDB financing for the construction of about
1,400-kilometres of high-voltage transmission lines to
connect the national networks of the four countries.
The project is critical for reconstruction efforts currently
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Africa Water, Sanitation & Hygiene • March - April 2014

underway in post-conflict Liberia and Sierra Leone and in
the forest region of Guinea. Connecting these countries
with Côte d’Ivoire would allow mutually beneficial power
exchange and the reliable electricity supply necessary for
economic growth and peace. The project will directly
benefit 24 million people.
The Bank provided a loan of EUR 115 million for the 300
MW Turkana Wind Power Project in Kenya and a partial
risk guarantee of EUR 20 million to mitigate the risk of
a delay in constructing the 428-kilometre publicly owned
transmission line and associated substations needed to
connect the project to the national grid. The AfDB played
a lead role in developing this independent power producer
project, having worked with the project developer since
2009. The Bank was also the Mandated Lead Arranger
for the transaction. The project is the largest wind power
project in Africa and is expected to increase Kenya’s
installed capacity by approximately 17% and contribute to
the development of the project area.
The Africa Renewable Energy Fund (AREF) private
equity fund benefitted from US $64.5 million from the
Bank in November. The funding will be invested in small
to medium-sized renewable energy projects in SubSaharan Africa (excluding South Africa). The Bank led
the Fund’s development, including the structuring of the
Fund and the selection of the Fund manager. AfDB and
SEFA are co-sponsors and anchor investors providing
US $25 million in equity each; SEFA will provide an
additional US $10 million for AREF’s Project Support
Facility to prepare and structure bankable projects. AREF
will be headquartered in Nairobi and its priority countries
include Kenya, Tanzania and Ghana. The Global
Environment Facility (GEF) will invest US $4.5 million in
equity in AREF from an AfDB-managed public-private
partnership platform program.
Just before the end of the year, the AfDB also succeeded
in establishing a Partial Risk Guarantee (PRG) Program