The Board of Directors of the African Development Bank (AfDB) Group has approved an equity investment of up to $25m in ARCH Africa Renewable Power Fund, a $250m private equity fund for renewable energy projects in Nigeria and across Sub-Saharan Africa.
A statement made available to our correspondent in Abuja on Tuesday by AfDB said that ARPF would provide equity for the development and construction of 10 to 15 Greenfield renewable energy projects in Sub-Saharan Africa.
This is expected to add approximately 533MW of installed energy generation capacity from renewable sources in the region and provide both base load and peak load power in underserved markets.
ARPF projects will focus on mature technologies including wind, solar PV, small to medium hydro, geothermal and biomass.
These would include grid-connected independent power producers, and decentralised energy projects (commercial & industrial solar, mini-grids and solar home systems companies), the bank said, adding that the Fund’s strategy was to prioritise projects with a clear timeline to financial close, with emphasis on de-risking early stage Greenfield projects.
It said that the bank’s presence was expected to act as a catalyst for other investors to commit further $60-$75m equity from non-DFI sources.
The bank would also ensure that the highest environmental and social standards, together with climate change and gender considerations, were applied to the ARPF’s projects, it added.
“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,” said Amadou Hott, the Bank’s Vice-President for Power, Energy, Climate Change & Green Growth.