Africa’s Hydropower Fleet Get AfDB’s $1m Grant To Add 200mw
Hydropower stations in Africa have secured a $1 million grant from the African Development Bank’s Sustainable Energy Fund for Africa (SEFA) for the modernisation of the fleet to help increase the generation capacity by 200 megawatts at a low cost, with relatively short lead times and minimal environmental impact.
The grant that will fund the mapping and evaluation of African hydropower facilities’ rehabilitation needs, will also support the preparation of two pilot facilities to a bankable stage to improve generation capacity by 200MW, create 150 jobs and reduce greenhouse gas emissions by about 300 kilotons of CO2 annually.
The Bank’s Board of Governors in 2019 approved the conversion of the Bank-administered multi-donor trust fund SEFA into a “special fund”, to amplify its development impact by allowing it to access a wider range of financial instruments beyond the current scope of technical assistance.
Prior to the conversion, SEFA, the Sustainable Energy Fund for Africa, supports small and medium-scale renewable energy and energy-efficiency projects through early-stage interventions that enhance project bankability and access to private sector investments.
SEFA is expected to impact the energy sector in the continent where modern hydropower plays a key role in Africa’s energy transition, reducing reliance on fossil fuels and anchoring larger shares of variable renewable energy sources.
Daniel Schroth, acting director for renewable energy and energy efficiency at the African Development Bank, said it is under the transformative programme of SEFA’s Green Baseload component that specifically capitalises on the significant market opportunity for rehabilitation of Africa’s existing hydropower plants.”
The modernisation programme will be implemented in partnership with the International Hydropower Association, (IHA), which has participated in similar initiatives in Asia and South America.
Alex Campbell, IHA’s head of research and policy, said: “We are delighted to support the African Development Bank in this important and urgent project to modernise Africa’s hydropower fleet.”
The African Development Bank manages SEFA and the project is fully aligned with the Bank’s New Deal on Energy for Africa, which aims to provide universal access to energy for Africans and prioritises low-carbon technologies that harness the continent’s hydro, solar, geothermal and wind resources.
SEFA focuses on three areas including green mini-grids to accelerate energy access to underserved populations; green baseload to support clean generation capacity, and energy efficiency to optimize energy systems and reduce energy intensity.
Under the current dispensation, support is provided through technical assistance and concessional investments that will improve the bankability of projects across innovative technologies and challenging geographies and crowd-in more commercial investments into the sector.
First established in 2012, SEFA is anchored in a commitment of $121 million by the Governments of Denmark, the United States, the United Kingdom, Italy, Norway and Spain.
To date, the fund has committed over $76 million across 56 projects in 30 countries. The fund’s investments are expected to leverage in excess of $1.5 billion in investments in new capacity and connections across the continent. SEFA is central to the Bank’s New Deal on Energy for Africa strategy and a “catalytic” financial vehicle for the achievement of universal energy access by 2030 in line with Sustainable Development Goal 7.
