The board of the African Development Bank (AfDB) has approved a proposal for participation of US$30 million in the African Energy Infrastructure Fund.
AfDB said the participation allows it to continue its support for important energy requirements in Africa while encouraging energy initiatives of the private sector. The fund is to target energy infrastructure primarily in sub-Saharan Africa.
The bank said the fund intends to mobilize US$500 million between now and 2015, establishing a portfolio expected to increase electricity production by 530 MW and energy consumption by 620 gigawatt-hours per year. The fund is to serve as a catalyst in the promotion of infrastructure initiated by the private sector, making it possible to mobilize approximately US$1 billion through 2015.
For AfDB, the African Energy Infrastructure Fund will be the first investment in funds targeting exclusively energy infrastructure, which the bank said is a key sector aligned with the bank’s strategies of development of infrastructure and development of the private sector. The bank’s holdings are to encourage other financial institutions to participate in co-financing.
AfDB said the fund’s reserve of projects has a high commercial viability expected to have a significant effect on development. The energy projects are expected to encourage export of electricity among countries as well as better regional integration.
In June, AfDB Vice President Arunma Oteh told a regional investment conference that studies by the bank revealed the private sector is ready to invest in power generation, but requires others to take up transmission and distribution. (HNN 6/12/08) The bank official said AfDB is involved in various hydropower projects to be implemented between 2008 and 2009 that will generate up to 480 MW.