GCF and AfDB sign key agreement on transformative energy transition programme

  • Article type News update
  • Publication date 15 Sep 2022

GCF and the African Development Bank (AfDB) have signed a critical agreement to advance the implementation of a transformative programme, Desert to Power G5 Sahel Facility, which will support least developed countries in the Sahel region of Africa in their energy transition and access. The agreement was executed 2nd September 2022.

The USD 1 billion project will leverage blended financing from the AfDB and the private sector for large-scale solar generation with over USD 150 million in approved GCF financing.

The Group of Five for the Sahel (G5 Sahel) countries – Burkina Faso, Chad, Mali, Mauritania and Niger have high poverty levels, high vulnerability to climate change, and low electrification rates. While they have some of the highest solar energy generation potential in the world, they cannot benefit from it due to a lack of public and private investments in the clean energy sector.

The Desert to Power G5 Sahel Facility aims to secure the immense solar energy potential of the Sahel region and bring cheaper, reliable, and low-emission electricity to end users. The Facility will address institutional and financial barriers, create an enabling environment to facilitate private sector funding for solar technological innovations, and ensure sustainability of the clean energy sector.

AfDB is an Accredited Entity (AE) to GCF. AE’s range from private, public, non-governmental,  national, or international entities that partner with GCF to implement projects. Guided by the GCF investment framework and the priorities of developing country governments, AE’s are crucial as they convert concepts into action, work alongside countries to produce project ideas, and submit funding proposals for the GCF Board to approve.

Speaking at the signing of the agreement, Wale Shonibare, Director – Energy Financial Solutions, Policy & Regulation at AfDB said, “This agreement paves the way for the provision of catalytic blended finance and guarantees to support the acceleration of private sector IPPs in the G5-Sahel countries, resulting in the installation of 500MW of new solar generation capacity and further diversification of the region’s energy mix. ”

Henry Gonzalez, Deputy Executive Director a.i. said, “The agreement between AfDB and GCF advances the implementation of this transformative energy transition programme, which aims to support least developed countries in the Sahel region of Africa.”

The programme aims to improve energy access and security, reduce 14.4 million tonnes of CO2 equivalent, and directly benefit 3.5 million people, out of which 1.75 million are women. The expected indirect beneficiaries are estimated at 700,000 people. It is also estimated that 1,250 jobs will be created during construction and 450 permanent jobs.