The African Development Bank (AfDB) has made a U-turn on the $1.5 billion Sustainable Energy Fund for Africa (SEFA) as it converted the fund to a concessional finance facility.
The board of governors, AfDB, a document of the bank sighted by New Telegraph showed, has approved the conversion of the Sustainable Energy Fund for Africa (SEFA), which it administers into a “special fund” to amplify its development impact by allowing it to access a wider range of financial instruments.
Currently, SEFA 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.
“Under the new dispensation, the fund will focus its interventions on green mini-grids to accelerate energy access to underserved populations green base load to support clean generation capacity and energy efficiency to optimise energy systems and reduce energy intensity,” the AfDB document read.
“This support will be 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,” the bank maintained.
The special fund will provide critical support to African countries to accelerate the transition towards greener and more sustainable power systems, the bank’s acting Vice-President, Power, Energy, Climate and Green Growth, Wale Shonibare, said.
He said the special fund’s ability to provide various financial instruments would unlock more private sector investments in new technologies and businesses.
First established in 2012, SEFA is anchored in a commitment of $121 million by the governments of Denmark, United States, United Kingdom, Italy, Norway and Spain.
To date, it has committed $76 million across 56 projects in 30 countries.
The fund’s investments are expected to leverage over $1.5 billion in investments in new capacity and connections across Africa.