Business
New Deal for Energy in Africa as African Development Bank to mobilize $55 billion investment
Newly appointed African Development Bank President, Akinwumi Adesina, has said he is aiming to eliminate Africa’s energy deficit by 2025 by mobilizing US$55 billion of investment.
Termed the “New Deal for Energy in Africa,” the continent’s largest development bank said the plan will significantly raise its support for energy projects and that its partners should also scale up efforts.
The proposal also called for African countries to increase financing for the development of the energy industry.
“A lot of financing is needed,” Adesina said in a speech on Thursday in Abidjan, the commercial capital of Ivory Coast, where the bank is based. “We must close the US$55 billion financing gap for energy in sub-Saharan Africa.”
Adesina served as Nigeria’s minister of agriculture and rural development before being chosen to lead the development bank.
The deal is the first initiative he has announced in his new role. The bank spent US$2 billion on energy projects in 2014, with US$650 million in power generation. Over 80 percent of the generation projects were renewable energy.
About 620 million people in sub-Saharan Africa do not have access to electricity, according to data from the International Energy Agency. Demand for energy is soaring, with a 45 percent jump between 2000 and 2012, according to the IEA.
“Renewables will have a very big role to play in Africa, I think the introduction will lead to a transformation of the electricity sector,” said Angeli Hoekstra, Africa power and utilities leader at PricewaterhouseCoopers LLP. “There is a lot more investment taking place in this space.”
Adesina called for the development of major regional energy projects such as the Inga hydropower dam in the Democratic Republic of Congo. The development bank has recently invested US$70 million in the Inga 3 unit, a stage of the project, with construction expected to begin in 2017, according to Alex Rusamba, director of the bank’s department of energy, environment and climate change.
The hydropower project will have the potential to generate 40 gigawatts of electricity when complete.
