World Bank Allocates $300 Mn For RE Projects in Eastern & Southern Africa

World Bank Allocates $300 Mn For RE Projects in Eastern & Southern Africa. Pexels.

The World Bank has extended a facility of close to $300 million to the Eastern and Southern African Trade and Development Bank (TDB), to support distributed renewable energy (DRE) and clean cooking private sector projects in eligible countries of the World Bank’s International Development Association (IDA) that are TDB member states.

This new facility follows TDB’s successful financing of innovative off-grid solar projects in the region it serves which were financed under a $415 million World Bank Regional Infrastructure Financing Facility (RIFF) facility that was extended to TDB in 2020.

It is part of the first wave of phases of IDA’s $5 billion Accelerating Sustainable and Clean Energy Access Transformation (ASCENT) program, which is expected to provide access to electricity to up to 100 million people in Africa over the next seven years, according to a press release by the World Bank.

The facility is financed through International Development Association (IDA) financing and a grant from the Energy Sector Management Assistance Programme (ESMAP). Under the facility extended to TDB, the ASCENT Regional Energy Access Financing Platform (REAF) will be established and implemented. The ASCENT REAF is estimated to have the potential to facilitate access to electricity for up to 5 million people, access to clean cooking for up to 1 million people, and add up to 35MW in terms of energy capacity to the region.

Boutheina Guermazi, World Bank Director for Regional Integration in Africa and the Middle East said, “Access to sustainable, reliable, and affordable energy is at the crux of Africa’s development and poverty reduction efforts. The World Bank is pleased to build on our strong partnership with TDB Group, and we look forward to leveraging our combined efforts to unlock even more sources of financing for a host of private sector actors through the new ASCENT Regional Energy Access Financing Platform (REAF).”

Through direct lending to the private sector, co-financing, or on-lending via financial intermediaries, loans under this facility will be provided to DRE and clean cooking companies, with smaller loans to SMEs to be extended through TDB Group’s Trade and Development Fund (TDF).

Furthermore, performance-based catalytic grants will be made available to support companies entering new markets to pilot promising innovations and help the private sector grow. This is in addition to technical assistance, capacity building, and the development and piloting of financial innovations for TDB, TDF, and clients, to enhance the sustainability of their interventions in the DRE and clean cooking space. This support will particularly focus on pipeline development, implementation tools and technologies, E&S aspects, climate resilience, gender, and innovative financing instruments.