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African Development Bank support for clean energy access falls short of goals, analysis finds, as civil society calls on the bank to do more

WASHINGTON, D.C. – As the African Development Bank (AfDB) kicks off its first-ever Africa Investment Forum in South Africa, a new analysis released today finds that the AfDB’s own support for the most cost-effective energy access solutions lags far behind what is needed — in contrast to its world-leading pledge to scale up energy access on the continent. Dozens of civil society organizations signed a letter to AfDB decision-makers that drives home the report’s key messages.

The report, assessing nearly one hundred AfDB energy transactions from 2014 through 2017, finds that while AfDB’s approvals for projects intended to increase energy access increased dramatically in 2017, the share of approved financing for distributed renewable energy (off-grid and mini-grid solutions) remains extremely low, at less than two percent of AfDB’s energy finance in 2014 and 2015, and 6.6 percent of AfDB’s energy finance in 2016 and 2017. This translated to an average of USD $46 million per year from 2014 through 2017. In addition, AfDB support for clean cooking remains extremely low, at less than one percent of its energy finance.

This stands in stark contrast to the International Energy Agency’s (IEA) “Energy for All” scenario, which finds that for a least-cost pathway to universal access in Sub-Saharan Africa by 2030, two thirds of electricity investment should be in off-grid and mini-grid solutions. The report finds that if the AfDB is serious about meeting its commitment to enable 75 million new off-grid connections and provide 150 million households with clean energy solutions for cooking, it must massively and deliberately scale up support in these areas.

“The African Development Bank is a crucial partner in delivering the Sustainable Development Goals for Africa, and it has an important role to play in scaling up energy access. But because of underinvestment in off-grid and mini-grid energy solutions, the bank is falling behind in lifting Africans out of poverty, supporting  better healthcare and education, and improving livelihoods,” said Thuli Makama, Africa Senior Advisor at Oil Change International.

“Ambitious goals make a good splash, but they are meaningless if the AfDB does not put its money where its mouth is,” said Kate DeAngelis of Friends of the Earth U.S. “The AfDB must immediately ramp up its support for distributed renewables and clean cooking if it wants to have any hope of achieving universal access to electricity by 2025.”

If the AfDB rapidly scales up finance for distributed renewable energy, it can deliver on  the goals of the New Deal on Energy for Africa, and can help uplift the 600 million people in Sub-Saharan Africa who lack access to electricity and the 890 million who lack access to modern energy for cooking. Without a change in the status quo, the IEA estimates 600 million Africans will still lack access to electricity in 2030.

The report’s messages are echoed in an open letter to the AfDB Board of Directors and President Akinwumi Adesina, released today and signed by dozens of civil society organizations in Africa and around the world.

The letter and the report both call on the AfDB to:

  • Dramatically increase resources for distributed renewable energy and clean cooking to reflect their importance to development in Africa;
  • Mandate meaningful civil society participation, which is critical to enhance outcomes, including in country strategy development processes;
  • Ensure energy access resources for distributed renewable energy flow to countries with lower levels of energy access and to poorer communities within countries that have relatively higher levels of access;
  • Use all the financial tools at its disposal to support scaled-up finance for energy access through distributed renewables, including guarantees and other risk mitigation instruments; and
  • Build capacity of local and regional financial institutions to finance energy access solutions.

 

Notes:

  • Over 60 civil society organizations from across Africa and around the world have signed a letter urging the African Development Bank’s President and Board of Directors to do more to scale up financing for energy access and distributed renewable energy.
  • The report can be found at this link.
  • The inaugural Africa Investment Forum, hosted by the African Development Bank, is taking place in Johannesburg, South Africa, November 7 to 9, 2018.

 

Communications Contact: Patrick Davis, (202) 222-0744, pdavis@foe.org

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