AAAP in the Media
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African Development Bank Group approves $379.6 million Desert to Power financing facility for the G5 Sahel countries
The Board of Directors of the African Development Bank Group has approved the Desert to Power G5 Sahel Financing Facility, covering Burkina Faso, Chad, Mali, Mauritania, and Niger. The Bank envisages to commit up to $379.6 million in financing and technical assistance for the facility over the next seven years.
The Desert to Power G5 Financing Facility aims to assist the G5 Sahel countries to adopt a low-emission power generation pathway by making use of the region’s abundant solar potential. The facility will focus on utility-scale solar generation through independent power producers and energy storage solutions. These investments will be backed by a technical assistance component to enhance implementation capacity, strengthen the enabling environment for private sector investments, and ensure gender and climate mainstreaming.
The facility is expected to result in 500 MW of additional solar generation capacity and facilitate electricity access to some 695,000 households. Over the lifespan of the project, it is expected to reduce carbon emissions by over 14.4 million tons of carbon dioxide equivalent.
The Board of the Green Climate Fund approved $150 million in concessional resources in October 2021 for the facility, which is expected to leverage around $437 million in additional financing from other development finance institutions, commercial banks and private sector developers. The Global Center on Adaptation is providing technical assistance to strengthen adaptation and resilience measures undertaken in the facility as part of the Africa Adaptation Acceleration Program in partnership with the African Development Bank.
The African Development Bank’s Vice President for Power, Energy, Climate Change and Green Growth, Dr. Kevin Kariuki said: “The innovative blended finance approach of the Desert to Power G5 Sahel Facility will de-risk, and therefore catalyze, private sector investment in solar power generation in the region. This will lead to transformational energy generation and bridge the energy access deficit in some of Africa’s most fragile countries.”
Dr. Daniel Schroth, the Bank’s Acting Director for Renewable Energy and Energy Efficiency, added: “The facility will also support the integration of larger shares of variable renewables in the region’s power systems, notably through the deployment of innovative battery storage solutions and grid investments.”
The facility will be implemented as part of the broader Desert to Power initiative, a flagship program led by the African Development Bank. The objective is to light up and power the Sahel region by adding 10 GW of solar generation capacity and providing electricity to around 250 million people in the 11 Sahelian countries by 2030.
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Climate risk regulation in Africa’s financial sector and related private sector initiatives
Extreme weather phenomena such as rising temperatures and the increasing frequency of droughts and floods are affecting lives and livelihoods in Africa. According to the Global Climate Risk Index 2021,1 five African countries ranked among the 10 countries most affected by extreme weather in 2019: Mozambique (first), Zimbabwe (second), Malawi (fifth), South Sudan (eighth), and Niger (ninth).
The Desert to Power G5 Sahel Financing Facility
The Sahel region faces more challenges to achieving sustainable development in the face of poverty, insecurity and climate change than perhaps any other. The region also includes five of the ten poorest nations in the world (Burkina Faso, Chad, Mali, Mauritania, and Niger). Together these form the G5 Sahel, where more than three quarters of the 86 million people who live there have no access to electricity.
This region also has some of the highest solar energy irradiation and photovoltaic potential in the world, though economic development is constrained in part by the energy supply gap. To take advantage of this opportunity, the Desert to Power G5 Sahel Financing Facility aims to tap this ‘free’ resource by increasing solar power generation and electricity access, while addressing structural challenges in the energy sector.
The overall aim is to assist G5 Sahel countries to adopt low-emission solar power generation through independent power producers and energy storage solutions. Investments are to be supported by technical assistance, gender and climate mainstreaming, and encouraging private sector buy-in.
- Add 500 MW of additional solar generation capacity, and connect 695,000 households to an electricity supply.
- Ensure low-emission development to mitigate effects of climate change, by directly reducing emissions by 14.4 Mt CO2e over 25 years.
- Strengthen regional grid management capacity by building human, social, and institutional capital.
- Create harmonized gender-responsive regulatory frameworks for the electricity sector to lower investment barriers and promote gender-responsive approaches.
- Contribute to improving the quality of life of women and men through more sustainable, reliable and affordable energy access by households and workplaces, and supporting productive uses of electricity, industrialization, and basic public services such as health and education.
- Expand opportunities for manufacturing and industries to provide employment and build prosperity.
The Facility is a part of the broader Desert to Power Initiative, that by 2030 aims to light up and power the Sahel region by adding 10 GW of solar generation capacity and provide electricity to 250 million more people in 11 countries from Senegal to Djibouti.
- Rapid climate risk assessment of transmission systems to provide insights to the location of solar plant
- Upstream capacity building through a regional Masterclass on Climate-Resilient PPPs
- Climate risk assessment to quantify impacts of climate hazards on assets, services, and people
- Adaptation and resilience investment options appraisal, to identify and prioritize adaptation and resilience options and present recommendations of investment for each project;
- Advisory services for results and evidence-based planning, management and M&E of interventions
- Improved investment climate and a sustainable market for independent solar power producers created.
- knowledge and technology transfer facilitated to create opportunities for SMEs in the value-chain.
- Environmental co-benefits driven to increase access to electricity and reduce the need for firewood, reduce deforestation and build resilience to climate change.
- Countries in the Sahel region enabled to transform desert areas into an opportunity to meet their energy needs using clean technologies while delivering multiple adaptation co-benefits.
- Strengthened capacity of national institutions in G5 Sahel countries to ensure long-term sustainable ilitydevelopment of their national renewable energy sectors.
- Reliable environment for private sector solar project financing created.
AfDB investment USD 379.6 million
Total of USD 966.7 million
Amount: AfDB investment of USD 379.6 million, of a total of USD 966.7 million
Reinforcing Resilience to Food and Nutrition Insecurity in the Sahel (P2-P2RS)
The Sahel, which lies between the Sahara Desert to the north and tropical savannas to the south, is one of the largest semi-arid/arid sub-regions globally. As such, the region is highly vulnerable to climate change and other uncertainties. The impacts of climate change may have critical socio-economic consequences for the Sahel, including poor agricultural yields, increased frequency of natural disasters. Already, the number of people in the Sahel suffering from chronic food and nutrition insecurity, poverty and vulnerability to the effects of climate change is rising steadily.
A lasting solution to food and nutrition insecurity in the Sahel requires building resilience to climate change, long-term agricultural sector financing and developing trade and regional integration. Sustained, longer-term investments in household resilience can significantly reduce the cost of emergency assistance, ultimately breaking the cycle of recurring famine. This is the most cost-effective intervention option which meets the basic needs and preserves the dignity of the populations of the Sahel. This idea is central to the Programme to Build Resilience to Food and Nutrition Insecurity in the Sahel (P2RS)
The overall objective of the P2-P2RS is to contribute to the substantial improvement of the living conditions and the food and nutritional security of the populations of the Sahel region.
Specifically, the program aims to i) strengthen the resilience to climate change of agro-sylvo-pastoral producers, including through promotion of climate-smart agricultural technologies in the Sahel and the development of climate intelligent villages; ii) develop the agro-sylvo-pastoral value chains, including through the development and improvement of hydro, meteorology and climate services; and iii) support regional institutions (CILSS, APGMV, CCRS) to strengthen adaptive capacity in the Sahel.
- Design digital adaptation solutions (Digital Climate Advisory Services, DCAS) for the Sahel context
- Investment readiness and infrastructure, institutional and farmer capacity needs for DCAS
- Feasibility study to integrate DCAS into agricultural extension and agrometeorological advisory to smallholder farmers and pastoralists
- 1 million rural households have access to digital or data-enabled climate-smart technologies
- 500,000 smallholders have adopted adaptation practices
- 5 million smallholders have access to climate services;
- Development and improvement of hydro, meteorology and climate services
- The development of climate-intelligent villages
- Promotion of climate-smart agricultural technologies in the Sahel
- Resilience to food and nutrition security built for the targeted populations
USD 300 million