President of the African Development Bank (AfDB), Dr. Akinwumi Adesina, has said the continent would need a lot of electricity to develop its economy, hence, the bank’s commitment to its energy sector.
Speaking at the 37th summit of the heads of state and governments of the Southern Africa Development Community (SADC) in Pretoria, South Africa, Adesina explained the bank set up its ‘New Deal on Energy for Africa’ primarily to grow the continent’s energy production and supply levels.
He said $12 billion of the bank’s fund would be invested in the energy sector over the next five years, while about $50 billion would be leveraged from private sector financiers.
“There’s no doubt, these are tough times for the SADC region, with commodity price declines and other external shocks slowing down growth. The Bank strongly supports the structural reforms to spur greater growth of South Africa, especially, for in its growth lies the accelerated economic recovery of the entire SADC region.
“What we must do is turn these trends around. While recovery of commodity prices has helped, and stronger macroeconomic reforms are needed, we must address fundamental structural challenges that have continued to hamper growth in SADC and Africa, as a whole.
“At the top of the list is electricity. That’s why the African Development Bank is investing heavily in the power sector. Through our New Deal on Energy for Africa, the Bank is investing $12 billion over the next five years in the energy sector, to leverage between $45-50 billion in financing from the private sector and other sources. Africa cannot develop in the dark,” said Adesina.
He further stated: “Investment in the power sector accounts for 35 per cent of all the Bank’s financing in the Southern Africa region, with investments in major projects such as Medupi Power Project in South Africa, the Kariba Dam Rehabilitation Project and the hydro-electric scheme on the Zambezi, which supplies 34 and 37 per cent of the power for Zimbabwe and Zambia, respectively.
“This region also inspires the Bank to think big. Last year, the Bank led a loan syndication of $965 million for South Africa’s Eskom, the highest in Africa’s history – to support it to develop 13,000MW of power generation capacity. The Bank is strongly supporting the government of DRC towards the development of the Nga Dam, which if we all get right, will turn on the lights for all of Africa.”
“And just a few weeks ago, I signed a new $6 billion new energy financing facility to be provided by Japan, by Prime Minister Abe, under Japan-Africa Energy Facility, to support power systems, transmission, and distribution projects,” he added.