The Green Climate Fund (GCF) has approved US$ 170.9M in financing for the African Development Bank (AfDB)’s Leveraging Energy Access Finance Framework (LEAF) program, which aims to unlock commercial and local-currency financing for Decentralized Renewable Energy (DRE) projects in six program countries, namely Ethiopia, Ghana, Guinea, Kenya, Nigeria, and Tunisia.
This bankroll is part of an overall US$ 900M budget for the program whose objective is to scale up the roll-out of green mini-grids, solar home systems, and commercial and industrial solar solutions in the above-mentioned countries.
Tony Clamp, the acting Director of GCF’s Private Sector Facility, said that the Incheon, South Korea-based fund is delighted to partner with the multilateral development finance institution to support this “timely and critical” program for decentralized renewable energy across these six African countries.
“Green Climate Fund’s commitment will help unlock the much-needed commercial capital and local currency financing to help overcome financing barriers which have been worsened by the Covid-19 pandemic,” explained Mr. Clamp.
Expectations for the program
By deploying credit enhancement instruments and technical assistance, the LEAF program will strengthen capital markets and crowd-in private sector investors, including local financial institutions, thereby enhancing their financial and technical capacity to finance businesses in the fast-growing DRE market segment.
The program will also provide the requisite support to strengthen the enabling environment and increase private sector investment in this niche.
“GCF’s approval of the LEAF program is a significant boost for the AfDB’s combined ambitions of accelerating electricity access and supporting the transition to clean energy on the African continent using decentralized renewable energy solutions facilitated through local financing,” said Dr. Kevin Kariuki, the Bank’s Vice President for Power, Energy, Climate and Green Growth.
The LEAF program will provide renewable energy to approximately 6 million people and businesses, and prevent about 28.8 million tonnes of CO2 emissions.