The GCF will provide a US $50m loan and a US $2.5m grant for the framework. The framework aims to finance 100MW of renewable energy projects under the Renewable Energy Feed-in-Tariff (REFiT) policy of Zambia. The primary solar projects will help diversify the country’s energy production, which is heavily reliant on hydro-electricity.
Facing a serious electricity supply deficit due to recent droughts, the government of Zambia launched the REFiT policy in 2017 to crowd-in private investments for renewable energy projects up to 20MW.
Renewable energy financing framework
This is the first programme that will be co-financed by the GCF and the AfDB following the signing of the Accreditation Master Agreement on November 8, 2017 between the two institutions, making the Bank a credited implementer of GCF-approved projects.
According to the AfDB President, Akinwumi Adesina, it is a significant first fruit of the joint commitment for development and growth in Africa that aligns with the Paris Agreement. “We look forward to partnering further with GCF to help increase Africa’s share of climate finance,” he said.
Also commenting on the development was Amadou Hott, vice president for power, energy, climate and green growth at the AfDB: “This innovative project represents an important and fitting milestone in our partnership with GCF,” he said.
Not only will the projects pave way for providing clean, sustainable energy to around 300,000 people, through diversifying Zambia’s energy mix; they will also make the country more resilient to the effects of climate change.