The African Development Bank (AfDB) will, as part of its support for US President Barack Obama’s Power Africa initiative, deepen and expand its work in reforming the energy sector.
AfDB, which is already a major investor in the energy sector, would scale up funding for energy production, transmission and distribution infrastructure, cross-border power pools, as well as government policy and regulatory reforms.
An official AfDB statement on Tuesday said the Bank would particularly emphasise reforms for national power utilities, many of which were in need of better business models and financial reinforcement.
“We expect to allocate as much as US$3 billion over the next 5 years. This will leverage at least 4 times more investments in the energy sector. Our interventions will include investment loans, reforms, advisory, and guarantees,” AfDB President Donald Kaberuka said in Dar es Salaam, in reference to Tanzania, Kenya, Ethiopia, Ghana, Liberia, and Nigeria – the Power Africa priority countries.
“Reforms are the key,” Dr Kaberuka said. “The billions of dollars available for investment in the energy sector will translate into actual bulbs in people’s homes and electricity necessary to grow small businesses if state utilities run efficiently and effectively. The policy reforms will facilitate and enhance cross-border energy markets.”
The statement said the main financial source for the Bank’s assistance to the energy sector in the Power Africa countries was the African Development Fund (ADF), the Bank’s concessional window. The ADF contributed US$1.4 billion out of the Bank’s US$1.6 billion over the last five years in the six priority countries’ energy investments.
Addressing Chief Executive Officers in Tanzania on Monday, US President Barack Obama said that he saw Africa as the next major success story and with Power Africa he wanted the US to be part of that success
AfDB resident Kaberuka welcomed the initiative saying “power Africa is a timely initiative and the Bank will work with the six countries for a successful implementation”.