The board of the Green Climate Fund (GCF) has approved the first funding proposal of the African Development Bank (AfDB) for Zambia’s renewable energy financing framework, providing a $50-million loan and a $2.5-million grant.
The framework aims to finance 100 MW of renewable energy projects under Zambia’s renewable energy feed-in-tariff (REFiT) policy. The projects, which mainly include solar projects, will help diversify Zambia’s energy production, which is heavily reliant on hydroelectricity.
“Facing a serious electricity supply deficit, owing to recent drought, the Zambian government launched the REFiT policy last year to crowd-in private investments for small-scale renewable projects of up to 20 MW,” reports the AfDB.
This is the first programme to be co-financed by the GCF and the AfDB, following their signing of the Accreditation Master Agreement on November 8, making AfDB a credited implementer of GCF-approved projects.
“This is a significant first fruit of our joint commitment for development and growth in Africa that aligns with the Paris Agreement. We look forward to partnering further with the GCF to help increase Africa’s share of climate finance,” states AfDB president Akinwumi Adesina.
Moreover, AfDB has placed climate change mitigation and adaptation, as well as powering Africa, at the top of its agenda. The bank’s second climate action plan commits to 40% of AfDB approvals being classified as climate finance, yearly, by 2020 and its 'new deal' in energy for Africa, which aims to provide universal access to energy, by 2025.
“This project represents an important and fitting milestone in our partnership with GCF. The projects pave the way for providing clean, sustainable energy to about 300 000 people, through diversifying Zambia’s energy mix,” notes Adesina.
The projects will also make the country more resilient to the effects of climate change, adds AfDB power, energy, climate and green growth VP Amadou Hott.