The German government has announced an investment of $115.7 million to expedite the development of renewable energy across Africa. The capital will be invested through the African Development Bank’s Sustainable Energy Fund for Africa (SEFA). The aim of this investment is to facilitate private sector investment in funding the region’s transition to low-carbon energy resources.
SEFA plans to use the funds to update power generating, transmission, and distribution networks across Africa in order to increase renewable energy penetration. The contribution follows Germany directing $57.8 million in 2020 to support the work being conducted by SEFA.
SEFA is a multi-donor Special Fund managed by the African Development Bank. It provides catalytic finance to unlock private sector investments in renewable energy and energy efficiency. SEFA offers technical assistance and concessional finance instruments to remove market barriers, build a more robust pipeline of projects and improve the risk-return profile of individual investments. The Fund’s overarching goal is to contribute to universal access to affordable, reliable, sustainable, and modern energy services for all in Africa, in line with the New Deal on Energy for Africa and Sustainable Development Goal 7.
REGlobal’s Views: Many African countries still suffer from energy access issues with a sizable share of their population having little or no access to quality power. To improve the energy supply situation in Africa, many developed nations have given significant funds in the form of grants or low interest loans or direct investments over the years. With the increasing popularity of renewable power, most of this funding is now being given for renewable power development in the continent.