The African Development Bank, the Korean Ministry of Economy and Finance, and the Export-Import Bank of Korea have signed an agreement under which South Korea will co-finance energy projects with the African Development Bank for $600 million. Korea’s funds will be invested in renewable energy generation, transmission, and distribution through the Korea Eximbank.
Korea became a member of the African Development Fund and the African Development Bank in 1980 and 1982, respectively. In 2006, the Korean government established Korea-Africa Economic Cooperation (KOAFEC) as a conduit for contributions to the Bank’s multi-donor and special funds. The Korea-Africa Energy Investment Framework (KAEIF) agreement follows the signing of a General Cooperation Agreement between the Bank and the Korean government on May 28, 2021. The KAEIF is particularly interested in renewable energy solutions in Africa, such as generation, transmission, distribution, off-grid and mini-grid systems, policy and regulatory reform, energy efficiency, and clean cooking programmes.
The KAEIF agreement will also help to expedite the implementation of off-grid solutions such as mini-grids and solar household systems throughout Africa. The AfDB has established channels for financing off-grid alternatives throughout Africa. This is the case with the Financial Institution’s Energy Inclusion Facility (EIF), which was established for grid projects and decentralised alternatives. The Global Environment Facility (GEF), the Kreditanstalt für Wiederaufbau (KfW), the German development agency, the Nordic Development Fund (NDF), Calvert Impact Capital, and the Prudential Insurance Company of America have all contributed to the facility.