AfDB to invest $12bn in Africa energy sector

The African Development Bank (AfDB) plans to invest $12 billion in the energy sector in African countries, including Malawi in the next five years.

The money will be available for borrowing by the private sector and African governments, according to AfDB country representative Andrew Mwaba.

Apart from that, the pan-African bank also plans to triple its climate finance to Africa to $5 billion per year by 2020 to support climate change adaptation and mitigation efforts.

Currently, many African countries including Malawi are facing electricity challenges, a development that has slowed down economic growth.

Speaking in an interview on the sidelines of the Energy Financing Seminar in Africa that Malawi is hosting, Mwaba said the private sector can play a huge role in helping to end power outages.

He said: “We have set aside $12 billion for our New Deal on Energy for Africa and related flagship programmes. This money is available for investors or even governments so that it can be invested in this sector, which is crucial for the development of any nation.”

Mwaba said if Malawi can improve its energy sector and diversify its energy sources it can become an exporter of energy in the near future.

Currently, the country’s generating capacity is 357 megawatts (MW) against the current peak demand of 430MW, according to figures from Electricity Supply Corporation of Malawi (Escom).

South Africa-based AfDB acting regional director for Africa Kennedy Mbekeani said they wanted to have this meeting next year, but the Malawi government insisted that it should take place this year.

“Looking at the challenges the country is facing in the energy sector we had to oblige. Energy is crucial for any economy and I must admit that lack of it is constraining economies and the uptake of new technologies in all sectors including health,” he said.

Minister of National Resources, Energy and Mining Bright Msaka commended AfDB for its new initiative, which will help investors get financial resources for investments in the energy sector.

The objective of the seminar, among others, is for AfDB to disseminate information on  their range of financing products, credit enhancement and risk mitigation products, initiatives and programmes for the energy sector and how the governments and the private sector can access these opportunities.