AfDB: Reforms key to Power Africa success
03 July 2013, 13:57
The African Development Bank will deepen and expand its work in reforming the energy sector in Africa in its efforts to support US power plan.
Already a major investor in the energy sector, the AfDB will scale funding for energy production, transmission and distribution infrastructure, cross-border power pools, as well as government policy and regulatory reforms.
The Bank will focus its efforts and emphasize reforms for national power utilities, many of which are in need of better business models and financial reinforcement.
Speaking in Dar es Salaam, the AfDB President Donald Kaberuka said they will allocate as much as $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,” in reference to Tanzania, Kenya, Ethiopia, Ghana, Liberia, and Nigeria -- the Power Africa priority countries.
Kaberuka stressed that reforms are the key, as 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, so as to facilitate and enhance cross-border energy markets.”
The main financial source for the Bank’s assistance to the energy sector in the Power Africa countries is the African Development Fund (ADF), which is its concessional window. The ADF contributed $1.4 billion out of the Bank’s $1.6 billion over the last five years in the six priority countries’ energy investments.
Addressing CEOs in Tanzania on Monday, visiting 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.
Obama went on to add that the Power Africa initiative would double access to electricity in sub-Saharan Africa.
Obama also took time to thank the African Development Bank for its partnership in the project, as well as many companies that have stepped up with commitments.
The US president noted that those who are involved in this process, have continually told him that the problem is not going to be private-sector financing, but getting the rules right, creating the framework whereby they can build to scale rapidly and implement the Power Plan.
President Kaberuka welcomed the initiative, saying it was timely and that the Bank will work with the six countries to successfully implement the project.
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