The African Development Bank (AfDB) is mobilising $550 billion to kick-start electricity supply to the poorest parts of the continent within a decade.
The Bank has assured African countries of its capability to mobilise $55 billion yearly to achieve this 10-year plan.
The International Energy Agency had assessed the electricity needs of the continent and reported that more than 620 million people in Africa lack access to electricity.
The number represents half the world’s population not linked to the grid.
AfDB president Akinwumi Adesina, who was elected to lead the bank in September, is undaunted by the scale of the challenge.
He reiterated in Abuja on Wednesday that he is committed to bring electricity to the poorest parts of the continent within a decade.
The 620 million people who have no access to power, he said, included the vast populations in war-torn countries such as South Sudan, Somalia and the Democratic Republic of Congo.
“I’m not bothered by that amount ($550 billion) — that money is there,” Dr Adesina said.
“Today Africa generates $540 billion in tax revenue per year. If you take 10 per cent of that and devote it to the energy sector, the problem is solved.
“If we light up and power Africa, we can have a GDP growth rate of double digits without any problem at all,” said the AfDB chief.
Dr Adesina, formerly Nigeria’s minister of agriculture, is driving the programme dubbed ‘The New Energy Deal for Africa’ which aims to extend electricity to the entire continent by 2025.
He wants aid donors and African governments to scale up investment in energy and will use the bank’s leverage to encourage financial flows from private companies.
The development bank said this month that it will triple its funding for climate-related projects to $5 billion per year.
It also plans to reform the pricing of energy, utilities and subsidy programmes in Africa’s energy industry.
The focus will be on renewables. It doesn’t rule out coal, which the World Bank is prodding development institutions to fund only in extraordinary circumstances.
“We look at all sorts of energy. Africa will develop with what it has. It needs green growth, and we will move in that direction, but you cannot make the shift overnight.,” Dr Adesina pointed out.
He reported that about $527 billion was invested in Africa’s power industry between 2014 and 2025, with nearly 30 per cent going to renewables and over half in transmission and distribution.