At its 19th Board Meeting in Songdo, South Korea, the Board of the Green Climate Fund (GCF) has approved the first funding proposal of the African Development Bank for Zambia’s Renewable Energy Financing Framework. The GCF will provide a $50million loan and a US$ 2.5 million grant.
The Framework aims to finance 100 MW of renewable energy projects under the Renewable Energy Feed-in-Tariff (REFiT) policy of Zambia. The primarily solar projects will help diversify Zambia’s energy production which is heavily reliant on Hydro-electricity. Facing a serious electricity supply deficit due to recent droughts, the Government of the Republic of Zambia launched the REFiT policy in 2017 to crowd-in private investments for small-scale renewable projects up to 20MW.
This is the first program that will be co-financed by the GCF and the African Development Bank following the signing of the Accreditation Master Agreement on November 8, 2017 between the two institutions, making the Bank a credited implementer of GCF-approved projects.
“This is a significant first fruit of our joint commitment for development and growth in Africa that aligns with the Paris Agreement. We look forward to partnering further with the Green Climate Fund to help increase Africa’s share of climate finance” said Akinwumi Adesina, President of the African Development Bank.
The African Development Bank has placed climate change mitigation and adaptation, as well as powering Africa at the top of its agenda. The Bank’s second Climate Action Plan commits to 40% of Bank approvals to classified as climate finance annually by 2020 and its New Deal in Energy for Africa, which aims to provide universal access to energy by 2025.
“This innovative project represents an important and fitting milestone in our partnership with GCF. Not only do the projects pave the way for providing clean, sustainable energy to around 300,000 people, through diversifying Zambia’s energy mix. It will also make the country more resilient to the effects of climate change.” said Amadou Hott, Vice President for Power, Energy, Climate and Green Growth at the African Development Bank.
Set up in 2010 by 194 countries who are parties to the United Nations Framework Convention on Climate Change (UNFCCC), GCF is a global fund created to support the efforts of developing countries to respond to the challenge of climate change.