The World Bank has allocated close to $300 million for the Eastern and Southern African Trade and Development Bank (TDB) to support private sector ventures in distributed renewable energy (DRE) and clean cooking across eligible member countries of both TDB and the World Bank’s International Development Association (IDA). This follows TDB’s successful funding of off-grid solar projects in the region, previously backed by a $415 million World Bank Regional Infrastructure Financing Facility (RIFF) in 2020. This allocation forms part of the IDA’s initial phase of the $5 billion Accelerating Sustainable and Clean Energy Access Transformation (ASCENT) program. ASCENT aims to bring electricity to approximately 100 million people in Africa over seven years, aligning with Sustainable Development Goal 7.
Funded by the IDA and a grant from the Energy Sector Management Assistance Programme (ESMAP), the facility will establish the ASCENT Regional Energy Access Financing Platform (REAF) under TDB’s administration. It is estimated that ASCENT REAF could offer electricity access to up to 5 million people, clean cooking access to 1 million people, and contribute up to 35MW of energy capacity to the region. Financing will be extended to distributed renewable energy and clean cooking companies through direct lending, co-financing, or on-lending via financial intermediaries, with SMEs receiving smaller loans through TDB Group’s Trade and Development Fund (TDF).
In addition to financial backing, catalytic grants will be provided to aid companies in entering new markets and piloting innovative solutions. Technical assistance, capacity building, and financial innovation development will enhance sustainability in these sectors, focusing on pipeline development, implementation tools, environmental and social aspects, climate resilience, gender equality, and innovative financing instruments. Access to electricity and clean cooking is vital for poverty reduction, education, economic growth, and health improvements in Africa, especially for women.
Admassu Tadesse, President and Managing Director of TDB Group, said “With African energy demand projected to grow rapidly alongside growth in population and incomes, there is an acute need to boost the intermediation of financing, including of concessional finance which can be leveraged to crowd-in more private capital, and make a substantial difference towards greater access to sustainable and clean energy in Africa. Together with several other strategic engagements with World Bank Group institutions, TDB Group is delighted to further elevate its partnership with the World Bank’s IDA through ASCENT which stands to bolster the efforts the Group has been deploying towards a just energy transition, including by adding low-carbon energy capacity in its markets, thereby enhancing their energy security and sustainable growth, while reducing GHG emissions.”
Boutheina Guermazi, World Bank Director for Regional Integration in Africa and the Middle East, said: “Access to sustainable, reliable, and affordable energy is at the crux of Africa’s development and poverty reduction efforts. The World Bank is pleased to build on our strong partnership with TDB Group, and we look forward to leveraging our combined efforts to unlock even more sources of financing for a host of private sector actors through the new ASCENT Regional Energy Access Financing Platform (REAF).”