UNLEASHING AFRICA’S POTENTIAL, IN ‘PRIVATE’

that can mobilise investment, drive economic growth, and promote environmental and social sustainability,” explains Sarvesh Suri (left), Regional Industry Director with the organisation.

Suri calls upon a multi-pronged approach to ignite this much-needed interest, innovation and expenditure.

fiscal constraints of governments, PPPs that can crowd-in private sector solutions, innovation, and finance are becoming a key tool to meeting the Paris Agreement goals. PPPs also enable consistency across value chains and provide a platform from which both public and private sector stakeholders tion pathways.”

Advancing Economic Development

“Although much progress has been made to increase access to energy across the continent, in sub-Saharan Africa today there are almost 600m people who still do not have access to electricity and 970m people who do not have access to clean cooking options,” Suri states.

Tin sub-Saharan Africa needs to triple in order to achieve universal access by 2030, and the private sector will be absolutely pivotal in helping to realise that aim.

This is due to the simultaneous need to decarbonise the continent’s energy makeup. Simply, heightened access needs to be conducted in a climate-responsible manner. For this to happen, innovative projects are required, and – vitally – so is much-needed funding from private operators.

“Our role as the International Finance Corporation (IFC) is to work with the private sector to make this a reality, through projects and programmes

First comes regulatory action and support to governments, to develop clear policies that would help to uplift underperforming utilities, and to strengthen overall planning levels. remove distortive subsidies, and tackle country and current infrastructure.

“Then comes technological, commercial and financial innovation from within the private sector,” adds Suri. “By leveraging its instruments, the private sector can catalyse investments at scale in clean energy, in hydrobattery storage. All of which are critical resources to unleash sub-Saharan African countries’ renewable potential while maintaining security of supply.”

Third, comes the importance of public-private partnerships (PPPs).

Suri continues: “Given the increased

As a member of the World Bank Group and the leading global development institution focused on private sectors in developing countries, the IFC is primely placed to tackle this situation en route to a more attractive and productive energy sector in Africa.

The aim first and foremost is to advance economic development through this lens of energy, which also incorporates consideration around market creation, mobilising investors, sharing expertise, generating jobs, raising living standards and ultimately, ending poverty. As such, over the past 25 years, IFC has invested more than $67bn into Africa, with its portfolio (as of June 2022) exceeding $13.4bn.

Initiatives that have been championed to this point span three innovative and enabling solutions, in the form of mini-grids, distributed access through renewable energy scale-up (DARES), and on-grid renewable energy generation.

The former “is a new IFC programme that is focused on increasing private investment in mini-grid services in sory support as well as investment and risk mitigation instruments for governments and the private sector,” Suri explains. “This programme will bene- frameworks and fragmented markets. For example, in 2022, IFC launched its programme in the DRC where it is working with the government to bring 180 MW of clean power to 1.5m people across two cities.” mini-grids, off-grid solar markets, systems for schools and health facilities, solar irrigation and cold chain for farmers, and innovative business models to displace diesel generation and improve access reliability,” Suri continues.

This project in the DRC also features kind minimum revenue guarantee that de-risks and unlocks further private investments in the space.

Additional innovation can be seen through its DARES platform launched at COP27 alongside the World Bank Group, which aims to accelerate the pace of electrification in Africa to achieve universal access by 2030.

Meanwhile, regarding on-grid generation, “IFC continues to lead the financing of renewable and clean energy generation, transmission, and distribution services by private sector developers.”

Truly Transformational

IFC’s work is underpinned by clear strategy and multi-pronged objec-

KPIs. Suri notes that the overall work approach laid out is epitomised by he says. “An example of this approach includes the $1.3 bn, 420 MW Nachtigal hydropower project in Cameroon. InfraVentures, an upstream unit of IFC developing bankable projects, helped develop and structure the project in its early stages, in collaboration with the government of Cameroon, spending $13m of IFC’s own development capital. This project is now IFC’s largest power investment in Africa. to address Africa’s infrastructure gap by providing and mobilising vast truly transformational projects across the continent.”

In addition to investments, IFC’s value addition lies in its ability to provide advisory support to governments and private sector entities in Africa, as they develop projects and attract investments. IFC’s advisory has been critical in helping African governments attract private sector investment in infrastructure projects, which is essential for addressing the continent’s significant infrastructure gap. Services cover a wide range of areas, including project preparation, regulatory frameworks, and identifying, structuring, and implementing PPPs.

Finally comes the ability to not just innovate, but create markets. Suri cial structures for the development of nascent and non-existent infrastructure markets in Africa. Our projects aim to that can mobilise private sector investment and drive economic growth while also promoting environmental and social sustainability.” hydropower. This includes transformational projects like the Bujagali and Nachtigal hydropower plants in Uganda solar power plants in Zambia, Mozambique and Burkina Faso; as well as the in South Africa. In 2022 alone, IFC committed $2.1bn to advance Africa’s green transition, from increasing access, energy projects.

Suri adds: “We are now piloting the deployment of more emerging transformative technologies such as initiatives that proved that renewable energy is a commercially viable option in emerging markets. We work with our promote early adoption of these newer ing the increased risks of these emerging solutions.”

Regarding innovative financing, financing instrument to incentivise companies to achieve sustainability impact by tying pricing to measurable goals, such as a reduction in corporate GHG emissions, through interest rate step-ups or step-downs.

“Finally, we are exploring the creation of hydrogen hubs, combining renewable energy generation with green hydrogen production, transport, storage, and local or international use,” Suri concludes. “Such and technical insights for hydrogen development in Africa, helping to de-risk new projects.

“We want to oversee infrastructure development that provides capital, but that also builds the requisite government capacity to identify and prepare projects and attract private sector investment in a sustainable manner,”

Looking To The Future

multiple renewable energy projects across Africa, spanning solar, wind and

“As we build relationships with clients and industry leaders, IFC is looking to the future, identifying new opportunities to scale up the use of hydrogen as a power source in line with public policies and private sector interests.”