The African Development Bank has this week secured $52.5 million in funding from the Green Climate Fund for Zambia’s Renewable Energy Financing Framework which will seek to finance 100 megawatts (MW) of renewable energy.
The funding was approved at the 19th Board Meeting of the Green Climate Fund (GCF) held in Songo, South Korea this week. The GCF is a fund that was adopted by 194 governments as a financial mechanism of the United Nations Framework Convention on Climate Change at the end of 2011, with a goal to limit or reduce greenhouse gas emissions in developing countries and help adapt vulnerable societies to the already-felt impacts of climate change.
The new funding will aim to finance 100 MW of renewable energy projects under the Renewable Energy Feed-in-Tariff (REFiT) policy of Zambia, which was launched in 2017 in an effort to crowd-in private investments for small-scale renewable projects up to 20 MW in size. The funding, comprised of $50 million provided by the GCF as a loan and $2.5 million as a grant, will go to support primarily solar projects focused on diversifying Zambia’s energy production, which is currently heavily reliant on hydroelectricity.
This reliance on hydroelectricity is not inherently a problem, but when you add in the fact that the region is encountering recent droughts, it results in serious electricity supply deficits.
“This is a significant first fruit of our joint commitment for development and growth in Africa that aligns with the Paris Agreement” said Akinwumi Adesina, President of the African Development Bank. “We look forward to partnering further with the Green Climate Fund to help increase Africa’s share of climate finance.”
“This innovative project represents an important and fitting milestone in our partnership with GCF,” added Amadou Hott, Vice President for Power, Energy, Climate and Green Growth at the African Development Bank. “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.”
Zambia has recently made headway in bolstering its renewable energy future. In early December Zambia’s government launched the first round of its GET FIT Zambia program — the official implementation program of its REFiT policy. A 100 MW tender for solar PV projects up to 20 MW is set to launch early this year, with the hopes of using the policy to secure 200 MW of small- and medium-scale renewable projects.
Additionally, Zambia secured an International Development Association (IDA) $2.8 million guarantee from the World Bank Group to support the country’s desire to increase its solar PV electricity capacity. Specifically, the $2.8 million guarantee will leverage around $48 million in private sector-led investment to support the development of a 34 MW solar PV project being developed by Ngonye Power Company Limited.
“The Ngonye project will increase and diversify Zambia’s renewable energy generation capacity and support government’s objective of diversifying the electricity generation mix to shield the country from climate-induced shocks,” said Ina Ruthenberg, World Bank Country Manager for Zambia in December.