East African nations, Tanzania and Zambia, are set to receive $322 million in financing from the African Development Bank (AfDB) to support electricity generation, transmission and clean energy access projects in the region.
Under the financing package, Tanzania will receive $282 million for the installation of high and medium-voltage submarine power cables connecting Zanzibar and the Mafia Islands to the national grid.
This initiative will increase power capacity from 143MW to 440MW, while simultaneously connecting 465,000 new consumers to the grid and providing 335,000 users with clean cooking devices.
Speaking on the development, Patricia Laverley, AfDB Country Manager for Tanzania, said, “Expanding electricity access in the country will boost youth-led MSMEs across various industries, generating a multiplier effect on job creation, while the adoption of clean cooking solutions will significantly improve the quality of life for women and girls at home by promoting alternative fuels and efficient clean cooking technologies.”
Tanzania aims to raise overall energy and clean cooking access from 46% to 75% by 2030.
The connection project is part of the AfDB’s Mission 300 Initiative to bring electricity to 300 million people in Africa by 2030.
Financing for Zambia
As part of the financing package, Zambia will receive $40 million in equity investment to develop a distributed energy platform known as Project Zafiri.
The bank estimates that over half of new electricity connections by 2030 will come from distributed energy resources and aims to connect 300 million new consumers across Africa by then.
Project Zafiri is structured as a Permanent Capital Vehicle with a targeted capitalization of $1 billion, raised through a phased approach.
Phase One targets $300 million in total commitments, equally split between junior and senior equity, with junior equity serving as a key catalyst to crowd-in private sector in this higher-risk, undercapitalized market.
“The African Development Bank’s $40 million contribution consists of $30 million in senior equity from its balance sheet and $10 million in junior equity from the Sustainable Energy Fund for Africa (SEFA), a multi-donor special fund managed by the Bank,” AfDB said in a statement.
AfDB’s Vice President for Power, Energy, Climate, and Green Growth, Kevin Kariuki, said, “Zafiri is a catalytic platform that will be an integral component of the Bank’s strategy to accelerate universal access to modern energy in Africa.
“With just five years remaining to reach Mission 300’s goal of additional 300 million connections by 2030, this initiative provides a timely and innovative solution to scale private capital for impact.”
The AfDB’s $201.4 million financing for the Rwanda Energy Sector Result-Based Financing (RBF II) program, is just another energy sector financing in the East African region.
