Africa is home to abundant extractive resources bearing significant potential for industrial growth, yet 600 million Africans still lack access to reliable electricity. As the continent seeks to harness these resources for energy security, development finance institutions (DFIs) will play a vital role in mobilizing capital – attracting both public and private sector investments and serving as an intermediate between investors and project developers – as well as creating an enabling environment, mitigating risk, building technical expertise and providing policy and regulatory support.
African Development Bank
The African Development Bank (AfDB) is a multilateral DFI consisting of the African Development Bank, African Development Fund and Nigeria Trust Fund. The AfDB’s mission is to reduce poverty and improve living standards in Africa by promoting investment in socioeconomic development projects. The Bank offers loans, equity investments and technical assistance to project developers, focusing on infrastructure sectors such as energy, water, sanitation, transport and communications. Ongoing energy sector initiatives include the Desert-to-Power project, which aims to accelerate economic growth in the Sahel region through large-scale solar technology deployment, and the African Green Bank Initiative, a pan-African platform aimed at creating a network of green banks across the continent.
African Export-Import Bank
The African Export-Import Bank (Afreximbank) operates under the mandate of financing and promoting intra- and extra-African trade, seeking to transform Africa’s trade structure and boost industrialization. As a key supporter of the African Continental Free Trade Agreement, Afreximbank launched the Pan-African Payment and Settlement System in 2022, enabling cross-border payment transactions across Africa. In the energy sector, Afreximbank is collaborating with the African Petroleum Producers Organization to establish the African Energy Bank, which was signed into implementation earlier this month and aims to improve access to financing for oil and gas and sustainable energy projects across the continent.
West African Development Bank
The West African Development Bank (BOAD) serves as the DFI for West African Economic and Monetary Union (WAEMU) member states. In the energy sector, BOAD focuses on promoting energy transition initiatives, developing regional and cross-border interconnections and improving access to electricity, targeting mini- and off-grid solutions for rural communities. BOAD has constructed over 3,500 km of interconnection lines among WAEMU member states and strengthened regional power production, transport and distribution networks. By March 2023, total energy sector financing from BOAD had reached approximately $2 billion. The Bank is currently funding a 30 MW solar plant in Senegal, slated for completion by 2025.
Africa Finance Corporation
The Africa Finance Corporation (AFC) is a pan-African DFI that aims to reduce Africa’s infrastructure deficit through technical expertise and early-stage capital for heavy industries, natural resources, power and infrastructure projects. Notable projects include a total $300-million investment in two projects in Nigeria – the 650,000-barrel-per-day Dangote Refinery and 2.8-million-ton-per-annum urea fertilizer plant – and a $35-million investment in Alufer Mining’s bauxite mine in Guinea-Conakry, with a production capacity of 5.5 million tons per year.
Development Bank of Southern Africa
The Development Bank of Southern Africa (DBSA) is a state-owned South African DFI mandated to promote economic growth and regional integration for sustainable development across Africa. DBSA supports the development and funding of power generation, transmission, distribution and associated technologies and is a leading financier of renewable energy, committed to a just energy transition in Africa. DBSA’s projects include a $100-million investment in expanding Angola’s Port of Namibe, as well as rehabilitating its Port Sacomar, to help stimulate regional trade and diversify Angola’s economy. DBSA has also supported three solar photovoltaic projects in South Africa — Sirius 1, Dyason’s Klip 1 and Dyason’s Klip 2 — each with a capacity of 86 MW, collectively producing 217 GW annually.
