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The board of the Green Climate Fund (GCF) has approved $170.9 million in financing for the African Development Bank’s (AfDB) Leveraging Energy Access Finance Framework (LEAF) programme.

This is part of an overall allocation of $501.1 million in GCF resources for new climate projects.

The new climate projects approved will mobilise a total of $2,949 million for climate action in Africa, Asia, and Latin America, with three of the four new projects targeting support to the most vulnerable countries including least developed countries, small islands, developing states and African states.

The AfDB LEAF programme aims to unlock commercial and local-currency financing for decentralised renewable energy (DRE) projects in six programme countries: Ghana, Guinea, Ethiopia, Kenya, Nigeria and Tunisia.

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The Green Climate Fund’s financing is part of an overall $900 million programme budget whose objective is to scale up the roll-out of minigrids, solar home systems, and commercial and industrial solar solutions in the programme countries.

Tony Clamp, acting director of GCF’s private sector facility, said: “GCF is delighted to partner with the AfDB to support this timely and critical program for decentralised renewable energy across these six African countries. Green Climate Fund’s commitment will help unlock much-needed commercial capital and local currency financing to help overcome financing barriers exacerbated by COVID-19.”

How the AfDB will leverage the GCF funding through LEAF

Under LEAF, Africa’s abundant solar resources will be harnessed to provide renewable energy to six million people and businesses, and will also prevent 28.8 million tonnes in CO2 emissions over the lifetime of the systems.

By deploying credit enhancement instruments and technical assistance, LEAF will strengthen capital markets and crowd-in private sector investors, including local financial institutions.

Thereby, it will be enhancing their financial and technical capacity to finance businesses in the fast-growing DRE market segment comprising solar home systems, green minigrids, and solar solutions for commercial and industrial sectors. The programme will also provide requisite support to strengthen the enabling environment and increase private sector investment in this market segment.

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Dr Kevin Kariuki, the AfDB’s Vice President for Power, Energy, Climate and Green Growth, commented: “GCF‘s approval of LEAF is a significant boost for the African Development Bank’s twin ambitions of accelerating electricity access and supporting the transition to clean energy on the continent using decentralised renewable energy solutions, and moreover facilitated through local financing.”