When the African Development Bank triples its capital base to $100-billion next week, the top priority will be tackling Africa’s dire power shortages, the bank’s president said on Sunday. Infrastructure will make up about 60% of the bank’s projects and 60% of those will be for power, AfDB president Donald Kaberuka told Reuters in an interview ahead of the bank’s annual assembly on Monday in Abidjan.
"If you take the whole continent, the energy we have is less than Spain," he said. "There’s no way this continent can grow, living on energy less than Spain."
Projects included a wind farm in remote northern Kenya, and hydropower projects in several places, but would also include coal and gas-powered plants.
"Because of the power deficit, we are prioritising all forms of energy. Some are renewables, but there’s no either/or," he said. "The pipeline is enormous."
Per capita consumption of power in Africa is 400kw/h per person compared with 14,000kw/h in developed countries, he said, adding the bank aimed to redress the problem especially now the financial crisis had largely passed. The bank’s member states will vote on the proposal by finance ministers to triple its capital base on Thursday, but Kaberuka said it was largely a formality.
"The recommendation by African ministers is unanimous," he said. "It’s timely. It’s a vote of confidence in Africa. It should give us the firepower we need to meet structural concerns, which are largely about infrastructure." Other infrastructure projects include a big undersea internet cable between Nigeria and Portugal. The bank would also boost lending to low-income countries with virtually no access to capital markets by funding the private sector in those countries.
Stability of the financial system was also paramount, after the shock of the global financial crisis last year, he said, and he praised moves by Nigeria’s central bank to rescue ten of its banks from bad debts. "The regulators took action swiftly. That kind of supervision is what I consider important," he said. The AfDB said in December it would lend about $7-billion to African governments and firms in 2010, down from an estimated $10-billion last year when loan programmes were boosted in response to the financial crisis. The AfDB’s shareholders are Africa’s 53 nations and 24 non-African donor countries. Much of its lending to poorer countries is at concessionary rates, largely financed by Western donors.
One of its most significant loans last year was $1,5-billion in emergency budget support to Botswana after the collapse of the price of diamonds, the southern African country’s main export.