One of Africa’s major handicaps which is lighting, may soon find a lasting solution. Development has either remained stagnant or slow on the continent over the years with poor energy supply being pointed as a key setback. Now a multi-donor trust fund of USD 60 million called Sustainable Energy Fund for Africa (SEFA) that is to be managed by the Africa Development Bank, AfDB and supported by the Governments of Denmark and the United States of America has been put in place. The initiative is intended to support small and medium-scale Renewable Energy and Energy Efficiency projects on the African Continent. Besides the desire to ensure reliable and clean energy output in Africa through the SEFA, the projection is also that most economies can grow stronger with several jobs created thanks to the idea. For a continent like Africa that abound in sources of clean energy like abundant sunlight and other opportunities, it has been difficult to understand why the problem remain unresolved for centuries now. Funding could have been identified as one of the main hurdles, but the political will cannot be rolled out. The current effort by partner countries and the AfDB is laudable as it is yet, there will have to be more to ensure that the intended results are achieved.
The current move targets private-sectors that have in recent times proven to be veritable drivers of development and progress in Africa, partnering with governments to rich out to segments of the population that have been yearning for avenues to escape poverty and deprivation. Intrinsically, the project entails cost-sharing and technical assistance to facilitate the efforts of developers in the private sectors under what the experts call three-window financing namely: project preparation, equity investments and enabling environment. In order words, the funding is intended to enclose feasibility studies up to the closure of the projects. Another determinant factor in the initiative is that, “SEFA is structured to respond to requests originated or championed by AfDB staff.” The insistence on clean energy equally means factoring the concerns of climate change which has been at the centre of most energy problems in relation to development and the protection of the natural vegetation on the African Continent.
Thus, solar, wind, biomass, hydro as well as some geothermal and stranded gas technologies are going to be targeted by the SEFA project under a pan-African Private Equity Fund (PEF) solely focused on small/medium (5-50 MW) independent power projects.
By enabling environment, the officials point out that, “legal, regulatory and policy regimes that provide clear and predictable rules for project development, implementation and operation, capacity-building activities to allow the public sector to act as a reliable and credit-worthy counterparty in energy projects and programs,” will be welcomed. It is hoped that this may not just end up as another initiative in Africa, but serve as a veritable tonic to solving the energy problem on the Continent.