Green Climate Fund approves US$170.9m in co-financing for AfDB’s Leveraging Energy Access Finance Framework program

AFRICA – The Board of the Green Climate Fund (GCF) has approved US$170.9 million in financing for the African Development Bank’s Leveraging Energy Access Finance Framework (LEAF) program which aims to unlock commercial and local-currency financing for decentralized renewable energy (DRE)  projects in six program countries: Ghana, Guinea, Ethiopia, Kenya, Nigeria, and Tunisia.

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

Tony Clamp, acting Director of GCF’s Private Sector Facility, said, GCF is delighted to partner with the African Development Bank to support this timely and critical program for decentralized 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.”

Under LEAF, Africa’s abundant solar resources will be harnessed to provide renewable energy to 6 million people and businesses and will also prevent 28.8 million tonnes in COemissions 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 enhancing their financial and technical capacity to finance businesses in the fast-growing DRE market segment comprising of solar home systems, green mini-grids, and solar solutions for commercial and industrial sectors.

The program will also provide requisite support to strengthen the enabling environment and increase private sector investment in this market segment.

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

Tony Clamp – Ag Director, GCF

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 decentralized renewable energy solutions, and moreover facilitated through local financing,”  said Dr. Kevin Kariuki, the African Development Bank’s Vice President for Power, Energy, Climate and Green Growth.

The  Incheon, South Korea-based Green Climate Fund is a fund established within the framework of the UNFCCC as an operating entity of the Financial Mechanism to assist developing countries in adaptation and mitigation practices to counter climate change.

The Green Climate Fund (GCF) Board also allocated US$ 501.1 million in GCF resources in July 2021 for new climate projects at its twenty-ninth meeting and taken significant steps to strengthen results management for its growing portfolio.

The four new climate projects approved during the meeting will mobilize a total of US$ 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 Island Developing States, and African states.

The newly approved projects and programs increase the GCF total portfolio to USUS 8.85 billion, worth US$33.2 billion including funding from all sources. 

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