South Korea and AfDB to provide US$600m on energy projects in Africa

AFRICAThe African Development Bank (AfDB) has signed an agreement with the Korean Ministry of Economy and Finance and the Export-Import Bank of Korea, under which Korea will provide US$600 million in co-financing for energy projects alongside the Bank.

The Korea-Africa Energy Investment Framework (KAEIF) pact follows the signing on 28 May 2021 of a General Cooperation Agreement between the Bank and the South Korean government.

The KAEIF has a particular focus on renewable energy solutions in Africa, including generation, transmission, distribution, off-grid- and mini-grid, policy and regulatory reform, energy efficiency and clean cooking projects.

“The KAEIF demonstrates the close cooperation between the African Development Bank and the Republic of Korea on the development of Africa’s energy sector,” Dr Kevin Kariuki, the AfDB’s vice president for power, energy, climate and green growth, said.

“KAEIF will provide much needed additional funding, to supplement the Bank’s financing, to support accelerated energy access and the continent’s just transition to clean energy.”

KAEIF funds will also support project preparation, capacity building and knowledge-sharing activities through the Korea-Africa Economic Cooperation (KOAFEC) Trust Fund.

The Korean Ministry of Economy and Finance stressed that “similar to how the Korean Government prioritised the Green New Deal as its latest growth engine in the post COVID-19 landscape, the Facility is expected to help African countries transition to green energy while simultaneously improving access to energy.”

Korea joined the African Development Fund and the Bank’s Capital in 1980 and 1982, respectively. In 2013, the Korean government set up KOAFEC as a conduit for contributions to multi-donor and special funds managed by the Bank.

The Korean ministry said it would support new projects via co-financing the Economic Development Cooperation Fund (EDCF), the Economic Development Promotion Facility (EDPF) and AfDB.

Earlier in June, the AfDB launched a A$600 million (US$464m) Kangaroo bond, in the Australian dollar bond market. The bank said the bonds would support a range of its projects, including access to electricity and clean transportation. Have a read Here.

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