The President, African Development Bank, Dr Akinwumi Adesina, who disclosed this in his keynote speech at the UK-Africa Investment Summit, said, “Huge opportunities exist for investment in renewable energy, especially for hydropower, wind, solar, thermal and geothermal.”
“But many of these opportunities can’t be realised unless we invest a lot more in project preparation to make the projects bankable,” noted the Bank President.
According to Adesina, the bank used a partial risk guarantee to support the Lake Turkana wind power project in Kenya, the largest wind power generation project in Africa, which will produce 300 megawatts of electricity.
“The African Development Bank’s €20 million Partial Risk Guarantee essentially backstopped the government of Kenya’s obligations to developers against delays in the construction of transmission lines,” he said.
Adesina further noted that the Bank was currently exploring with the DFID the use of synthetic securitisation for the sovereign portfolio of the African Development Bank.
This will be used to transfer sovereign risk to the market, working with insurers and reinsurers in the UK.
Adesina noted that the success of the project could be a huge game changer for how governments can transfer their sovereign risks on infrastructure to the market.