The World Bank has granted nearly $300 million to the Eastern and Southern African Trade and Development Bank (TDB) to enhance distributed renewable energy (DRE) and clean cooking ventures within the private sector in nations eligible under the World Bank’s International Development Association (IDA) that are also members of TDB.
This funding follows TDB’s earlier achievements in backing pioneering off-grid solar initiatives in its region through a notable $415 million allocation from the World Bank’s Regional Infrastructure Financing Facility (RIFF) in 2020.
This initiative forms part of the initial stages of the IDA’s $5 billion ‘Accelerating Sustainable and Clean Energy Access Transformation’ (ASCENT) scheme, aiming to extend electricity access to nearly 100 million individuals in Africa over the forthcoming seven years and assist in meeting SDG 7.
Additional components of this phase include the ASCENT COMESA Regional Acceleration Platform, managed by the COMESA Secretariat, alongside programmes in four pioneering countries chosen as ASCENT representatives due to their varied energy access levels and regional contexts.
The support is backed by IDA funds and a contribution from the Energy Sector Management Assistance Programme (ESMAP). With the funds provided to TDB, the ASCENT Regional Energy Access Financing Platform (REAF) will be set up and executed. The ASCENT REAF is anticipated to enable electricity access for approximately 5 million people, enhance clean cooking facilities for around 1 million individuals, and contribute up to 35MW of energy capacity in the area.
Financing will be available for DRE and clean cooking firms through direct loans, co-financing, or on-lending via financial intermediaries, with smaller loans for SMEs through the TDB Group’s Trade and Development Fund (TDF).
Additionally, performance-based grants will be offered to assist businesses in entering new markets, trialling new innovations, and fostering sector growth. This is alongside technical support, capacity enhancement, and the introduction and testing of financial innovations for TDB, TDF, and their clients to boost the sustainability of their DRE and clean cooking initiatives.
Special emphasis will be on developing pipelines, implementation resources and technology, environmental and social considerations, climate resilience, gender issues, and novel financing mechanisms.
Recent global challenges and economic difficulties have hindered progress in human development indices and electrification rates in Africa. Electricity is crucial for the region’s poverty reduction and sustainable development, enabling children’s education, fostering inclusion, and empowering the private sector—including MSMEs and large corporations—to create employment, stimulate economic growth, and promote innovation and industrial advancement.
Furthermore, access to clean energy, particularly for cooking, is essential for reducing indoor air pollution and enhancing productivity and health outcomes, especially among women.
Admassu Tadesse, TDB Group President and Managing Director said, “With African energy demand projected to grow rapidly alongside growth in population and incomes, there is an acute need to boost the intermediation of financing, including of concessional finance which can be leveraged to crowd-in more private capital, and make a substantial difference towards greater access to sustainable and clean energy in Africa. Together with several other strategic engagements with World Bank Group institutions, TDB Group is delighted to further elevate its partnership with the World Bank’s IDA through ASCENT which stands to bolster the efforts the Group has been deploying towards a just energy transition, including by adding low-carbon energy capacity in its markets, thereby enhancing their energy security and sustainable growth, while reducing GHG emissions.”
Boutheina Guermazi, World Bank Director for Regional Integration in Africa and the Middle East said, “Access to sustainable, reliable, and affordable energy is at the crux of Africa’s development and poverty reduction efforts. The World Bank is pleased to build on our strong partnership with TDB Group, and we look forward to leveraging our combined efforts to unlock even more sources of financing for a host of private sector actors through the new ASCENT Regional Energy Access Financing Platform (REAF).”
