The funds will support its new deal on energy for Africa, which aims to achieve universal access to electricity in Africa by 2025. The plan was born out of the Energy Week conference held in Abidjan, Côte d’Ivoire at the end of March, which brought stakeholders together to discuss methods of improving energy access.
Until relatively recently, the AfDB and other organisations regarded off-grid power provision as a stop-gap measure, designed to provide electricity to people until their homes were connected to the grid.
However, the global boom in renewable energy technologies and the growing attraction of energy self sufficiency in the West has changed the way the concept is viewed. The process is likely to accelerate when battery storage becomes cheaper and more efficient.
The scale of the off-grid ambition is demonstrated by the fact that the Bank has set a target of providing “decentralised solar technologies” – in other words, off-grid solar PV – to 75 million households and businesses over the next five years.
The change of heart is largely a function of the falling cost of off-grid solar. On-grid electrification has been a very slow process and the AfDB has recognised that off-grid solar PV kits are proving far more effective.
At present, solar panels, batteries and other components are manufactured elsewhere in the world, predominantly in Asia. They are imported in Africa, mainly in East Africa, by companies who sell them to customers. Small weekly or monthly payments are made, often by mobile phone, until the solar kit is paid off.
It is likely to sound like a gross exaggeration to many readers, but it seems likely that almost all Africans will have access to electricity within the next decade. This is because individual solar PV kits in East Africa are now as cheap as kerosene as a source of energy.
They will not yet provide sufficient electricity to power the appliances to give a Western-style standard of living, but the cost of fridges, washing machines and other appliances is still out of the reach of most African families in any case. Yet they will provide enough energy for electric light and the ability to charge mobile phones. It is often argued that the first kilowatt-hour is the most important.
The AfDB is keen to see decentralised solar PV take off in the rest of the continent, beyond East Africa, and is keen to use its financial muscle to support long-term integrated planning and hedging tools to mitigate foreign exchange risks. It can also play a role in encouraging skills development and in the longer term possibly also component manufacturing within Africa.
The big question is whether this process will be centred on national grids or far more localised mini-grids, perhaps covering just single villages.
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