AFRICA: A new financial innovation centre for renewable energy

05 07 2022 | 08:11Jean Marie Takouleu

A new partnership is being formed to accelerate access to renewable energy in developing countries, particularly in Africa. The alliance aims to support innovation in financing, the real barrier to access to electricity in Africa

The new partnership involves the Opec Fund for International Development (OFID), the United Nations Capital Development Fund (UNCDF) and the Sustainable Energy for All Initiative (SEforALL). These organisations want to set up a financial innovation centre to support access to renewable energy in developing countries, many of which are in Africa.

The centre, which is due to be launched at COP27 in Sharm el-Sheikh, Egypt, in November 2022, will identify innovative solutions to the development challenges of partner countries, including gaps in green finance and private sector investment. It will also promote innovative business models and financing instruments to find, unlock, de-risk and scale up private sector investment in energy access.

And through these models, the promoters of the future centre want to foster the implementation of new partnerships and financing mechanisms, including an energy access and transition trust fund to accelerate the deployment of available solutions.

“Designed as an end-to-end global political and financial platform, the Hub will harness the power of financial innovation to ensure maximum leverage. Every dollar of sovereign finance is expected to attract $4 of green and sustainable capital into projects in the medium term,” says UNCDF. The centre is being set up at a time when electricity access in Africa remains low. According to the African Development Bank (AfDB), 600 million Africans still do not have access to electricity.