Supercharging Africa’s Power Grids

There are 600 million people and 10 million small businesses in Africa that lack access to reliable electricity—startling numbers given the continent’s large reserves of natural gas and wealth of hydroelectric and other renewable power resources.

To catch up with demand, Africa needs to increase its power generation capacity by 6-7 gigawatts a year—nearly 10 percent of the current total capacity and seven times the current growth rate. Doing so will require private sector expertise and financing.

One of IFC’s main priorities is to increase the reach and reliability of electric grids across Africa and in other emerging markets where poor coverage continues to drag on economies and livelihoods. As part of the World Bank Group, we are working with governments, utilities, private companies, commercial banks, and investors to develop solutions for power markets that are innovative, sustainable and financially viable.

IFC has arranged more than $3 billion in financing for infrastructure projects in sub-Saharan African in the last three years, including large-scale power investments that have brought solar, wind, and efficient energy generation to new markets across the continent.

In some cases, IFC investments have helped countries generate power more efficiently, such as with upgraded gas-fired power plants in Cote d’Ivoire. In others, IFC-led financing has helped countries scale up renewable energy technologies—for instance with the large-scale Khi, Kaxu and Xina Solar One concentrated solar power plants and the Amakhala wind project, which are helping South Africa diversify its energy mix away from coal. Concentrated solar power, or CSP, uses mirrors to reflect and concentrate rays of sunlight to heat steam that powers turbines. South Africa is among the first adopters of the technology.

The World Bank Group’s Scaling Solar initiative aims to help other countries in Africa build on South Africa’s momentum, offering an integrated package that aims to reduce the time it takes to deliver solar installations to the market, stimulate competition, and lower tariffs to customers. Scaling Solar will help smaller African countries enjoy the purchasing power of bigger and more developed economies—allowing areas that still rely on diesel-fired power to benefit from recent dramatic cost reductions in solar technology.

Innovative financing tools are also helping countries develop hydroelectric projects that have tremendous potential to boost Africa’s power capacity. IFC’s $150 million InfraVentures fund can support early-stage infrastructure projects in frontier regions, where private sector investors may be hesitant to join. The Kenié hydropower plant in Mali, with InfraVentures support, is expected to boost the West African country’s energy capacity by more than 10 percent.

IFC’s expertise in the oil and gas sector, and strong track record in environmental and social standards, is also relevant as countries such as Mozambique and South Africa seek to develop their natural gas reserves in a way that benefits the continent and its people.

In addition, IFC continues to support off-grid projects that bring power directly to unconnected households in rural and remote areas. IFC has organized financing for Off Grid Electric, a company in Tanzania that provides power to homes in a “solar as a service” model. Using mobile payment technology, Off Grid Electric allows people to pre-pay for energy just as they would for using a cell phone. IFC’s financing will provide the working capital the company needs to connect about 100,000 homes.