Africa Banking Economy Energy Finance Government Infrastructure Mozambique

AfDB approves 3rd sovereign instrument & Mozambican wind farm

The Board of Directors of the African Development Bank Group (AfDB) has approved the bank’s third sovereign lending instrument called the Results-Based Financing (RBF) policy.

The RBF will be the bank’s third financing instrument to complement the two existing instruments, namely investment lending and programme-based operations (PBOs). The RBF is an additional, innovative, financing instrument that supports government-owned programmes and links disbursements directly to the achievement of programme results.

The approval of the RBF policy comes at a critical juncture where countries are increasingly harnessing resources for structural transformation and seeking financing and expertise from development partners, in flexible ways, to improve the effectiveness and efficiency of their development programmes.

The policy will, therefore, enhance the bank’s responsiveness to such growing demands from its clients. It will also sharpen the bank’s results focus and help scale up financing in the high five priority areas recently adopted by the institution.

In so doing, the bank will increase accountability and incentives for delivering and sustaining results, while promoting institutional development and enhancing development effectiveness concurrently.

The bank will embark on the development of a solid pipeline of RBF operations, carefully selecting priority government programmes that will deliver ambitious results in regional member countries. In the coming year, the Bank will enhance dialogue with countries in order to scale up RBF financing.

Also, the African Development Bank-managed Sustainable Energy Fund for Africa (SEFA) has approved $985,000 to Parque Eólico da Namaacha S.A SPV, to support project preparation activities for a utility-scale wind farm project in Mozambique.

The project will provide reliable and clean power to the grid-connected population and industries in Maputo Province add 60 Mega Watt peak power to the grid and expand transmission capacities. Further, SEFA aims at rendering the project a replicable wind farm reference for the Southern Africa Region.

The intervention will trigger bankability and financial close of what will likely be the first utility-scale wind farm in Mozambique, contributing to reducing the significant peak-load gaps exhibited by the grid in Southern Maputo Province.

Source: The Nation

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