AfDB Approves First Partial Risk Guarantee for Renewable Energy Project
2 October 2013: The Board of the African Development Bank (AfDB) has approved the first African Development Fund (ADF) Partial Risk Guarantee (ADF PRG), signaling a major step in improving investment opportunities for renewable energy in Africa.
As investor risk is seen as one of the major barriers to increasing investment in renewable energy in developing countries generally, the €20 million Lake Turkana Transmission Line Delay Partial Risk Guarantee, which will shield private investors and lenders from possible government failure to meet contractual obligations, is seen as an important milestone in addressing renewable energy investment deficits in Africa.
The guarantee will support the Lake Turkana Wind Power Project in Kenya, which will be Africa's largest wind power project. At 300 MW, it will increase Kenya's installed energy capacity by 17 percent. The PRG will alleviate risk associated with construction of a publicly owned 428km transmission line. Since 2009, the AfDB has led the development of the wind project and also provided a €115 million loan. [AfDB Press Release]