The continental bank’s board approved a $7.88 million grant (P105 million) to the Africa Energy Transition Catalyst (AETC) programme, which aims to increase renewable energy generation across the continent.
“The AETC programme sets out to conduct a regional market study to facilitate the export of renewable energy from Botswana and Namibia as part of the two to five-gigawatt mega-solar initiative,” the AfDB said in a statement. “Additionally, it aims to advance the ZiZaBoNa regional transmission interconnector development by updating feasibility and Environmental Social Impact Assessment studies while providing project structuring advisory support.”
The mega solar project will be Southern Africa’s largest solar power project and the first of its kind on the continent, involving collaboration between two countries and multiple continental and international agencies and partners.
Botswana, Namibia, the AfDB, as well as the International Finance Corporation and the International Bank for Reconstruction and Development, signed a Memorandum of Intent towards the project in April 2021. The deal is underpinned by Power Africa, a US-government entity aimed at boosting electricity investment in Africa and which has closed 141 power agreements worth more than $22 billion since its launch in 2013.
The Memorandum of Intent was designed to allow financing of the feasibility study into the deal, amongst other provisions, while also providing a launchpad for the funding of the actual project.
“The first phase of the mega solar initiative centres on the competitive procurement of 300 to 500 megawatts of solar power in Namibia and Botswana,” the AfDB said this week. “Once regional transmission lines are constructed, this will catalyse the procurement of additional generation that can supply low-cost renewable energy to neighbouring countries.”
The AfDB’s support of a regional market study will breathe life into the mega solar project, as it builds momentum.
President Joseph Biden has thrown his administration’s weight behind the mega-solar, announcing in April 2021 that it had been selected as a project to support. The announcement was made at Biden’s two-day Leaders Climate Summit which brought together 40 Heads of State to commit to various climate-related goals.
“This revolutionary mega-solar project has the potential to bring renewable solar power to hundreds of thousands of homes and businesses in Botswana in the next two decades,” a previous statement from the US Embassy in Botswana reads. “The project could transform Botswana from a net importer and consumer of unreliable coal power to a significant producer and exporter of renewable solar power, while also reducing Botswana’s carbon footprint.”
The latest developments come as the US' International Development Finance Corporation steps up its search for investment opportunities in areas such as renewable energy and others, in the region. The corporation’s CEO, Scott Nathan, led the US government delegation to the US-Africa Business Summit which ended in Gaborone on Friday.
