African Development Bank Backs Framework To Increase Grid Investment Financing

The African Development Bank Group and several other national and international institutions have endorsed a framework to boost access to climate finance for grid investments.

The decision emerged at a ministerial panel session at COP30 in Belém, Brazil, titled: “Accelerating Action on Grids and Storage: Planning, Financing, Principles and Policy Solutions”, and organized by the International Renewable Energy Agency (IRENA), the Global Coalition for Energy Planning (GCEP), the Utilities for Net Zero Alliance (UNEZA), the Sustainable Business COP (SBCOP), and the Green Grids Initiative (GGI).

Joining the Bank Group to endorse the newly-developed set of six “climate finance principles for grids” were the Inter-American Development Bank, British International Investment, the East African Development Bank, Climate Bonds Initiative, the Institutional Investors Group on Climate Change, the Asia Investor Group on Climate Change, the Global Renewables Alliance, GridWorks, the Utilities for Net Zero Alliance, and the Government of the United Kingdom.

According to industry experts, power grids and storage systems are the pillars of clean-energy transition growth, determining its pace and reliability; and there is no transition without transmission.

Yet, around the world, these systems are under severe strain, and the demand for grid capacity continues to rise faster than the expansion of infrastructure, amid the intensifying challenges of climate-related disruptions.

Also, the integration of renewable energy—combined with growing demand linked to electric vehicles, clean heating and cooling, data centers, and new industrial uses—adds pressure on electricity transmission and storage systems.

“It is crucial to increase climate-finance flows toward transmission projects. In this regard, I am pleased to announce the African Development Bank’s support for the climate-finance principles developed by the Global Green Grids Initiative,” said panellist Daniel Schroth, Director of the Renewable Energy and Energy Efficiency Department at the African Development Bank Group.

Sub-Saharan Africa alone faces a shortfall of 150,000 km of transmission lines, and in South Africa alone, at least 1,500 km of new transmission lines are required each year.

The continent, therefore, has “considerable and largely untapped renewable-energy potential” whose exploitation would require “substantial investments in grids and storage,” Schroth emphasised.

Panellists highlighted that in many emerging and developing countries, limited financing, regulatory fragmentation, and high perceived risks continue to delay the development of critical transmission and storage infrastructure. They also noted that investments in these countries have not kept pace with growing electricity demand nor with the rapid deployment of renewables.

Participants noted that it is now an “urgent priority” to strengthen the policy, financial, and regulatory environments to plan, build, and operate modern grids.

Schroth emphasised the importance of mobilising the private sector and scaling “proven blended-finance mechanisms, such as the African Development Bank Group’s Sustainable Energy Fund for Africa (SEFA).”