Norbert Barthle, Parliamentary State Secretary of the German Ministry for Economic Cooperation and Development, has urged stakeholders to help phase out fossil fuels and channel resources into renewable energy.

Norbet made this statement during the United Nations (UN) High-Level Dialogue on energy that was held in New York.

“We need to accelerate the global energy transition. This requires the rapid phasing out of all fossil fuels and a massive expansion of renewable energy. The time to act is now.”
Norbert Barthle

The German government plans to contribute €100 million to the African Development Bank’s (AfDB) Sustainable Energy Fund for Africa (SEFA).

This affirms the German government’s commitment to channel its efforts to tap into Africa’s renewable energy potential and drive its transition to clean energy sources.

The said funding will help to unlock the private sector’s investment in green-baseload projects, with priority focus on the SEFA project.

Also, the aid from the German government, will support technical assistance and investment in power generation, transmission, and distribution, to increase penetration of renewable power in African grids.

The proposed funding of €100 million follows Germany’s €50 million initial contribution to SEFA, which was made in 2020.

These funding initiatives, strategically aligns with the G20 ‘Compact with Africa’ (CwA) launched during Germany’s tenure of the G20 Presidency.

The Compact is purposed to promote macroeconomic, business and finance reform to attract more private investments in Africa.

Dr. Daniel Schroth, AfDB’s Acting Director for Renewable Energy and Energy Efficiency stated that Germany’s continuous energy support will aid Africa’s migration to clean energy.

“Germany’s new contribution is a major boost towards SEFA’s capitalization target of $500 million.”
Dr. Daniel Schroth

Germany’s support, Dr Schroth revealed, plays a catalytic role in helping SEFA to accelerate Africa’s energy transition and supporting clean energy access solutions.

The SEFA project

SEFA is a multi-donor special fund, that aims to unlock private sector investments that contributes to universal access to affordable, reliable, sustainable, and modern energy services in Africa.

This project aligns with the AfDB’s New Deal on Energy for Africa strategy and the United Nations Sustainable Development Goal 7.

SEFA provides technical assistance and concessional finance instruments to remove market barriers, build a more robust pipeline of projects and improve the risk-return profile of individual investments.

Not only has the SEFA project received support from Germany, but also from other European countries such as Denmark, Italy, Norway, Sweden, Spain, and from the Nordic Development Fund.

The United Kingdom and the United States has also been a source of great support to the SEFA project.

SEFA has, since its inception, been able to spearhead AfDB’s engagement in green mini-grids, through the Market Development Program and country-focused enabling environment support.

These engagements paved the way for the first two AfDB’s supported scale-up programmes in the Democratic Republic of Congo and Burkina Faso.

Also, SEFA played a significant role in the preparations and provided financial support towards the Africa Renewable Energy Fund.

The Africa Renewable Energy Fund is one of the first pan-African equity funds for renewable energy which reached $200 million capitalization in 2014.

Additionally, SEFA assisted in establishing the Facility for Energy Inclusion, a pan-African debt financing platform for small-scale renewables, which was able to mobilize $250m by end of 2019.