Green Climate Fund (GCF) board members have approved the African Development Bank’s (AfDB’s) funding proposal for Zambia’s Renewable Energy Financing Framework (REFF).
Established in 2010 by 194 countries of the United Nations Framework Convention on Climate Change, GCF supports developing countries responding to climate change.
Under the agreement, the GCF will provide a loan of $50m and a grant of $2.5m for Zambia’s renewable energy projects.
REFF will focus on financing 100MW renewable energy projects in Zambia under the Renewable Energy Feed-in-Tariff (REFiT) policy.
Last year, the Zambian Government introduced the REFiT policy to encourage private investments for small-scale renewable projects up to 20MW.
The primary objective of the government behind introducing the REFiT policy was to overcome an electricity supply deficit created by recent droughts.
AfDB president Akinwumi Adesina said: “This is a significant first fruit of our joint commitment for development and growth in Africa that aligns with the Paris Agreement.
“We look forward to partnering further with the GCF to help increase Africa’s share of climate finance.”
Through the financing framework, the government will focus on the development of solarpower projects in order to diversify the country’s heavy dependence on hydroelectricity.
It is reported to be the first programme that has been co-financed by GCF and the AfDB after two institutions, signed an Accreditation Master Agreement in November last year.
AfDB Power, Energy, Climate and Green Growth vice-president Amadou Hott said: “This innovative project represents an important and fitting milestone in our partnership with GCF.
“Not only do the projects pave the way for providing clean, sustainable energy to around 300,000 people, through diversifying Zambia’s energy mix. It will also make the country more resilient to the effects of climate change.”