Gabriel Negatu, The African Development Bank regional director-general spoke to The EastAfrican's Allan Olingo on how the region will benefit from the Japan-Africa Energy Initiative to support the New Deal on Energy for Africa.
What is the new $6 billion energy deal with Japan all about?
We seek to support the small and medium players who want to join the regional energy sector under Japan’s Light up and Power Africa initiative which aims to enable regional countries achieve universal access to energy by 2025, using available energy sources and the most advanced technologies.
These funds are a mix of concessional, non-concessional and grant.
The AfDB will take the lead in project development in consultation with regional member countries but within the initiative’s guidelines.
What will be the role of Japan and AfDB in the programme implementation?
Apart from providing the funds, Japan will provide technical support for the implementation. The bank, on the other hand, will accept, audit and disburse the project funds. We will also supervise these projects through our teams across the continent.
Some of the activities to be supervised will range from project preparation to infrastructure construction and operationalisation.
Are we going to see the infusion of Japan’s energy technologies into the region’s energy projects through this initiative?
That is welcome but it won’t be a pre-condition. For example, we will welcome their technology on clean coal energy since we have had serious concerns on how to handle coal plants.
A good example is the proposed Lamu coal plant that has seen environmentalists voice concerns. If we can adopt clean technologies from our Japanese counterparts to address this, then that will be welcome.
Since this is one of the Tokyo International Conference on African Development (TICAD-VI) pledges made in Nairobi in 2016, will we see more energy projects financed and supported by the government of Japan?
The Initiative will support the full range of activities associated with public and private sector energy projects, ranging from preparation to construction and operations, through a mix of financing and technical assistance.
We will not give any sector undue priority but will support all. The goal will be achieved, either through public or private sectors.
We hope that through this initiative, we will accelerate the provision of electricity across Africa, including through the best available low-emissions clean coal technologies.
Will there be preference for the type of energy projects to be financed, on account of their impact on the environment?
Outside of nuclear projects, we will look at all projects, including the controversial coal-powered. We believe that through environmental impact assessment, some of the concerns about these projects will be addressed.
But we will also undertake due diligence on them so that we fund projects that will not only add value but also enjoy the support of the locals and agencies meant to audit them.
We will provide assistance to projects ranging from high-efficiency coal-fired power plants utilising clean coal technology that helps curb carbon dioxide emissions to the construction of geothermal power plants, solar power projects and even wind-powered ones.
One of the biggest challenges in the region is electricity distribution. Even after the energy projects are done, there still exist weak distribution networks, reversing any progress made. Will the programme address this?
Yes it will. One of the objectives of this partnership will be capacity building. The grant element will support electricity distribution agencies to become more efficient.
For example, at the Lake Turkana wind power project in Kenya, which we supported, capacity to transmit the energy has been constrained. As we study the project proposals, we will ensure that all the aspects of construction, generation and distribution are watertight, so as to achieve our main objective.
East African countries have different energy deficit levels. Will we see AfDB favour countries like Burundi and Rwanda, which have higher deficits are larger than the rest?
I do not think we will favour any country but will encourage those with bigger deficits to propose more energy projects for funding.
We will encourage public-private partnerships and independent power producers who would like to invest in these countries. This will give us a greater variety of bankable project proposals to scrutinise, audit and, if successful, fund.
The AfDB has increased its focus on Kenya’s energy sector recently, seeking to bring down the cost for customers. How is this going?
We have supported the Menengai geothermal power project through a $503 million financing and, in June, we announced a $135 million loan for the second phase of the Last Mile Connectivity initiative in Kenya. We are doing this to improve access to, and availability of, power.
We are happy to report that the cost of power is coming down. In this new programme with Japan, we will also be keen on the cost element.
It will not make a difference to residents if we do not finance projects that address affordability. Therefore, while vetting the project proposals, we will insist that they meet the requirement for affordability.
When do we expect this programme to be implemented?
Implementation starts a few weeks before the end of this year. Those interested should contact the AfDB offices in the respective countries to be guided on how to submit proposals.