The power sector in Sub-Saharan Africa and other low-income regions is largely underdeveloped in terms of installed capacity, access to energy, and per capita consumption. The amount of installed capacity cannot always meet demand, and power shortages are holding back economic growth and job creation. 79 percent of businesses in Sub-Saharan Africa experience electrical outages and 53 percent depend on generators to meet their electricity needs. 40 percent of businesses report that access to energy is a major operational constraint.
An additional 300 GW of capacity will be needed to meet Sub-Saharan Africa’s expected demand for electricity by 2040. This will require an investment of more than USD 490 billion. To contain growth in emissions, this new capacity must come mostly from clean energy sources. At present, the proportion of renewable energy in Sub-Saharan Africa’s power sector is below 50 percent.
Link to SDGs
Norfund’s investments in clean energy are helping to achieve the following targets of the SDGs:
7.1: "By 2030, ensure universal access to affordable, reliable and modern energy services" and
7.2: "By 2030, increase substantially the share of renewable energy in the global energy mix"
Norfund’s impact objective is threefold; increasing the supply of energy, increasing the share of energy from renewable sources, and increasing access to energy. Doing so leads to economic growth, job creation, and improved living standards.
- Increased energy supply: In 2018, Norfund’s clean energy portfolio included 30 active power plants. Two of these plants were connected to the grid in 2018, adding 310 MW to the grid in Kenya and 35 MW to the grid in Honduras. The total amount of energy capacity in our portfolio is now 4,100 MW. The power plants produced a total of 17.4 TWh of electricity, an amount equivalent to the combined energy consumption of Uganda, Tanzania and Kenya. 64 percent of the power was produced in Sub-Saharan Africa, and 40 percent was produced in Least Developed Countries.
- Increased share of energy from renewable sources: A total of 2,800 MW of the electricity capacity in our portfolio was renewable energy sources, such as hydro, wind and solar – 68 percent of the total energy capacity. Together, the renewable power plants have prevented 6 million tonnes of CO2 emissions compared to standard national grid emissions.
- Increased access to energy: Nearly 2.4 million units of solar-powered solutions were sold in 2018 to household clients, which has increased access to energy in off-grid areas in Sub-Saharan Africa.