World Bank to allocate $5bn to provide electricity for 100m Africans
The World Bank has unveiled its commitment to allocate $5 billion to extend electricity access to 100 million people in Africa by the end of the decade (2030). President of the World Bank, Ajay Banga, shared this announcement during his speech at the mid-term review of the International Development Association (IDA)'s $93 billion replenishment package on December 6, 2023, in Zanzibar, Tanzania.
Banga emphasized this initiative as an exemplary use of funds from the bank's IDA, which extends zero- or low-interest loans to low-income countries, underscoring the importance of support from donor countries.
Highlighting the ambitious plan, Banga stressed the need for World Bank shareholders, donor countries, and philanthropies to increase their contributions, emphasizing that creative financial engineering alone cannot compensate for the growing demand for concessional resources. He stated, "The truth is we are pushing the limits of this important concessional resource and no amount of creative financial engineering will compensate for the fact that we need more."
Key Takeaways
Africa's vast urban centers grapple with inconsistent electricity supplies, while significant portions of the continent's rural areas remain entirely without power. In 2021, a staggering 43% of Africans, equivalent to about 600 million people, lacked access to electricity, with 590 million of them located in sub-Saharan Africa, as reported by the International Energy Agency. Compounded by a challenging macroeconomic and financial environment, the impact of high inflation is disproportionately felt by the most vulnerable populations. Regrettably, the situation has not improved, and in 2023, more Africans find themselves without electricity compared to 2021. Furthermore, electricity services have become unaffordable for up to 30 million individuals who had previously gained access to power. This lack of access to electricity not only serves as a root cause of poverty but also perpetuates a cycle of economic deprivation in a vicious circle where poverty, in turn, exacerbates the challenges of accessing essential services such as electricity.
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