DFC discusses role of development agencies in bringing electricity to emerging markets
By Andrew Herscowitz
Expanding access to electricity across the developing world is a core focus for DFC and during fiscal year 2021, the agency committed $2.3 billion — more than one-third of total commitments — to energy projects.
This week I joined several DFC investment officers at the Powering Africa Summit and Latin America Energy Forum in Washington, where we met with governments, businesses, and other development agencies to discuss the transition to more renewable power sources, the reasonable pace of this transition, as well as the new technologies and investment tools to support increased investment.
In Africa, where a severe power shortage is one of the major barriers to socioeconomic development, DFC’s energy investments span utility-scale and off-grid energy projects that generate power from both thermal and renewable sources, depending on the needs, the available resources, and the investment climate in the different markets we serve. Africa is home to one-sixth of the world’s population but generates just four percent of the world’s electricity.
In Senegal, we recently provided technical assistance to explore the expansion of the largest wind farm in West Africa. In Central African Republic, we provided financing to a project introducing solar-powered telecom towers. And because many of the roughly 600 million people in Africa who lack a reliable source of electricity live far from a central grid, DFC has invested significantly in off-grid solar power to help individual homes and businesses power lights and basic appliances.
In other markets, such as Latin America, where more of the population has a reliable power supply, DFC is more focused on advancing investments that ensure power is affordable and that countries can grow energy independence and transition to cleaner sources of power to help address the climate crisis.
DFC has adopted a broad approach to climate, which encompasses mitigation as well as adaptation and resilience. In addition to investing in projects that will reduce emissions over time, we are committed to helping countries adapt to the consequences of a changing climate they are already experiencing.
In Belize, we are supporting coastal conservation in partnership with The Nature Conservancy. And in Brazil, DFC investment will support the modernization of public lighting systems and installation of smart city infrastructure to significantly reduce energy consumption.
Andrew Herscowitz is Chief Development Officer at the U.S. International Development Finance Corporation.