AfDB approves $30 million for Togo solar project

From the newsletter

Togo has secured $30 million in funjding from the African Development Bank (AfDB) for its 62 MW Sokodé solar plant. The project will cost $68 million and will be built through a public-private partnership. Proparco, the French development finance agency focused on private sector growth in emerging markets, will co-finance the project's development.

• The country currently has an installed capacity of 134 MW of renewable energy from solar and hydropower. Last month, construction began on a 25 MW solar project as it moves to achieve its target of installing 200 MW of renewable energy by 2030.

• Togo relies on electricity imports from Nigeria and Ghana to meet its 120 MW deficit. It plans to increase domestic electricity generation to reduce its reliance on imports from countries that equally face similar electricity supply shortages.

More details

• The project financing will include $21 million from the AfDB and a concessional loan of $9 million from the Sustainable Energy Fund for Africa (SEFA), a multi-donor special fund managed by the AfDB that provides catalytic finance to unlock private sector investments in renewable energy and energy efficiency.

• It will be developed by Électricité de France (EDF), a French multinational power utility company. The project works will include the design, construction, and operation of the solar plant and the construction of an 11 km transmission line. Once operational, the plant is expected to generate 87 GWh of electricity annually and help reduce annual CO₂ emissions by approximately 136,000 tonnes.

• Togo's energy policy remains behind in terms of accommodating private sector players, but plans are underway to allow private sector investments in the energy space. The government, though, has developed plans and strategies that incorporate renewable energy projects. Major projects, such as the 50 MW Blitta and 25 MW Dapaong solar plants, are linked to the National Development Plan (PND). Some plans target rural electrification, where the majority of the people lack access to electricity.

• Major development organisations and multilateral lending institutions have been key players in financing renewable energy projects. The World Bank is funding the 25 MW Dapaong solar project. AfDB, GIZ, and the European Union are supporting rural electrification programmes. However, there are very few local companies investing in the sector, given the unattractive policy space, making scaling up investments a challenging task.

• Just like many other African countries, Togo faces the grid challenge. Old and inefficient transmission lines mean the country loses about 15% of its generated electricity. Yet, more than 40% of the population lacks electricity access, and this lost power could be used to connect more people. Even as renewable energy projects take shape, new lines have to be built to evacuate the power. And it's a good move to see the new project integrating the construction of transmission lines with the Sokodé solar plant.

• For the AfDB, a big challenge lies ahead, especially after the exit of its major funder, the US. This is a significant blow given its commitment together with the World Bank to provide $40 billion to connect 300 million Africans by 2030. The bank, though, can open negotiation talks with the US or pursue other funding options, including raising capital from capital markets or its other traditional donors like the UK and Germany.

Our take

• Renewable energy investments are proving to be the go-to investments. There's no doubt about profitability if the project is well structured. For example, Scatec got $96 million in revenue in the first quarter of 2025, with assets from South Africa and Egypt generating the most electricity.

• However, these countries have done a lot to attract private sector investments. Togo needs to fast-track its policies to be up to date with other countries like Ghana, South Africa, and Morocco to attract private capital for scaling up investments.

• Additionally, there is a need to provide subsidies and incentives either to consumers or companies to encourage more solar adoption. Nigeria is doing the same, targeting mass electrification of rural communities.