This page is part of the E3G Public Bank Climate Tracker Matrix, our tool to help you assess the Paris alignment of public banks, MDBs and DFIs.
| Paris alignment | Reasoning |
|---|---|
| Unaligned | The AfDB has signalled its intention to increasingly integrate energy efficiency considerations as part of its Strategy for The New Deal on Energy for Africa 2016–2025. However, energy efficiency remains insufficiently integrated in key sectoral work, and there are no clear specific standards required for financial intermediaries to apply. |
| Overarching energy efficiency first strategy/principle |
| Energy efficiency has traditionally not been a priority in a regional context where access remains the key objective. However, the AfDB has signalled its intentions to increasingly integrate energy efficiency considerations across relevant operations as part of its Strategy for The New Deal on Energy for Africa 2016–2025, and through supporting private and public entities in developing and implementing energy efficiency projects and programs (such as through the Sustainable Energy Fund for Africa). |
| Transport energy efficiency | Building energy efficiency | Financial intermediary energy efficiency |
|---|---|---|
| No explicit mention of the Avoid–Shift–Improve framework or evidence of equivalent principles being clearly prioritised. | No mention of energy efficiency standards for new or renovated buildings as part of the AfDB’s Urban Development Strategy | Financial intermediaries are subject to the same requirements as direct investments under the AfDB’s Integrated Safeguards System. While there is a dedicated operational safeguard on resource (including energy) efficiency, its prescriptions lack any reference to concrete energy efficiency standards or improvement thresholds. |
Energy efficiency financing
Energy access remains the priority for the AfDB’s overarching energy policy.[1] However, it does recognise the importance of energy efficiency as a cross-cutting theme and commits to placing “particular emphasis” on energy efficiency as part of its Energy Sector Policy document.[2] Clean energy and energy efficiency are also recognised as important considerations in the AfDB’s Strategy for The New Deal on Energy for Africa 2016–2025.
The AfDB commits to assisting African countries to “identify and implement options to reduce losses arising from production, transmission, distribution and end-use inefficiencies” and states that “policy dialogues with governments and relevant agencies will emphasise the importance of energy efficiency”. This was noted as particularly relevant in view of the Intended Nationally Determined Contributions (INDCs) of many African countries including ambitious plans to increase energy efficiency.[3] This is reflective of the broader trend (pointed to in the strategy) that despite the context of low access rates across Africa traditionally leading to it being deprioritised, energy efficiency is starting to become an increasingly relevant consideration as the need to optimise booming energy demand (for industrial, commercial, and residential needs) becomes increasingly apparent.
In terms of relevant initiatives, the Sustainable Energy Fund for Africa (SEFA) is a multi-donor Special Fund managed by the AfDB and is dedicated to mobilising private investment for renewable energy and energy efficiency. SEFA’s strategic priorities are:
- Green baseload: increasing penetration of renewable energy alternatives to fossil-fuel baseload generation.
- Green mini-grids: accelerating access through clean energy mini-grid solutions.
- Energy efficiency: improving efficiency of energy services across technologies and business models, including clean cooking.
The Fund offers both technical assistance and concessional financing to this end.
Transport
The priorities for the transport sector set out by the AfDB’s sectoral vision are:
- regional transport corridors
- rural roads
- structuring projects that permit the integration of different modes of transport
- rehabilitation and maintenance programs
- institutional and maintenance capacity building
- promoting public–private partnerships and multi-sectoral projects.
Avoid–Shift–Improve, or broader emission mitigation and efficiency measures, are notably absent from this list.
Buildings
The AfDB’s Urban Development Strategy identifies “environmental challenges and adaptation to climate change” as a cross-cutting focus area. As part of this, the bank commits to support projects that aim to “reduce the intensity of energy consumption”.
However, there is no further indication of particular energy efficiency standards being applied across operations relating to urban development.
Financial intermediaries
The AfDB’s Integrated Safeguards System (ISS) applies to all Bank operations. Accordingly, financial intermediaries are required to apply Operational Safeguard 1 (OS1), mandating the assessment and management of environmental and social risk and impact. The environmental and social assessment (ESA) required under OS1 in turn determines the applicability of any of the other nine OSs set out by the ISS.[4] Of these, OS3 includes provisions for the sustainable and efficient use of resources, including energy. Specifically for energy, when a given project is deemed a “potentially significant user of energy” (with this threshold not being further defined), borrowers are required to “optimise energy usage, to the extent technically and financially feasible” in accordance with the World Bank Group (WBG) General Environmental Health and Safety (EHS) Guidelines.
The WBG EHS Guidelines require a “systemic analysis of energy efficiency improvements” for any energy-using system. This includes considering both demand and supply side management opportunities. However, no specific measures for promoting either building or transport sector energy efficiency are set out.
Discussions with the AfDB have revealed that for line of credit facilities with financial intermediaries (e.g. with local financial institutions), the Bank establishes eligibility criteria for any energy efficiency projects financed. The AfDB has suggested that these criteria generally require a minimum 20% reduction of baseline energy consumption. In the case of projects involving fuel switching to more renewable alternatives, this requirement may be adapted as a 20% reduction in GHG emissions or baseline energy cost.[5]
Recommendations:
- The AfDB should orient its revised transport sector policy (currently dating from 2000) around the “Avoid–Shift–Improve” framework and include energy efficiency as a dedicated target area. Given the potential risks of embedded and induced emissions associated with the priorities set out by the sector strategy, it is vitally important that the Bank establishes effective safeguards in this regard.
- The AfDB should consider including provisions for energy efficiency and retrofitting as part of its urban development strategy, including applying minimum efficiency standards (that consider relevant local technical and financial capacity constraints) across projects involving new and/or renovated buildings.
- While the AfDB’s fundamental extension of its ISS and associated OSs to operations involving financial intermediaries reflects best practice, the details of this approach could be strengthened. In particular, the Bank should consider specifying a clearer threshold than “potentially significant user of energy” for determining the applicability of the energy efficiency requirements of OS3. Moreover, given the absence of any building or transport sector energy efficiency guidance in the WBG EHS guidelines, the AfDB should consider including (or referring to) dedicated requirements (such as the IFC’s EDGE certification) for operations in these sectors as part of OS3.
[1] Despite not being reflected explicitly in the AfDB’s strategic documentation, discussions with the Bank have revealed the AfDB is actively working towards embedding energy efficiency considerations in energy access programs. This is intended to not only amplify and accelerate the impacts of energy access programs, but also to prevent locking in inefficient energy consuming appliances and equipment.
[2] Notably, this document has not been updated since 2013. For further details, see the “Integration of climate in sectoral strategies” metric.
[3] INDCs were initially submitted in 2015 and have for many countries since been replaced by (in some cases successive) NDCs.
[4] There is also a dedicated OS covering financial intermediaries (OS9). However, this makes no specific reference to energy (or even resource) efficiency measures (including through reference to OS3).
[5] Information received directly from the AfDB.
Last Update: April 2025