Sub-Saharan Africa is rich in energy resources but its potential remains mostly untapped. Despite the abundance of sunlight, solar projects have been developed slowly and often inefficiently.

Weak competition and high transaction costs are some of the obstacles that hamper the progress of the technology.

In a continent where most people live without electricity, expanding the supply of energy has become an imperative that cannot be delayed. To meet projected demand, Africa needs to increase its power-generation capacity by 7,000 megawatts each year – equivalent to the capacity installed in Ireland, and seven times the current rate. That gap hinders economic growth and deters much-needed foreign investment.

Increasing access to power in Africa has long been of critical importance to IFC. We are the leading financier of independent generation projects, having supported not only the continent’s first private distribution company, in Uganda, but also its private integrated utility, in Cameroon.

IFC has recently launched an initiative to expand the market for solar power in Africa. Known as Scaling Solar, it provides an integrated package to project developers, incorporating all of the distinctive capabilities available within the World Bank Group. The initiative aims to reduce the time it takes to deliver solar installations to the market, stimulate competition, and lower tariffs to customers.

Scaling Solar will allow smaller African countries to enjoy the purchasing power of bigger and more developed economies – allowing several African countries that still rely on diesel-fired power to finally benefit from recent dramatic cost reductions in solar-power technology.

In the past two fiscal years alone, IFC has invested and mobilized over $2 billion in financing to support more than 1,500 megawatts of new generation capacity in Africa. Besides investing in debt and equity, we facilitate connections between viable investment opportunities and the financiers that can support them.

We take innovative approaches to our investments, supporting large, potentially transformative projects. We also help developing countries expand the use of cutting-edge technologies, such as concentrated solar power – which uses mirrors to reflect and concentrate rays of sunlight to heat steam that power turbines. For instance, IFC helped launch two landmark concentrated solar projects in South Africa in 2012 that will help diversify the country’s electricity from coal-fired power.

In addition, IFC continues to support off-grid projects that bring power directly to unconnected households in rural and remote areas. IFC has organized a debt facility for Off Grid Electric, a company that provides solar home systems in a “solar as a service” model. Combining mobile payment technology with solar technology, the system allows customers to pre-pay for energy just as they would for using a cell phone. The facility will provide the working capital the company needs to connect about 100,000 homes.