The fund will support its New Deal on energy for Africa which aims to achieve universal access to Africa by 2025.
The plan was born out of the Energy Week conference held in Abidjan, Ivory Coast in March which brought stakeholders together to discuss methods of improving energy access.
Until recently, the AfDB and other organisations regarded off-grid power provision as a stop-gap measure, designed to provide electricity to people until their homes were connected to the grid.
However, the global boom in renewable energy technologies and the growing attraction of energy in the West has changed the way the concept is viewed.
The process is likely to accelerate when battery storage becomes cheaper and more efficient.
At present, solar panels, batteries, and other components are manufactured elsewhere in the world, predominantly in Asia.
They are imported in Africa, mainly in East Africa, by companies who sell them on to customers. Weekly or monthly payments in small amounts are made, often by mobile phone, until the solar kit is paid off.
According to the AfDB President Akinwumi Adesina “Africa’s energy potential is as enormous as its electricity deficit, adding that they must move quickly to unlock the energy potential.
He said they must be smart, efficient, sustainable and quick in actions…Although they can employ a mix of approaches, off-grid solutions must be at the core of approach to achieve the ambitious electricity access targets that have been set.
The AfDB is keen to see decentralised solar PV take off in the rest of the continent, beyond East Africa and is keen to use its financial muscle to support long-term integrated planning to mitigate foreign exchange risks.