Ranging from Nigeria's largest 760 megawatt (MW) Kainji plant, to South Africa's 2.7 MW Sol Plaatje, the refurbishments are expected to yield an extra 570 MW across the 12 projects. Work on the first plants is expected to start by June next year.
Plants in Sudan, Zambia, Angola and the Democratic Republic of Congo will benefit.
The upgrades would "accelerate the energy transition" away from fossil fuels, João Cunha, head of the renewable energy division at AfDB, said.
Although only a fraction of its potential is harnessed, hydropower is a cornerstone of renewable energy and water management in Africa, where climate change is worsening droughts and floods and hundreds of millions of people lack access to electricity.
But a lack of spare parts, obsolete components and poor maintenance has hit the continent's hydropower. Plants, some built in the 1950s, have fallen into disrepair.
An AfDB-commissioned study in August by the International Hydropower Association (IHA) found that out of 87 plants across Africa, 21 with a total capacity of 4,600 MW needed urgent rehabilitation worth $2 billion. Another 31, totalling 10,000 MW, would need work in the next decade.
"Africa is facing an energy crisis, with limited supply, especially of renewable energy," Anton-Louis Olivier, chairperson of the IHA, told Reuters.
More than 60% of Africa's hydropower capacity came from plants more than 20 years old that need upgrades as longer-term projects were pursued, he added.
The plan seeks to raise output at Nigeria's 600 MW Shiroro hydropower station close to Abuja, with an extra 100 MW using floating solar photovoltaics.
A senior official at Shiroro's operator, North South Power Company, declined to comment as they negotiate with the World Bank, a senior official told Reuters.
Africa has around 300 new hydropower projects planned. However, Matthias Wildemeersch, senior researcher at Oxford's Environmental Change Institute, said water shortages linked to climate change would harm "the economic viability of new hydropower projects across Africa".
