$12Bn Required For Mini Grids In Africa In 10 Years- Worldbank 

..As German Bank Unveils Continents Energy Scheme

Yemisi Izuora

German development bank KfW has established the Clean Energy and Energy Inclusion for Africa (CEI Africa) foundation, to provide decentralised solutions for the electrification of villages in sub-Saharan Africa.

This is as the World Bank estimates that up to $12 billion will be needed to set up minigrids in Africa over the next ten years. Local banks often lack the know-how, staff and capital to finance them while the COVID-19 pandemic has further complicated the provision of funds locally.

The aim of the project is to use the funds of the CEI Africa foundation to enable at least 190 minigrids and other small, decentralised and climate-friendly solutions for energy supply. Grants from the foundation provide incentives for companies in Africa to invest in renewable energies.

In addition, CEI Africa will partner with digital lending platforms called crowdlenders to finance minigrids and small energy solutions such as solar lighting, home solar systems, solar-powered mills, pumps and cooling systems.

The foundation will have an initial budget of up to €49 million (about $55 million). The funds are to be used to create renewable energy systems that avoid the emission of 55,000 tonnes of carbon dioxide annually and provide more than 350,000 people with access to clean electricity.

Candles instead of light bulbs, wood cookers instead of hotplates – in large parts of rural sub-Saharan Africa they characterise everyday life. More than half of the people in sub-Saharan Africa have no access to electricity. A growing economy and population are also increasing elecgtricity demand. Electrification of even remote rural regions would provide a boost to development. Children could read and study at home in the evenings, housework would be made easier, small businesses could use electricity.

Cooling for transport and storage of vaccines would also be ensured.

The recovery from the pandemic offers Africa a chance to boost growth using renewable energy. This is not only climate-friendly, but also creates jobs. No power lines would need to be built if a decentralised approach is followed.

Small, privately operated solar systems that function independently of the public grid (so-called minigrids) are thus a sustainable solution, especially for remote regions.

Up to now, the operators of existing mini-grids in Africa have often been small and medium-sized enterprises with limited access to financing.

The establishment of the CEI Africa foundation is intended to make it easier for these enterprises to grow.

The CEI Africa foundation wants to make this financing process less complicated by enabling citizens from all over the world to participate in the financing of projects reviewed and financed by the foundation via crowdlending. For this purpose, the foundation has entered into a cooperation with platforms such as the Swedish crowdlender TRINE. In this way, small savers, including migrants (diaspora investors), can participate in the financing of the minigrids.

Switzerland and Austria have already signalled concrete interest in participating in the foundation. The goal is to increase the number of electricity connections supported by the foundation tenfold in 10 years through the commitment of other donors. The project contributes to the reduction of energy poverty and the achievement of Sustainable Development Goal 7, to realise electricity for all by 2030.

The CEI Africa foundation is not Germany’s only initiative to promote sustainable energy in Africa. Green Citizen Energy for Africa: Mozambique is another KfW initiative with this goal.

This initiative is centred on building minigrids in Mozambique on behalf of the BMZ worth around €23.5 million (about $26 million). This will supply at least 7,000 businesses and households in remote rural regions, some of which will receive electricity for the first time.

In other cases, environmentally harmful diesel generators will be replaced. In total, plants with a capacity of about 3MW of electricity are being built. In addition to the mini-solar power plants, energy storage systems are also being installed and funds are being made available to promote the commercial use of electricity and thus employment.

German green citizen energy projects that serve rural electricity supply exist in eight other countries in Africa.

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