UK, AECF Okays £16m To Support Solar Power In Nigeria, Four Others
The United Kingdom and Africa Enterprise Challenge Fund (AECF) have approved a fresh round of funding worth £16m to support the deployment of solar generated electricity by small businesses in Nigeria and four other African countries.
Expected to be deployed through AECF’s Renewable Energy and Adaptation to Climate Technology (REACT) Household Solar Round Two Competition, the funds would provide a mix of interest free loans and repayable grants and technical assistance to private sector operators in the solar business.
Apart from Nigeria, solar power operators in Ethiopia, Ghana, Senegal and Somalia, would be allowed to access the funds as long as they meet the requirements spelt out by AECF.
Up to 25 solar-based businesses or operators from these countries would be able to access the fund on a matching grant basis. The funds would also be disbursed to successful operators on a milestone process, while repayment would not be immediately.
According to the statement, the funding window was part of AECF’s Africa Clean Energy Programme (ACE). It also seeks to increase the supply of household solar systems to rural markets at affordable costs, facilitated through innovative financing; operating and distribution models such as the PAYGO and micro-financed solar power interventions.
“Renewables provide just 18 per cent of Africa’s current power generating capacity, therefore developing off grid alternatives could create many more opportunities and transform millions of lives,” said the Chief Executive Officer (CEO) of AECF, Daniel Ohonde.
Ohonde, further explained: “Solar home systems are a simple solution that do not appear in the macro-economic statistics, yet they have the ability to transform the lives of millions of school children.”
According to him, REACT Two would with its £16 million funding pool, “accelerate access to transformative solar home systems to the rural poor households in sub-Saharan Africa.”
“The competition promotes a market-based approach for the delivery of solar home system products and services in five countries namely, Ethiopia; Ghana; Nigeria; Senegal; and Somalia. The additional funding will enable AECF to continue investing in private sector companies to deliver business models which accelerate access to transformative solar home systems to rural markets in sub-Saharan Africa,” he added.
Ohonde, equally noted that the first tranche of the REACT competition in 2017 which funded solar power deployments in Sierra Leone; Zimbabwe; Malawi; and Zambia, was worth £8 million, adding, “We are happy to say that within that short period we are able to demonstrate initial impact of our investments.”
The AECF, he explained, was a $356 million valued development institution that works with the private sector across 26 countries and in two sectors of agribusiness and renewable energy. The institution, he indicated provides catalytic funding as grants or interest-free loans to businesses in these sectors to have a positive impact on the rural poor in sub-Saharan Africa.
He also said the REACT programme has so far contributed to the generation of 29.7 megawatts (MW) of clean electricity in countries it has supported, while reducing their carbon emission by over one million tonne of carbon dioxide equivalent (tCo2e) cumulatively.
