In the wake of proliferated interests in electrifying Africa, the Africa Enterprise Challenge Fund (AEFC) has partnered with the government of the United Kingdom to unveil the Household Solar Round 2, USD 20,600,000 solar fund package. The facility which looks to accelerate access to transformative solar home systems to the rural poor, will be providing solar home systems to households in Nigeria, Ghana, Senegal, Somalia, and Ethiopia.
The Fund targets about 300,000 households, which will be provided with solar energy systems after 20 to 25 African companies are shortlisted from the five countries. This funding which will also create thousands of direct jobs for citizens in the selected countries, coincides with a USD 70 Mn raise by Acumen’s KawiSafi Ventures for solar energy access in East Africa.
The Initial Phase
According to Senior Program Office of the just-launched Fund, William Mulehi, since the formation of the Fund in 2008, it has fundamentally zeroed in on people dwelling in the rural settlements of 19 African countries. AEFC has made good on this move by availing funds for private companies with provable traction to expand the reach of off-grid electricity to rural communities.
Mulehi who announced the Fund also informed ]that the breakthroughs recorded in the first leg of the facility, Round of the REACT Household Solar initiative, was the springboard upon which the United Kingdom Department for International Development took flight to provide more capital for the Round One.
While explaining this scheme’s first emergence, he said that USD 10 Mn was made available by the DFID and the initiative was executed in Malawi, Sierra Leone, Zambia, and Zimbabwe.
Mixed Assistance For Africa’s Private Sector
In Ethiopia alone, there are approximately 11 million households that are cut off from power supply, and that’s a deficit that makes the off-grid market attractive to the private sector. Citing this, AEFC explained that the REACT Household Solar Round Two package would provide a mix of interest-free loans, payable grants and technical assistance to the private sector.
Critically a component of Africa Clean Energy (ACE) program, the competitions seeks to double down on the supply of household systems to rural markets at affordable costs, facilitated through innovative financing models, operating and distribution models such as PAYGO and micro-financed interventions.
“The increasing demand for electricity, high cost of power generation and limited supply of electricity to rural areas in sub-Saharan African is a narrative that constantly repeats itself across the continent,” said Dr. Christian Rogg, Head of Office, DFID Ethiopia.
“Renewables provide just 18% of Africa’s current power generating capacity, therefore developing off-grid alternatives could create many more opportunities and transform millions of lives. Solar home systems are a simple solution that does not appear in the macro-economic statistics, yet they can transform the lives of millions of school children,” said Daniel Ohonde, CEO, The AECF.