AFD to provide US$26m for African renewables
Wednesday, Mar 29, 2020
The EU’s ElectriFI electrification funding initiative has given the Agence francaise de developpement (AFD) a 24 million euro (US$26 million) grant to support projects designed to boost private investment in on-grid and off-grid renewable energy in Africa.

The AFD will use the funding to deploy the African Renewable Energy Scale-Up (ARE Scale-Up) lending facility.

It will act as a partner in the early stages of development of innovative electrification projects, giving emphasis to solar energy projects, but also considering other technologies such as biomass and mini-hydro.

The AFD will use 12 million euros (US$13 million) of the cash to provide technical assistance facilities to strengthen regulatory and institutional frameworks and to foster private financing of renewable initiatives.

The other 12 million euros (US$13 million) will be used by AFD Group’s private sector financing subsidiary Proparco to fund back-stop facilities for venture capital investments in off-grid technology, such as solar power kits and mini-grids.

This Proparco funding is expected to provide 1 million African households with access to energy and boost renewable energy capacity by 50 MW. This involves Proparco providing seed funding over the next five years for five to 10 businesses with innovative, high-potential projects.

“The ARE Scale-Up facility will provide us with fresh resources to partially cover our risk exposure in the new off-grid solar energy sector and allow us to partner other types of business models such as mini-grids and small-scale distributed generation systems,” said Emmanuelle Matz, head of Proparco Energy and Infrastructure.

With Africa’s energy requirements growing rapidly more support is needed for mass development of renewable energy technologies.

In particular, the drop in solar prices and the emergence of innovative business models has led to the emergence of more programmes seeking to give the industry the boost it needs in Africa.

The EU’s ElectriFI funding initiative helps to stimulate private sector investment to increase access to green energy.

The programme places emphasis on poorly served rural populations and regions that lack reliable electricity supplies.

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