In an effort to promote renewable energy projects and boost private investment in the on-grid and off-grid production of renewable energy in Africa, the AFD Group has secured €24 million. The funds are from the EU’s electrification funding initiative, ElectriFI.
ElectriFI helps to harness and stimulate private sector investment to enhance access to renewable energy. More specifically, it focuses on poorly-served rural populations and regions that suffer from an unreliable electricity service.
AFD Group has secured €24 million from the fund to deploy the African Renewable Energy Scale-Up (ARE Scale Up) facility. With the help of the EU, AFD Group will use this lending facility to partner the early-stage development of innovative electrification projects. While priority will be given to solar energy projects, other technologies (biomass, mini-hydro, etc.) will also be considered.
ARE Scale-Up has been designed with a view to unlocking synergies between AFD and its private sector financing subsidiary, Proparco, and rallying stakeholders in both the public and private sectors.
Of the €24 million allocation secured from the EU fund,€12 million will be used by AFD to provide technical assistance facilities to strengthen regulatory and institutional frameworks in the countries concerned and to prepare financing of private or public sector renewable energy initiatives in Africa. Another €12 million will be used by Proparco to fund back-stop facilities for venture capital investments in private off-grid electricity providers.
The AFD estimates that this will provide around one million African households with access to energy and add additional renewable energy capacity of 50MW for the continent as a whole.