The African Export-Import Bank (Afreximbank) stated that Germany’s development bank group, KfW, has committed to pay for renewable and energy efficient projects in East Africa being implemented by equipment supplier, Mobisol, reported Business Week on Sunday.
According to a statement by Afreximbank, KfW’s promise is aimed at encouraging the development of solar and wind power projects in East Africa.
This followed KfW’s commitment to continue support for trade finance business in the region through Afreximbank.
Partnering with Afreximbank
Afreximbank said in a statement last week that both institutions “agreed to work together in an environmentally sustainable manner by targeting an initial pipeline of $1 billion commencing in 2016.”
This was after Frankfurt-based KfW’s investment and development subsidiary, DEG, said it was financing Berlin-based solar equipment supply company Mobisol in its expansion in East Africa.
DEG said it had also taken an unspecified “financial stake” in Mobisol, which supplies off-grid solar systems to homes in rural areas.
DEG management board member Christiane Laibach said supporting German SMEs such as Mobisol with environmentally-friendly projects in sub-Saharan Africa was part of the institution’s strategic goals.
Equipping households and entrepreneurs
DEG explained that: “Mobisol has already equipped over 21,000 households in Tanzania and Rwanda with off-grid solar power systems.
“The current financing enables the company to further expand. It is envisaged that 150,000 people in rural East Africa will use Mobisol systems in the future.
DEG added: “Moreover, 10,000 micro entrepreneurs are expected to generate an income amounting to $10 million annually.”
According to the DEG, Mobisol’s technology combines “environmentally friendly technology with an innovative payment system”.
Customers pay for installations in small monthly payments via their mobile telephones.
AA rating for Afreximbank
In further news, the Association of African Development Finance Institutions (AADFI) has awarded the Afreximbank a rating of AA following the latest peer review of its member institutions that was held last year.
Afreximbank was among the 33 development financial institutions (DFIs) which submitted to the peer review by having their practices assessed under the AADFI Prudential Standards, Guidelines and Rating System (PSGRS).
The 2014 assessment covered governance, finance and operations in which Afreximbank came out with a weighted overall score of 94%.
The AA rating achieved by the Bank is the highest rating AADFI awards to DFIs.