The Africa Enterprise Challenge Fund (AECF) in partnership with United Kingdom Government has launched the Household Solar Round 2 competition worth $20,600,000 (£16m).
The competition seeks to accelerate access to transformative solar home systems to the rural poor households in Ethiopia, Somalia, Ghana, Nigeria, and Senegal.
“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 its self across the continent,” said Dr Christian Rogg, Head of Office, DFID Ethiopia.
“Although the situation persists, initiatives promoting household solar systems through the private sector have started to offer affordable solutions to rural communities for lighting and economic use.”
In Ethiopia, approximately 11 million rural households do not have access to electricity, making the off-grid market attractive for private sector. Read: Finance Ministers to mobilise climate finance
In his speech, H. E. Dr Frehiwot Woldehanna, State Minister of Water, Irrigation and Electricity, said: "We are committed to working with AECF and DFID to support companies provide access to electricity to our rural populations. Rapid growth and transformational development requires reliable energy production, supply and efficiency. Without adequate and reliable supply of energy, no industrialisation, agricultural value additions, job creation, economic and sustainable growth are achievable."
AECF explained that the REACT Household Solar-Round Two funding will provide a mix of interest free loans, repayable grants and technical assistance to the private sector. As a critical component of Africa Clean Energy (ACE) Programme, the competition seeks to increase 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.
“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 do not appear in the macro-economic statistics yet they have the ability to transform the lives of millions of school children,” Daniel Ohonde, CEO, The AECF.
Over the past seven years AECF has funded private sector companies that take advantage of market drivers like mobile network and data services, mobile payment systems, growing micro- finance networks and an appreciation of social collateral to accelerate access to solar home systems in rural sub-Saharan Africa. Read: SANEDI encourages green loans to develop renewable projects
“With REACT Household Solar Round One investing a total of $7 million in 10 companies spread across 4 countries, the additional funding for Round Two 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,” Daniel Ohonde, CEO, AECF.