Moyi Power, a consortium led by Gridworks and including Eranove and AEE Power, has signed three concession agreements that will see the company develop, build and operate three large-scale solar hybrid off-grid utilities in the Democratic Republic of Congo (DRC).
The agreement was entered into with the Ministry of Hydraulic Resources and Electricity of the DRC.
Branded as Moyi Power, the new company will provide power to three cities, which combined represent about half a million residents. The infrastructure will provide power to Gemena, Bumba and Isiro – cities in the north of the country. The three cities currently have no grid connection, and struggle to access reliable, affordable and clean power.
The initial investment for the three sites will be at least $100 million, funded with a mixture of equity from the consortium, debt provided by development finance institutions (DFIs) and capital grants from donors and DFIs. The consortium is in discussions for the provision of debt finance with both the Emerging Africa Infrastructure Fund and the African Development Bank (AfDB), and for the potential provision of grants with the Private Infrastructure Development Group (PIDG), The Rockefeller Foundation and the AfDB’s Sustainable Energy Fund for Africa.
The consortium was selected as the winning bidder for the Essor Access to Energy (A2E) Initiative after an international tender process run by the Project Coordination and Management Unit (UCM) of the Ministry of Hydraulic Resources and Electricity with support and funding from the UK government.
The governments of the UK and DRC have been key partners in the development of the Essor Project. Essor aims to encourage business growth, job creation, and improvements in health and education by building solar-powered infrastructure to supply reliable and affordable electricity.
Moyi Power has committed to offer opportunities to local suppliers and consultants, and to local employees, in the development, construction and operation of the solar-hybrid infrastructure. This will directly create new, green jobs, as well as employment in the wider economy as small businesses grow thanks to access to reliable power.
Financing Moyi Power
Both AfDB and PIDG have also provided advice, support regarding the structuring of the transaction during the tender process.
The development and financing process is expected to take at least 14 months. At the conclusion of financing and other contractual arrangements, Moyi Power will then begin an approximately 18-month construction period of the three power plants and associated distribution networks.
It will then start operating the three utilities and provide power for the remainder of the 22-year operating period of the concessions.
Distributed renewable energy (DRE) projects such as Essor use isolated local power grids which distribute power to homes and businesses from renewable sources such as solar and wind. They operate independently of the national grid.
Essor has generated significant interest from the DFI community because it provides a new approach for off-grid investment: a replicable model with the scale and regulatory underpinning to attract further investment in greenfield utilities across Africa.
The potential development impact for the project is significant in a country where less than 10% of the population has access to reliable electricity. The project is also expected to have a significant climate change impact as it cuts carbon emission through the displacement of diesel generation.
The 22-year concession agreements were signed in Kinshasa by Gridworks’ CEO, Simon Hodson, on behalf of the consortium, and the Congolese Minister of Hydraulic Resources and Electricity, M. Mwenze Mukaleng; in the presence of the Governors of the three provinces, the UK’s Ambassador to the DRC, Emily Maltman; representatives of UCM; and other key Congolese energy stakeholders.
Gridworks’ Chief Executive, Simon Hodson said: “For all the talk of financing and technology, we should not forget why we’re doing this project. It has the capacity to transform hundreds of thousands of lives by bringing reliable, affordable electricity to homes and to businesses in Northern DRC. In doing so, we help the people of these cities help themselves. By building electricity infrastructure we support local entrepreneurs to grow their businesses and create jobs, we help families get better education and healthcare, and we empower women.
“I’m delighted to sign the concession agreements on behalf of the consortium. In serving these three cities, Moyi Power has the critical mass and regulatory support that is missing from most mini-grid models. It can set an example to the off-grid industry, pushing down costs for consumers and attracting long-term capital from investors. The consortium now looks forward to working with the Government of DRC and with the financial institutions who have supported us to take the next step and to reach financial close.”
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The DRC’s Minister of Hydraulic Resources and Electricity, Mwenze Mukaleng welcomed the signing and said: ‘Renewable Energy is a priority sector for the Government of Democratic Republic of Congo for growth, revenue generation and employment; with an ambitious target of providing universal access to electricity. I am very pleased to launch this project and hope it brings benefits to our country and our people. I welcome the partnership with the United Kingdom in promoting projects like Essor that has helped establish a partnership with Moyi Power. These enterprises support our Government’s own efforts to increase the rate of electrification and provide opportunities for further development.’
Moyi is a word for sun in Lingala, one of four national languages of DRC, and the main language of the three cities that will benefit from the project.