NEoT Offgrid Africa and Winch Energy Limited have invested $12 million in solar mini-grid projects in Uganda and Sierra Leone to improve energy access for all.
The project will equip 49 villages in Sierra Leone and Uganda with off-grid and remotely controllable solar solutions which will supply power to almost 60,000 people. The Remote Power Units (RPU) will be designed and manufactured by Winch Energy through its assembly facility in Sicily, Italy.
In the second phase of the project, 6,000 portable batteries will be deployed in the villages to serve people who live too far away from the power unit. At the same time, partnerships with telecom operators will be established to guarantee internet access for households.
The project has already started installing RPUs in the first 13 villages in Uganda. All 25 RPUs are expected to arrive in Uganda by the end of 2021. Uganda sites are expected to be operational in early 2022. An additional 12 village power plants are already operational in Sierra Leone, providing customers with clean energy. The Sierra Leon sites are expected to be operation by the second quarter of 2022.
Financing minigrids debt transaction to address lack of energy access
Winch Energy IPP Holdings Limited (WIPP), where NEoT Offgrid Africa (NOA) is the main shareholder, is the new investment platform for those projects. Development bank FMO has arranged a syndicated facility whereby the Access to Energy Fund and the Renewable Energy Performance Platform (REPP) will lend the first tranche of $4 million for the portfolio of minigrids in Uganda and Sierra Leone.
The second tranche of up to $ 6 million is also included in the facility to finance future projects since WIPP plans to expand its operations in Sierra Leone and Uganda and to other countries.
Nicholas Wrigley, Winch Energy CEO said the debt financing from FMO and REPP Camco represents a landmark for the off-grid industry in Africa and worldwide. “This first tranche represents the beginning of our investment programme with our partner NOA and additional investments will soon follow in Sierra Leone and Uganda and we are also targeting Nigeria and Ethiopia for 2022.”
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Huub Cornelissen, FMO energy director said supporting renewable energy programmes is key to their strategy as lack of access to energy is one of the biggest barriers to development. “Minigrids are seen as essential to increasing access to electricity and, as such, are becoming part of FMO’s core strategic focus.
“The partnership with Winch Energy and NOA proves that mini-grids can be financed at scale and efficiently by creating a cross-country portfolio of assets. The addition of a facility for future projects allows for scale and provides the developers with an efficient funding source for the deployment of additional mini-grids,” explained Cornelissen.
Solar minigrids have a role to play in UN SDGs
This project contributes directly to the achievement of the Sustainable Development Goals (SDGs) set by the United Nations, including among others:
- Accessible and clean energy (SDG7) to villages which currently have limited access to electricity mainly derived from fossil fuels;
- Climate Action (SDG13) by promoting power generation from solar energy and contributing to reduce greenhouse gas emissions;
- Decent work and economic growth (SDG8) by supporting local employment with at least 65 local permanent jobs created and many more during the construction phase.
- Poverty alleviation (SDG1), good health and well-being (SDG3) and quality education (SDG4) through connecting businesses, schools and health centers to reliable and clean electricity; and
- Effective public-private and civil society partnerships (SDG17 – Partnerships for the goal) with the involvement of both the Uganda and Sierra Leone governments, international agencies as well as private sector actors.
Geoff Sinclair, managing director for Camco Energy, which manages both the Access to Energy Fund and the Renewable Energy Performance Platform (REPP) said the mini grid programmes will serve as a template for the wider rollout of minigrids into the surround markets.
“Solar-powered minigrids have a vital role in enabling countries in Africa to meet their climate action targets while providing affordable, reliable and sustainable energy access to underserved rural communities.”
The link between projects and financing and the scale-up of energy access across Africa will be touched on during the Enlit Africa digital event from 26 to 28 October. Book your front row seat now.