The funds will be put towards the deployment of green mini-grid systems (GMGs), and help drive private investments in this sub-sector, the AfDB said in a statement.
This initiative is aimed at supporting the country’s efforts to provide reliable power to around 145,000 rural households and improve off-grid access from 5% to 22% by 2018.
Energy solution to dense areas: mini-grid systems
The Bank explained: “Green mini-grids are village or district-level electrical distribution networks that serve the needs of communities too distant to be economically connected to the grid in the near to medium term, but densely populated enough to offer economies of scale in power delivery compared with individual home systems.”
The International Energy Agency has projected that 40% of investment required to achieve universal electricity access by 2030 can be achieved through the deployment of mini-grid systems.
Kurt Lonsway, AfDB’s Manager for Environment and Climate Change, said after the approval: “Given the low 5% rural access rate to electricity in Rwanda, combined with gradual population growth and significant untapped renewable energy potential, GMGs can provide robust and cost-effective energy access solutions.”
Expanding electricity access
Negatu Makkonen, AfDB Resident Representative in Rwanda said: “When completed, the project will promote private sector participation in the nascent and promising green mini-grids market in the country.”
“The project is one of SEFA’s Country Programmes of enabling environment support for GMGs that will address sector planning, regulatory and policy interventions and market development activities in up to six countries in 2016-2017. In addition, in June 2015, SEFA approved a grant of US $1 million to the SE4ALL Africa Hub to promote the scaling-up of GMGs in Africa through the regional GMG Market Development Programme,” the Bank highlighted in a company statement.
What is SEFA?
[quote]SEFA, a $95 million multi-donor facility was funded and initiated in 2012 by the governments of Denmark, the United Kingdom, the United States and Italy.
This initiative aims to drive medium and small-scale renewable power projects in Africa through the provision of funds. It also aims to support the public sector-to improve the enabling environment for private investments in sustainable energy, the Bank highlighted.
Image source: meagle sun