The Board of Directors of the African Development Bank Group has approved an innovative multinational financing program for Distributed Energy Service Companies (DESCOs), which would see 900,000 households in sub-Saharan Africa – about 4.5 million people - gain access to solar power by 2025.
The DESCOs Financing Program promotes securitization financing techniques to address barriers to accessing finance for DESCOs, while supporting their growth and expansion into existing and new markets. The program will also facilitate local currency financing for DESCOs and provide local lenders with risk mitigation instruments to support them.
The Africa Clean Energy Technical Assistance Facility (ACE-TAF) launched its programme in Abidjan, Cote d’Ivoire, on 25-26 June, at the 3rd Round of the Africa Energy Market Place (AEMP). The AEMP is an African Development Bank’s energy sector platform involving country governments, private sector and development partners to review and fast-track priority transactions capable of transforming Africa’s power sector.
Cathy Bassa, the Deputy Head of Mission at the British High Commission in Abidjan, noted in her opening remarks, "The launch of ACE-TAF here at the AEMP signifies DFIDs continued support for investments in affordable solar energy in Africa. We are excited to be here to launch this programme with key energy sector partners from all over Africa."
(International Energy Agency/Newsroom, 25 May 2018)
(Sara Jerving / devex, 2 December 2017)
Building out mini grid systems could help to electrify rural populations in the developing world, but these projects can be a hard sell to investors. According to the United Nations Industrial Development Organization, progress on this type of energy generation has been obstructed by insufficient in-country technical capacity to install, operate and maintain the systems, weak regulatory frameworks to attract project developers, and inadequate access to financing to bring these projects to scale. Mini grids are small-scale energy generation units that supply electricity to a localized distribution grid. These projects can be independent or connected to the central grid, if it is available. Mini grids can be an important alternative to the grid or enhance central grid extensions, said UNIDO.