The Ethiopian Electric Power (EEP) and Enel Green Power (EGP), the Italian company that is set to sign a power purchase agreement to develop a 100MW solar power plant near Metehara town in the Oromia Regional State at a cost of 120 million USD, are going to acquire land from the regional state.
In October 2017 EEP announced that the leading European renewable energy developer, Enel Green Power, has won the bid to build a 100MW solar power plant near Metehara town, located 230km east of Addis Ababa in East Shoa Zone. The area enjoys high levels of solar radiation. The company would build, own and operate the solar power plant. According to the draft agreement, EEP would buy all the electric power generated by Enel Green Power for 20 years.
The cost of the project, including a pilot project, is 600,000 dollars. The system, dubbed Pay-as-You-Go, was piloted in the Somali Regional State towns of Berket, Kebri Dahar, Degehabur and Shilappo. Eighty solar home system kits were provided to residents after registering them on the HelloSolar system.
With Ethiopia moving to a strategy which helps embrace the wisdom of solar energy within the country and play catch-up to successes achieved in neighboring nations such as Kenya and Rwanda; HelloSolar in partnership with BelCash – the mobile banking platform system – is set to introduce a pay-as-you-go system for the nation’s off-grid population with affordable solar home system. This is a jump-the-queue strategy for the company in offering such a system and becoming a pioneer in a country whose majority of population still lack basic energy. In addition, the company has launched an International Remittance payment system, to allow members of the Diaspora to pay from anywhere in the world with a credit card and convenience local clients.
For almost six months, HelloSolar has been testing a PAYGO system, bringing brand-name partners to the table such as: BelCash, Shell Foundation, DFID and USAID and Power Africa (President Barack Obama’s initiative to use renewable energy to provide basic energy across the continent).
Achieving universal access to electricity by 2030 is estimated to require an investment of USD 187 billion (EUR 163bn) in mini-grids globally, and sub-Saharan Africa is the main destination. Developing clever financing mechanisms and determining best policies is what the Africa Mini-grid Developers Association (AMDA) is working on. AMDA was launched in April this year, with one of the points on its agenda being the development of a Results Based Financing (RBF) fund to help mini grids gain scale, in cooperation with donors, governments and other stakeholders. Jessica Stephens, global coordinator of the association, tells Renewables Now that the African Development Bank (AfDB) is currently developing a continent-wide RBF facility that is based on the principles that AMDA outlined in its SMART RBF policy paper. AMDA and several other stakeholders that assisted in developing the initial policy paper have been asked to join the advisory committee for the AfDB fund.
According to AMDA's white paper, a mini-grid RBF facility is the best way to scale up the sector and should play a central part in any approach to providing subsidies for private utilities in Africa. Via such a facility, companies that develop projects to connect customers to power get a fixed rebate per connection installed to ease the capital cost of the project. AMDA notes that although there are several RBF programmes targeted at the mini-grid sector at the moment, most are restrained by complex evaluation and approval processes.