African Development Bank approves US$7 million grant for mini-grid industry

Valentine Muhamba Avatar
Solar panels on roof

Africa has, according to the Institute for Security Studies Africa (ISSA), the fastest-growing population in the world. The population on the continent is expected to grow by roughly 50% over the next 18 years. This population explosion, which is expected to reach around 1.8 billion in 2035, is going to need modern infrastructure in order to sustain it. One of the key elements of modern amenities is electricity. This has been a perennial problem for most countries on the continent and the African Development Bank (AfDB) is looking to give the industry a boost with a US$7 million fund for renewable electricity mini-grids.

“The board of directors of the African Development Bank (AfDB) has approved a US$7 million grant from the Sustainable Energy Fund for Africa (Sefa), for a new technical assistance initiative meeting the needs of the continent’s fast-evolving renewable mini-grid industry,”

AfBD

The focus on mini-grids is because they have become an increasingly important feature of energy access on the continent. In a report by the International Finance Corporation (IFC), mini-grids are a key component to providing 500 million people in Africa with electricity by 2030.

African Development Bank mini-grid funding

The AfDB will be disbursing the funds through the Africa Mini-Grid Market Accelerator Program (AMAP). This program will run on four core pillars:

  • Opening New Markets (designing bankable, national mini-grid acceleration programmes to attract public and private investment for mini-grid implementation).
  • Catalytic Support (developing new financial de-risking instruments for mini-grid investments and providing TA to unlock private investment).
  • Strengthening the Ecosystem (expanding knowledge sharing, innovation capacity, and technical skills across a broad range of industry actors).
  • Programme Management (ensuring smooth project implementation and high-quality outputs).

AMAP’s first phase is expected to lead to 880 000 new electricity access connections for over four million people as well as:

  • Over 80MW of renewable energy-based generation.
  • The creation of 7 200 full-time jobs, 1800 of those are expected to be held by women.
  • Reduction of over 6,5 million tonnes of carbon dioxide equivalent in lifetime greenhouse gas emissions.
  • The facilitation of an estimated US$650 million of public and private investments in mini-grids.

The Africa Mini-Grid Market Accelerator Program is not only going to help fulfil the AfDB’s ambition on a new deal on energy in Africa. But it is also going to help achieve the seventh UN Sustainable Development Goal which is for the access to affordable, reliable, sustainable and modern energy for all.

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