The European Investment Bank and the International Solar Alliance today published a new study outlining solutions to overcome key affordability and investment challenges holding back off-grid solar investment across Africa.
“Increased use of off-grid solar technology across Africa is essential to harness clean and affordable energy and transform the lives of millions of people. The new European Investment Bank and International Solar Alliance study published today combines experience and expertise from successful off-grid deployment to outline how investment can be unlocked to increase access to solar power. The ground-breaking analysis demonstrates how closer cooperation between African, European and global partners can unlock investment and technical barriers that hold back sustainable development and the green transition.” said Ambroise Fayolle, European Investment Bank Vice President.
“The joint International Solar Alliance – European Investment Bank study outlines a pathway to unlock access to off-grid solar in Africa. This builds on proven success, expert insight and commercial experience to identify and overcome investment gaps and financial barriers holding back off-grid solar. The study details what can be done to increase access to clean energy to off-grid rural areas including refugee camps, urban areas and remote villages across Africa.” said Dr Ajay Mathur, Director General of the International Solar Alliance.
Unblocking off-grid energy investment to enable a better future for millions
At present more than 120 million households across Africa lack access to reliable and affordable energy, with 60 million households expected to remain without electricity by 2030 unless urgent action is taken.
The new in-depth overview of recent private sector led deployment of small-scale solar energy systems across sub-Saharan Africa identifies five key challenges that can be addressed to unlock high-impact local energy investment essential for sustainable development and economic growth on the continent.
The study, based on detailed consultations in Uganda, Rwanda and Nigeria and analysis of off-grid markets across the region, provides recommendations for effective intervention to scale up off-grid solar deployment depending on specific local issues.
Sharing best-practice that allows investment and technical barriers holding back off-grid solar is key crucial to scale up off-grid solar, allow vulnerable and remote communities to access clean energy and deliver the sustainable development goal of universal access to reliable and affordable energy.
New study provide technical and business solutions to scale up off-grid solar across Africa
Commissioned by the European Investment Bank, in partnership with the International Solar Alliance, and compiled by development advisors Dalberg, the new study gathers local technical and financial experience and insight from successful deployment of off-grid solar investment in Africa.
This includes examining how off-grid solar investment has benefits refugee communities in Uganda and enabled cost-effective energy access in Nigerian cities.
Sharing best-practice with development finance partners
Investment challenges including affordability, working capital and exchange rate risks and political and economic stability holding back private sector investment in off-grid solar can be reduced through combining commercial financing and support form development finance partners.
The key recommendations of the study outline different models of intervention to overcome financing, technical and customer challenges to scale up off-grid solar deployment were highlighted ahead of final publication in specialist workshops attended by representatives of AfD, KfW, FMO and the European Commission.
Breaking down barriers to scaling up off-grid solar
The report published today examines off-grid solar investment across Africa and assesses how investment barriers including affordability, equipment supply, access to working capital, regulatory challenges, insurance and technical expertise influence and hinder deployment.
The analysis uses solutions developed in local case studies to suggest how examples such as aggregated purchase of solar home systems can reduce costs and rapidly enable low-income, urban and rural communities and refugees to access reliable energy through sustainable private sector led off-grid solar projects.
The study, based on the analysis by specialised development consulting firm Dalberg, was compiled following in-depth research on government policy, on discussions with energy, business and development finance stakeholders across Africa and stakeholder workshops in Nigeria, Uganda and Rwanda.
The European Investment Bank is supporting 8 off-grid solar projects across Sub-Saharan Africa.
Last year the EIB provided EUR 5 million for private and public investment across Africa and is supporting off-grid solar across Africa including projects in, Chad, Comores, Gambia, Kenya, Mozambique and Uganda.
Link to Commercial and Economic Feasibility Study for Enhancing Off-Grid Solar Inclusion in Sub-Saharan Africa report https://www.eib.org/attachments/press/eib-ogs-finance-report-14062021.pdf
UAE Commits $4.5 Billion for African Clean Energy Initiatives at UN Climate Summit
The United Arab Emirates, as the host of this year’s United Nations climate summit, has made a significant pledge of $4.5 billion to support clean-energy projects in African nations.
This substantial commitment is a collaborative effort involving key entities such as Abu Dhabi’s clean-energy producer Masdar, Abu Dhabi Fund for Development, Etihad Credit Insurance, the nation’s export credit agency, and AMEA Power, a Dubai-based renewable-energy company.
The announcement was made by the COP28 Presidency in an official statement.
Africa faces a critical need for nearly a tenfold increase in climate adaptation funding, amounting to $100 billion annually, as emphasized by the Global Center on Adaptation. This financial boost is essential for enhancing infrastructure and protecting agriculture from the adverse impacts of climate change.
Although the continent contributes only about 4% of global greenhouse gas emissions, its nations are disproportionately affected by climate change.
“The initiative will prioritize investments in countries across Africa with clear transition strategies, enhanced regulatory frameworks, and a master plan for developing grid infrastructure,” stated COP28 President-Designate Sultan Al Jaber at the inaugural Africa Climate Summit on Tuesday.
Al Jaber’s commitment to invest in the African continent precedes the UN climate summit that he is overseeing. As the chief executive officer of Abu Dhabi National Oil Co., one of the world’s largest oil and gas producers, his involvement has sparked criticism from climate activists.
Over 400 environmental groups have voiced concerns in a letter to the UN secretary-general, expressing reservations about how Al Jaber’s work may affect the legitimacy and effectiveness of the summit.
The African Development Bank’s Africa50 investment platform will serve as a strategic partner in identifying initial projects, according to the statement.
Here are the funding details:
- The Abu Dhabi Fund for Development will provide $1 billion in financial assistance.
- Etihad Credit Insurance will offer $500 million in credit insurance to mitigate risk and attract private capital.
- Masdar commits $2 billion in equity and will facilitate an additional $8 billion in project finance, aimed at delivering 10 gigawatts of clean energy capacity in Africa by 2030.
- AMEA Power will contribute to funding 5 gigawatts of renewable energy capacity in the continent by 2030, mobilizing $5 billion, with $1 billion in equity investments and $4 billion from project finance.
This generous funding initiative reflects the United Arab Emirates’ dedication to addressing climate change and supporting sustainable development in Africa, marking a significant step toward a greener and more resilient future for the continent.
MAN Raises Alarm Over Potential Displacement of Local Meter Manufacturers in Power Sector
The association explained that the stiff financial requirements and technical specifications listed in the advertised material of the Transmission Company of Nigeria (TCN) are heavily biased against domestic manufacturers
Following the implementation of the NMMP Phase IIT, a World Bank-funded initiative launched to supply 1.2 million smart meters, the Manufacturers Association of Nigeria (MAN) has cautioned the government on excluding local meter manufacturers and assemblers within the downstream power sector from the initiative.
This was disclosed in a statement made available to the media by MAN on Sunday.
The association explained that the stiff financial requirements and technical specifications listed in the advertised material of the Transmission Company of Nigeria (TCN) are heavily biased against domestic manufacturers as local manufacturers would struggle to meet those stated requirements.
This, MAN said is against contradicted the Central Bank of Nigeria’s guidelines for the National Mass Metering Programme.
MAN emphasizes that local manufacturers have made substantial investments in expanding their manufacturing capacities, as per the Federal Government’s backward integration policy and the introduction of the NMMP intervention.
They have also made efforts to train and nurture a highly skilled workforce capable of meeting the power sector’s demands, as envisioned in the Nigeria Electricity Supply Industry.
In the statement MAN warns that this situation could potentially lead to a replication of the distressing scenario witnessed in 2012 when local manufacturers were sidelined during the meter supply, resulting in the delivery of substandard meters by foreign companies awarded the contract, which were subsequently removed from the network.
Speaking on employment opportunity, MAN said “The position of the TCN that installation will provide employment opportunities to Nigerians will completely pale into insignificance when compared with a ratio of 1 to 10 jobs that will be created if local manufacturers are included in the scheme.”
Similarly, MAN argues that the intentional denial of opportunities for local manufacturers fails to acknowledge their impressive performance in the sector, including the successful deployment and installation of a total of 611,231 energy meters across the country between January 2019 and January 31, 2021.
The potential displacement of local meter manufacturers and assemblers in Nigeria’s power sector raises serious concerns about the future of the industry.
MAN calls on the government to reconsider the advertised financial requirements and technical specifications, ensuring that they align with the Central Bank of Nigeria’s guidelines.
By including local manufacturers in the supply of smart energy meters, the power sector can benefit from high-quality products while stimulating economic growth and generating a substantial number of job opportunities for the Nigerian workforce.
Power Consumers Protest Export of Electricity Worth N23.13bn Amidst Widespread Darkness in Nigeria
Power Consumers Demand Prioritization of Domestic Needs as Nigeria Exports Electricity Worth N23.13bn to Neighboring Countries Despite Widespread Darkness.
Power consumers in Nigeria have voiced their strong opposition to the export of approximately N23.13 billion worth of electricity to neighboring countries in 2022.
This development comes at a time when many Nigerian communities are grappling with persistent power outages and widespread darkness.
According to data obtained from the Nigerian Electricity Regulatory Commission (NERC) in Abuja, Nigeria continued its export of electricity to the Republics of Benin and Niger as well as certain special categories of consumers.
The total value of electricity exported from Nigeria in 2022 amounted to $50.98 million (equivalent to N23.5 billion at the official exchange rate of N461/$). However, international customers only remitted $32.69 million, approximately N15.1 billion, indicating a shortfall of $18.29 million or N8.4 billion during the period.
Also, special customers failed to remit N792.6 million in the same period, as revealed by figures from the power sector regulator.
The export of electricity despite the dire situation of power supply within the country has drawn significant criticism from electricity consumers.
The Nigeria Electricity Consumer Advocacy Network’s National Secretary, Uket Obonga, expressed dismay at the decision, stating that Nigeria has one of the highest numbers of citizens without access to electricity in the world.
He compared Nigeria’s situation to that of China, highlighting that while China has approximately 68 million citizens without electricity out of a population of 1.4 to 1.5 billion, Nigeria has a staggering 90 million people without access to electricity.
Obonga questioned the economic rationale behind exporting such a scarce commodity that the Nigerian people desperately need. He criticized the decision-makers behind this move and their apparent disregard for the plight of their own citizens.
The export of electricity, in the face of widespread darkness and a lack of access to electricity, has left many perplexed and wondering about the reasoning behind such a decision.
The NERC provided updates on the remittances made by special/cross-border customers in the fourth quarter of 2022.
Obonga argued that the export of electricity was unjustified, particularly considering the ability of Nigerians to pay for the commodity.
He pointed out that the joint monthly revenues from two or three power distribution companies exceeded the N23 billion earned from international customers throughout the entire year. Obonga suggested that corruption might be at play and urged the incoming government of President Bola Tinubu to thoroughly investigate this issue.
While officials at the NERC defended the export of electricity, citing obligations and agreements, the discontent among Nigerian power consumers remains palpable.
Critics argue that the export of electricity should not take precedence over meeting the domestic energy needs of the Nigerian people, especially when millions still lack access to reliable power supply.
It is imperative for the government and relevant stakeholders to address the concerns raised by power consumers and find a balance between fulfilling international commitments and ensuring adequate and reliable power supply within Nigeria.
The future of the country’s energy sector hinges on striking the right equilibrium that prioritizes the needs and well-being of the Nigerian people while fulfilling international obligations in a responsible and sustainable manner.
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