goodwe september

KfW to Finance €49 Million For African Mini-Grids


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German state-owned investment and development bank, KfW has set up a new foundation in order to supply clean electricity to the people living in sparsely populated areas of Sub-Saharan Africa. 

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On the behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), KfW has established “Clean Energy and Energy Inclusion for Africa” (CEI Africa) by signing a financing agreement of €49 million. The foundation will provide funding for the acquisition and installation of solar mini-grids and offer grant incentives for companies to invest in African renewables.

The fund will help in producing renewable energy systems, which will result in avoiding an annual CO2 emission of 55,000 tons and benefit more than 350,000 people with access to clean and reliable electricity. The clean energy fund will also provide small energy solutions such as solar lighting, home solar systems, solar-powered mills, pumps, and cooling systems.

According to the estimate of the World Bank, about €10.6 billion in funds will be needed to set up mini-grids in Africa over the next decade. The German fund has promised to partner with crowd-funding lenders such as Sweden’s TRINE for distributing solar installations and products.

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The CEI Africa Foundation expects at least 190 mini-grids and other small, decentralized, and clean solutions for energy supply with a total generation capacity of 17 MW. CEI Africa hoping to attract other donors, with Switzerland and Australia already has signaled an interest in joining the foundation.

KfW has already committed to funding €23.5 million for the Green Citizen Energy for Africa program to install mini-grids in Mozambique on behalf of BMZ. This program is set to power at least 7,000 homes and rural businesses, even supplying electricity for the first time in some cases. 

More than half of the population in sub-Saharan Africa has zero access to electricity. Electrification in the rural regions using renewable energy would provide a boost to development. This is not only reliable and climate-friendly but also creates jobs, leading to the economic and social development of the region. The small, privately operated solar systems that function independently of the public grid are a sustainable solution, especially for remote areas.

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