Unlocking climate finance for clean energy in Africa

Africa remains the most affected continent by the global climate crisis, adding a considerable drain on its public finances and growth trajectory. The increasing cost of living has also impacted the macroeconomic conditions of most African countries worsening debt vulnerability and fiscal distress in their financial structures.

While Africa’s past and current contributions to global carbon emissions are below 3%, it is at the receiving end of devastating climate change impacts. Off-grid bottom of the pyramid access to finance therefore remains essential to achieving SDG7 (Affordable & Clean Energy) in the continent.

During the Africa Climate Summit 2023 in Nairobi, George Mudhune (pictured), the Engie Energy Access Head of Wholesale and Partnerships for Africa, highlighted that while finance mobilization from international public sources is critical, complimenting efforts are needed from the private sector to fill the massive climate financing gap. During the summit, Mudhune provided an African perspective on how Engie Energy Access has mobilized climate finance for its projects in Africa.

In Benin, Engie Energy Access secured a Euro 10 million debt finance from the European Investment Bank in 2022 to support the deployment of 107,000 high-quality SHS kits. This was to open access to clean energy for 643,000 people.

In Uganda, a $12.5 million debt finance from the European Investment Bank was secured in 2020 to support the deployment of 240,000 high-quality SHS kits. The target was to get 1.4 million Ugandans to access reliable and affordable clean energy.

In Kenya a grant of USD 4.6 million under KOSAP (Kenya-Off-Grid Solar Access Project) from the World Bank through its subsidiary, International Development Agency (IDA) in 2020 in which Engie Energy Access is active in 3 of the 5 windows i.e. Mini-grid, off-grid solar companies and end-user subsidy of which the grant are offered.

The KOSAP project was implemented by the Kenyan Ministry of Energy through the KPLC and the Rural Electrification and Renewable Energy Corporation (REREC) through 18 companies operating in renewable energy in Kenya of which Engie Energy Access was one of them. About $3 million was towards 165,000 stand-alone SHS kits in remote villages in 14 counties in Kenya.

In Rwanda, Engie Energy Access was part of a $30 million line of credit, direct financing, subsidy, and $15 million Results-Based Financing (RBF) Renewable Energy Fund through the Development Bank of Rwanda.

In Gabon, Mudhune is currently leading Engie Energy Access’s $6 million green bond financing initiative for its B2B partner through a Switzerland-based impact investment company. The funds will be used to alleviate end-user affordability of SHS kits faced by rural households in Gabon. If the pilot works in Gabon, Engie Energy Access plans to roll it out in its other B2B markets in Africa.

On key learning on climate financing, George Mudhune indicated that entities seeking to access climate finance must have solid market insights, research-driven consumer product needs, practical business models,s and strong business ethics in order to create an impact on the lives of millions of people in Africa who need access to affordable and clean energy.


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