Taking renewable energy to rural areas

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Africa Enterprise Challenge Fund (AECF), in collaboration with the Swedish International Development Cooperation Agency (Sida), is set to disburse grants worth $6,5 million to local private companies keen to distribute cost-effective renewable energy technologies in rural communities.

By Kennedy Nyavaya

In an effort to power marginalised communities cognisant of the Paris Agreement, a global deal on reducing carbon emission fuelling climate change, Sida has set aside a total of $48 million which businesses in seven sub-Saharan African countries will benefit from.

Speaking to journalists at a stakeholders meeting with prospective beneficiaries in the capital recently, AECF portfolio manager for renewable energy Victor Ndiege described the programme as an effort to provide electricity to marginalised areas while also reducing use of unsustainable fuels.

“We want to partner the private sector to build markets in rural places so people can be able to buy and sell renewable energy products that can help us improve on the environment,” said Ndiege.

“Considering the number of climate change protocols that have been signed across the globe, our investment would have reduced quite a significant amount of carbon dioxide that would have otherwise been emitted into the atmosphere.”

Applicants for the fund will have to go through the AECF’s rigorous process to be awarded the grant. however, Ndiege reiterated that they were willing to commit even “where commercial lenders would not put money” as a result of immense risk.

“As AECF we do not call for collateral because all of Africa and majorly sub-Saharan Africa, one of the limiting factors to getting access to credit is the ability of starting a company and in addition demonstrating that the company is creditworthy,” he said.

As a signatory to the Paris Agreement, Zimbabwe has set its Nationally Determined Contributions emission reduction at 33% by 2030.

Renewable Energy Association of Zimbabwe official Isaiah Nyakusendwa said although lack in funding of projects has been a major setback to introducing renewable energy, it will play an integral role in the emissions reduction drive.

“The Zimbabwean challenge has always been funding and the market itself does not have enough funding necessary for renewable energy projects because by their nature the take a long time to implement,” said Nyakusendwa lauding AECF for the initiative.

In most sub-Saharan Africa countries, including Zimbabwe, over 60% of the rural populations do not have access to energy while the majority of those connected are depending on fossil fuels.

Last year AECF, an international development institution, unveiled a total of $2,6 million in loans to local companies focused on solar home systems. This year successful companies will get between $100 000 and $250 000 starting in May.

In a statement, Swedish ambassador to Zimbabwe Sofia Calltorp said the initiative would ease the burden of scanty energy supplies inconveniencing the marginalised, particularly women and children.

“It is my hope that this important initiative will not just provide light to Zimbabweans, particularly in the rural areas, but also energy for productive use that will contribute to green economic development and creation of green jobs,” she said.

An estimated 625 million people in excess do not have power in sub-Saharan Africa alone despite the great potential to harness both sustainable and fossil fuel.

According to the World Bank, the energy infrastructure in Africa is still challenging as it is characterised by insufficient capacity, poor reliability and high costs, with 25 nations in sub-Saharan Africa faced with an impending crisis.

But in a bid to develop, Africa, which accounts for about 15% of the world’s population, is set to champion the connection of more people to electricity with the remaining question being the source of the power.

However, in the face of climate change and an international pledge by signatories of the Paris treaty, the progressive and sustainable way to electrify the continent lies in solar, biogas, wind and hydro energy.