More Believers Join Africa’s Off-Grid Energy Revolution

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Written by D.A. Barber

Everyone from local entrepreneurs to a new United States government program are jumping on Africa’s off-grid energy revolution bandwagon.

“It has everything to do with serving a new generation of technology and new approaches to delivering energy to rural communities. But we’re not just looking at individual solar panels on people’s homes,” Shari Berenbach, President and CEO of the US African Development Foundation told AFKInsider in an interview. “In other instances there might be mini-grids that are connecting many households and schools and clinics and jobs.”

More than two-thirds of the population is without electricity because they are not grid-connected, including more than 85 percent of those living in rural areas. That is nearly 600 million with no access to an electricity grid, a number expected to reach 700 million by 2030, according to World Energy Outlook.

And according to the International Energy Agency, it would cost more than $300 billion to achieve universal electricity access by 2030 through conventional means.

The World Bank estimates that 34 million Kenyans – 84 percent of the country’s population – have no electricity. In Uganda, the rate of rural electrification is just seven percent, according to the country’s Rural Electrification Agency.

Zambia’s Rural Electrification Authority has identified 1,217 rural centers needing electrification. And Namibia’s Energy Minister Isak Katali, speaking in June at a ceremony for the Usib solar project, requested the project partners to “consider replicating this project in other suitable areas, particularly to remote villages in the country that are far away from the national grid.”

According to the April NPD Solarbuzz report Emerging PV Markets Report: Middle East and Africa, “Solar photovoltaic demand from the Middle East and Africa (MEA) region is set to grow 50 percent year-over-year in 2014. Between 2014 and 2018, annual PV demand will nearly triple as the MEA region becomes a key market for the global industry.”

This represent a dilemma to those seeking to expand access to affordable energy: Should this electricity be generated by large, centralized power plants – the system Europe and America used to reach widespread development, or by distributed, off-grid sources like wind and solar power. It is a debate now raging among sub-Saharan Africa developers who see demand for power largely focusing on big industry and urban areas rather than those living in remote rural regions.

Beyond “Power Africa”

Recognizing the need for power in rural areas, in June 2013 the United States
launched “Power Africa” to increase access to power in sub-Saharan Africa led by United States Agency for International Development and involving a number of other government agencies and private companies such as GE.

“The logic behind power Africa is to use a relatively modest amount of public support to create the enabling environment and the advisory support for what they call transaction advisers to help facilitate getting different projects closed, projects in terms of raising financing, coordinating with the government, coordinating with the regulatory bodies, influencing the policy structure and the tariffs approach,” Berenbach told AFKInsider.
“So a lot of that kind of advisory function can sort of create a conducive environment for private capital to come in.”

According to the US Department of Energy, the public-private initiative has already created 2,800 megawatt worth of projects and has secured commitments for another 5,000 megawatt, representing almost 75 percent of the initial goal of bringing an additional 10,000 megawatt of cleaner energy to Power Africa’s six countries of Ethiopia, Ghana, Kenya, Liberia, Nigeria and Tanzania. To date, the projected has also leveraged more than $15 billion from the private sector.

But to date, many of the Power Africa projects have not targeted rural areas. With that reality, the Power Africa “Off-Grid Energy Challenge” was created to fill the void.

“Power Africa, particularly in the early days, was primarily focused on large transactions for large power facilities to meet the needs of industry and urban centers and is not related what happens to rural communities,” says Berenbach. “So we came up with our strategy which is intended to complement the other efforts.”

When the Off-Grid Energy Challenge program was announced in 2013, the three-year initiative aimed to award 25 grants of up to $100,000 each to African companies and organizations providing off-grid renewable power in the six Power Africa countries. It was originally funded by GE Africa and US African Development Foundation.

But when the first six winners totalling $600,000 were selected in the Challenge’s first round in 2013, it was just three grants each to Nigeria and Kenya.

“In the first round, being a first time effort for US African Development Foundation and GE in Sub-Saharan Africa, we wanted to keep it manageable, working in Kenya and Nigeria, two countries where we had GE offices and the right staffing to support the project closely,” Patricia Obozuwa, Director of Corporate Communications for GE Africa told AFKInsider in an interview.

“We started out by just focusing on two countries and kind of prototyping this to make sure it worked,” says Berenbach.

“The one thing that has changed is that United States Agency for International Development has come on board with this program allowing us to not just double the grants but to triple them, reaching all the countries involved in Power Africa,” says Obozuwa.

During May’s World Economic Forum in Africa, it was announced that entries were open through June 20 for the second round of the Off-Grid Energy Challenge, this time with additional funding from the US Agency for International Development to offer 18 grants of up to $100,000 each for projects in all six Power Africa countries.

Then earlier this month, Power Africa upped their off-grid focus again.

During the two-day US-Africa Energy Ministerial held in Ethiopia on June 3-4, U.S. Secretary of Energy Ernest Moniz announced the Power Africa “Beyond The Grid” initiative – yet another effort to forge partnerships between the US Government and the private sector to promote off-grid technologies.

Over an initial five year period, Beyond the Grid will leverage partnerships with 27 investors and companies committing to invest over $1 billion into off-grid projects in rural areas.