Power Africa Drives Off-Grid Investment Across the Continent

Launched in 2014 under the Power Africa initiative, Beyond the Grid serves to catalyze investment in off-grid and mini-grid solutions across sub-Saharan Africa, where electricity access rates remain critically low. The U.S. Government-led initiative utilizes a transaction-focused model that expands access to financing and implements system reforms to drive off-grid infrastructure development, uniting over 40 investors and partners in a $1 billion funding commitment to provide energy solutions for over 600 million Africans who don’t have access to electricity.

Beyond the Grid targets the addition of 25-30 million new connections by 2030 and the expansion of solar home systems and mini-grid connections in partnership with 250+ companies. Meanwhile, its umbrella initiative – Power Africa – seeks to install more than 30,000 MW of cleaner, more efficient electricity generation capacity and 60 million new home and business connections. To achieve these objectives, the sub-initiative provides a range of financing, technical and transactional support mechanisms, from helping off-grid companies maximize their value propositions through market and business intelligence, to developing their business models in line with a given country’s fiscal and regulatory landscape. As a result of these efforts, over 16 million new household and business connections have been added; private off-grid operators have secured over $681 million to scale-up their businesses; and multi-stakeholder partnerships have brought energy access to refugee settlements in Kenya and Uganda, among several other success stories emerging across the continent.

Healthcare Electrification in sub-Saharan Africa

Last September, the U.S. Agency for International Development (USAID) and Power Africa issued $2.6 million in healthcare electrification grants to solar energy companies in nine sub-Saharan countries, with a view to supplying reliable off-grid power to nearly 300 healthcare facilities. In addition to powering households, business and industry to indirectly mitigate the economic fallout of COVID-19, electricity itself has been central to the fight against the pandemic, in terms of powering hospitals and emergency healthcare facilities. As a result, off-grid solutions, specifically in solar, have emerged as viable alternatives to grid-connected infrastructure, as they do not require the construction of capital-intensive transmission lines. Approximately 60% of all healthcare facilities in sub-Saharan Africa lack access to electricity; further, only 34% of hospitals and 28% of health clinics enjoy reliable, 24-hour access.

“Solar energy holds great potential to expand and improve health care delivery in sub-Saharan Africa, and off-grid solar technology offers a clean, affordable, and smart solution to electrify healthcare facilities located beyond the reach of national electricity grids,” said Mark Carrato, Power Africa Acting Coordinator, upon issuance of the grants in September 2020. “Power Africa’s experience shows that off-grid solar energy systems can be rapidly deployed to even the most rural facilities.”

Mini-Grid Development in Madagascar

Last November, Power Africa and USAID awarded $1.2 million in grants to mini-grid developers aimed at electrifying more than 5,200 households and businesses in Madagascar, in which only five percent of rural populations have access to electricity. Off-grid power generation, specifically from renewable sources such as wind, hydro, solar and biomass, can play a vital role in lighting up rural communities while meeting global carbon reduction goals. The Government of Madagascar has announced its intention to produce 85% of domestic power from renewable resources by 2030. That said, barriers to entry and scale remain for private operators, including low access to funds to scale-up projects, unattractive regulatory frameworks, high costs of reaching customers in isolated areas and the need to reduce costs of technology even further. As a result, initiatives aimed at improving business conditions for off-grid energy markets, stimulating regional demand for stand-alone solar systems and maximizing development and climate impact per unit of public financing spent have been met with a high degree of success, and should be replicated across the continent.

According to the IEA’s World Energy Outlook 2019, the African continent requires investment of around $120 billion a year until 2040 to achieve universal, reliable electricity supply. Power Africa serves to address funding needs by directly issuing grants for the development and expansion of new and existing mini-grid projects. Capital is used to procure mini-grid equipment, conduct community outreach activities, attract new customers and provide technical assistance to optimize projects. In Madagascar, Power Africa awarded the grants to three companies with operations that are set to connect approximately 14,000 people and 5,200 households and businesses to electricity.

Energy Capital & Power (ECP) – in partnership with the Africa Energy Chamber’s U.S.-Africa Committee – invites U.S. companies, investors and organizations to participate in the first-ever U.S.-Africa Energy Forum (10 July, Washington D.C. and October 4-5, 2021, Houston, Texas), which will introduce American companies to African opportunities. To learn more about how U.S. firms can advance the agenda of sustainable, long-term investment in African energy, please visit www.energycapitalpower.com. To sponsor, speak or attend the U.S.-Africa Energy Forum, please contact Senior Director James Chester at [email protected]

Join us for the first-ever U.S.-Africa Energy Forum (10 July, Washington D.C. and October 4-5, 2021, Houston, Texas).


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