The African Development Bank (AfDB) Group has approved $5.65 million grant to finance Peace Renewable Energy Certificate (P-REC) mini-grid projects in 14 African countries with a view to providing electricity for 856,000 people in the affected countries.
A statement posted on the bank’s website on Wednesday, indicated that initiative would deploy renewable energy certificates as a direct funding instrument for a portfolio of mini-grids in Africa’s most fragile and energy-poor countries, the Bank said.
According to the bank, the P-REC mini-grid projects, co-financed with an equal contribution of $5.65 million from the Nordic Development Fund (NDF), the $11.3 million facility will be managed jointly by Camco Clean Energy, a climate and impact fund manager, and Energy Peace Partners (EPP), a US-registered non-profit organisation that developed the Peace Renewable Energy Certificate label.
It stated that the certificates were sourced exclusively from small-scale mini-grid projects in conflict-affected and energy-poor communities and are purchased voluntarily by multinational corporations seeking to maximize the social and environmental impact of their sustainability investments.
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The AfDB further disclosed that the facility would enter long-term purchase agreements with eligible mini-grid developers across 14 frontier countries, namely Burundi, Central African Republic, Chad, Democratic Republic of Congo, Ethiopia, Liberia, Mali, Niger, Nigeria, Sierra Leone, Somalia, South Sudan, Sudan, and Uganda.
In addition, it stated that developers would receive upfront cash payments in exchange for the rights to the certificates produced, which the facility will then sell to global corporate buyers, channeling hard currency into markets where commercial financing is scarce.
Commenting on the initiative, Manager, Renewable Energy Funds Division and SEFA, AfDB, João Duarte Cunha, said: “Lack of access to capital for rural electrification continues to be a major hurdle for universal energy access in the African continent, particularly in countries experiencing conflicts and fragility. This is the kind of market-making needed to advance Mission 300 objectives.”
Also, Managing Director, Nordic Development Fund, Satu Santala, said: “Countries in Sub-Saharan Africa facing fragile and conflict-affected situations urgently need support and access to clean, reliable energy solutions. By supporting this initiative, we also strengthen the role of Nordic climate leadership—working in partnership, through innovation and responsibility, to advance sustainable energy solutions where they are needed most.”
In his remarks, Camco CEO, Geoff Sinclair, explained: “PAF will provide additional low-cost, non-dilutive capital to energy access projects in fragile states. In doing so, it will provide more communities with access to the benefits of clean energy, boosting jobs, opportunities, and living standards. Camco is pleased to be working with EPP, SEFA and NDF on this important initiative.”
Similarly, Managing Director, Energy Peace Partners, Sherwin Das, said: “The majority of people on the continent without access to electricity live in fragile and conflict-affected countries where renewable energy projects can have outsize impacts – improving health, education, safety and security outcomes. The P-REC Aggregation Facility, based on EPP’s Peace-REC label, can accelerate that transition by converting corporate climate ambition into upfront capital for renewable energy developers who would otherwise struggle to close their project.”
Analysts believe that the collaboration of the AfDB with other leading project’s financiers is a welcomed development, especially when access to fund remains a critical barrier to rural electrification in Africa, especially in fragile and conflict-affected regions.
