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The African Development Bank (AfDB)-managed Sustainable Energy Fund for Africa (SEFA) approved a US $983,000 grant to support the government of the Republic of Burkina Faso to create an enabling framework for increased private sector investment in renewable energy mini-grids.
Energy access is marked by a large disparity between urban (59%) and rural areas (3%) at an overall electrification rate of 18.8% in 2016. The Government of Burkina Faso (GoBF) has set ambitious targets for raising the overall rate to 36% by 2020 and 75% by 2030.
The country is already familiar with the concept of mini-grids through 50 mini-grids installed by the Electrification Development Fund (known by its French acronym FDE), powered by diesel generators and mostly managed by female farmers’ cooperatives. There is, however, acknowledgement that the current practice of public-driven electrification programmes – depending mainly on donor financing – is insufficient to meet the targets, and an attractive institutional framework is needed to trigger private sector investment.
The proposed SEFA Green Mini-Grid country programme will review and recommend improvements to the energy sector policy to promote RE-based Mini Grids for raising the national electrification rate; develop a regulatory framework including tariff framework, establish GMG technical standards & guidelines; conduct assessment of the existing diesel-powered mini-grids and draw up a sustainability plan including recommendations for substitution by potential RE technologies, private/public investment and business models; recommend a financial incentive framework for GMG investments.
“A new mini-grid deployment model, based on solar energy, will unlock private investment across the 3,000 localities that have been identified for the country programme,” said Ousseynou Nakoulima, the African Development Bank’s Director for Renewable Energy and Energy Efficiency. In that regard, SEFA support will be instrumental in formulating the appropriate strategy and regulatory framework.
The project aligns with the Bank’s New Deal on Energy for Africa Strategy targeting universal energy access by 2025. It also supports the SEforALL objectives by promoting energy access through increased use of renewable energy technologies and leveraging of private sector financing. Concurrently, the GoBF is committed to increase electricity access through maximum utilisation of indigenous renewable energy resources, as formulated in the country’s Energy Sector Policy 2014-2025 (POSEN 2013).
Launched in 2012, SEFA is a US $95-million multi-donor facility funded by the governments of Denmark, the United Kingdom, the United States and Italy. It supports the sustainable energy agenda in Africa through grants to facilitate the preparation of medium-scale renewable energy generation and energy efficiency projects; equity investments to bridge the financing gap for small- and medium-scale renewable energy generation projects; and support to the public sector to improve the enabling environment for private investments in sustainable energy. SEFA is hosted by the Renewable Energy Department of the AfDB.