The project is financed through the Bank’s African Development Fund, in addition to co-financing mobilised by the Bank from the Green Climate Fund (GCF), and the European Union. The project will also leverage private sector investments through equity and debt raised from commercial banks.
The project financing is made through performance based-grants (mini-grid operators will receive a proportion of the grants when effective connections are realised and verified), sovereign loans, commercial loans, and private sector equity. The grants will enable the mini-grids to operate with competitive and affordable tariffs, which will assure the sustainability of the model during the concession’s duration without additional subsidies. Additionally, the issuance of a GCF-Funded guarantee by the African Guarantee Fund (AGF) will encourage local micro-finance institutions and commercial banks to extend loans for productive equipment to local entrepreneurs.