Nigeria, Sierra Leone and the DRC: PowerGen Renewable Energy Platform
Transforming access to clean power across sub-Saharan Africa
Challenge
Enabling the transition to renewable energy is a critical pathway to addressing the global climate crisis whilst clean energy access underpins delivery of a number of the UN Sustainable Development Goals. Despite the need, challenges persist for developers of decentralised renewables across sub-Saharan Africa as they seek to access sufficient finance, and the strategic partnerships required to accelerate access to clean power at scale. This is due to a number of factors, including small project sizes, overall capital availability in the market, perceived risks, a lack of appropriate regulatory frameworks, and the need for subsidies in a growing sector.
Solution
Recognising the need to expand access to mini grids, metro grids and energy solutions to power commercial and industrial (C&I) activity across Nigeria, Sierra Leone, and the Democratic Republic of the Congo (DRC) and the wider region, InfraCo acted as lead investor in a renewable energy platform established by PowerGen Renewable Energy (PowerGen). PIDG Technical Assistance has committed concessional capital to the deal. The investment has catalysed further finance which will enable PowerGen to develop, build, own, and operate a platform of renewable energy projects on the continent.
InfraCo and PowerGen have a strong track record of collaborating on mini-grid roll outs through the Off-grid Power Sierra Leone (OGP) project which saw the two companies co-develop forty mini-grids across the south and east of the country. OGP is now Sierra Leone’s second largest utility, serving 100,000 people. The new investment is expected to enable PowerGen to expand its successful model into new jurisdictions, delivering a total of 23,816 new connections for households, businesses, and C&I customers and benefitting 112,000 people. Contributing to SDG 7 and SDG 8, it is anticipated that access to clean power will lead to an associated increase in productivity, indirect job creation and economic growth. A mix of C&I and domestic customers will enable PowerGen to de-risk the initiative and pursue a more commercial trajectory.
The use of solar off-grid technology will support the transition to renewables whilst efforts will be taken to ensure the resilience of the infrastructure itself to the impacts of current and potential climate hazards – for example, floods, heat-stress, storms, and wildfires – and to implement solutions to conserve and enhance the biodiversity of sites as appropriate. Often, mini and metro grids are, in themselves, more resilient to extreme weather events than centralised power systems, resulting in fewer people being affected by an outage and more rapid recovery.
By demonstrating the viability of deploying decentralised energy solutions at scale, it is hoped that the deal will catalyse further investment into PowerGen’s growth, enabling the company to further expand energy access on the continent in the future.
Being developed by InfraCo with PowerGen, the Danish Investment Fund for Developing Countries and EDFI Management Company, through its EU-funded Electrification Financing Initiative, with support from PIDG Technical Assistance, and the African Development Bank’s Sustainable Energy Fund for Africa.
