Green mini-grid provider PowerGen has teamed up with CrossBoundary Energy Access (CBEA) to build and operate mini-grids powered by small-scale solar photovoltaic plants with battery storage systems. This project will electrify 55,000 people in rural Nigeria.
The PowerGen and CrossBoundary Energy Access (CBEA) project is supported by several investors who have already raised $9 million. These are Oikocredit, Triodos Investment Management (Triodos IM) and EDFI ElectriFI (Electrification Financing Initiative), a European Union funding mechanism, as well as Energy Access Ventures (EAV). The funded project involves the construction of 28 small solar power plants with battery storage systems.
The facilities, located in rural areas, will feed into mini-grids capable of providing access to electricity to 55,000 people in Nigeria. “The structuring of the transaction allows the financial partners to segment their investment in the construction phase, and CBEA, as the asset owner, to segment its investment in the long-term operation phase. This is a first for mini-grids in Africa at this scale and shows how innovative financing structures can bring private capital into the sector,” says PowerGen.
The solar mini-grids built by PowerGen will be purchased by CBEA. This diversifies the company’s offerings in Africa, as it provides solar power to commercial and industrial customers south of the Sahara. PowerGen already operates 6 solar mini-grids in rural areas in Nigeria. For the 28 new installations, the company led by Aaron Cheng will maintain them.
The two partners estimate that the future green mini-grids will prevent the emission of 2,000 tonnes of CO2 equivalent per year, which is equivalent to taking 500 cars off the road per year. The installations will also boost economic activity in rural areas, with small businesses gaining access to electricity. The project is also supported by the World Bank under the Nigeria Electrification Project (NEP). Specifically, the Rural Electrification Agency (REA), which implements the NEP, provides a fixed subsidy for each household electrified.
Jean Marie Takouleu