The Africa Enterprise Challenge Fund (AECF) is launching the second phase of a program to provide grants and technical assistance to renewable energy providers in Somalia. The program is funded by the Swedish International Development Agency (SIDA).
The second phase of the REACT SSA (Renewable Energy and Climate Technologies in Sub-Saharan Africa) Somalia program is launched. The Africa Enterprise Challenge Fund (AECF) initiative aims to support the development of Somali-based companies specializing in the installation of renewable energy solutions. The program also benefits microfinance institutions that are commercially active in the renewable energy market.
With a budget of $61 million and funded by the Swedish International Development Agency (SIDA), the REACT SSA program aims to catalyze the private sector to increase the supply of cleaner fuels, raise awareness of the dangers of indoor air pollution, while promoting clean energy technologies. The program finances solar home systems, stand-alone solar systems for productive uses, green mini-grids, and clean fuels such as ethanol for cooking.
What support for renewable energy providers?
In Somalia, the second phase of REACT SSA will provide grants of between $100,000 and $1.5 million to qualified companies. These grants “will be awarded after the achievement of mutually agreed upon milestones,” the AECF says. According to the fund, the grants will be awarded to commercially viable businesses, 25% of which will be owned or managed by women.
“This initiative encourages private sector investment and innovation in low-cost clean energy solutions. Companies that will receive grants and technical assistance must provide affordable, quality clean energy products and services that benefit low-income populations in rural and peri-urban areas, especially women,” says Victoria Sabula, AECF’s executive director.
As part of its tender for the second phase of the REACT SSA program, the fund is strongly encouraging companies based in the Hirshabelle, South West and Banadir regions, or strategically planning to invest there. For the record, Somalia does not have a national power grid. It collapsed along with the government at the start of the civil war in 1991. With the timid return of peace in the country, electricity supply is mainly provided by private companies. The AECF’s initiative is therefore a boon for these energy providers.
Jean Marie Takouleu