Sweden launches a major expansion of its African funding programme for sustainable and affordable off-grid electricity in cooperation with NEFCO

Martin Hiller from REEEP and Helle Lindegaard from NEFCO visiting a company that has received financing support from the Beyond the Grid Fund for Zambia, photo by Kari Hämekoski

The Nordic Environment Finance Corporation NEFCO and Swedish International Development Cooperation Agency (Sida) have today signed an agreement to cooperate on expanding off-grid electricity solutions in sub-Saharan African countries. The purpose of this new and major expansion, the Beyond the Grid Fund for Africa (BGFA) is to incentivise the private sector to provide affordable and clean, high-quality off-grid energy services to people living in rural and peri-urban areas in Burkina Faso, Liberia, Mozambique and Zambia. The programme, implemented together with the Renewable Energy and Energy Efficiency Partnership (REEEP), supports the United Nations’ Sustainable Development Goals and the Paris Agreement.

Over 600 million people in sub-Saharan Africa live today without access to electricity. For most of these people, connection to the grid is not likely to happen for decades, or longer. So far, no country has been able to bridge the poverty gap without access to electricity.

The Beyond the Grid Fund for Africa aims to reduce this gap by stimulating and accelerating the emergence of new business models for provision of affordable energy access at scale whilst demonstrating sustainability over time. The programme forms part of the ‘Power Africa’ initiative launched by former President Barack Obama and contributes to the Sustainable Development Goal 7 and the Paris Agreement.

The programme builds on the positive experiences of the Beyond the Grid Fund for Zambia (BGFZ), which Sweden commenced in 2016. Sweden will contribute an initial SEK 500 million (approx. EUR 48 million) to the expansion and is through the cooperation with NEFCO looking to attract other like-minded donors with the aim to convert the Beyond the Grid Fund for Africa into a multi-donor programme over time. NEFCO will manage the new facility and the programme will be implemented in collaboration with REEEP, an expert organisation who has been instrumental to the early success of the Beyond the Grid Fund for Zambia.

“NEFCO is accredited by the EU and the Green Climate Fund and is an experienced fund manager, which is already managing several trust funds for Sida,” says Anders Arvidson, Project Leader for Beyond the Grid Fund for Africa at Sida. “We share the same values as regards environmental, social and gender aspects. Additionally, NEFCO can provide the highest level of fiduciary requirements related to reporting, auditing and anti-corruption.”

Magnus Rystedt, Managing Director at NEFCO sees great potential for small and medium-sized businesses in the programme: “We are very happy for this opportunity to make use of our considerable experience in setting up and administrating multi-donor instruments and create new, innovative green growth financing opportunities for small-and medium sized private energy companies.”

The core function of the Beyond the Grid Fund for Africa is to offer financial incentives to selected private companies for the development of high quality energy services and products under sustainable and inclusive market conditions including solar home systems and microgrids. The planned period of implementation is six years and the programme is expected to benefit 5 to 15 million rural and peri-urban people in the participating countries.

“It fits into a key gap between the early-stage support traditionally offered by challenge funds and equity and commercial debt needed for transitioning to scale in sub-Saharan Africa. The approach is to provide results-based public financing that seeks to unlock early structural challenges in the market, build business and investor confidence, and proactively mobilise various types of downstream investment and debt financing,” says Helle Lindegaard, Head of Trust Funds and Climate at NEFCO.

“As we near the landmark achievement of providing modern energy to 500,000 people in rural and peri-urban Zambia, we are delighted to see Sweden make this tremendous commitment to universal access to energy in Africa, and look forward to working with NEFCO and Sweden to make these ambitious targets a reality in the coming years,” said Martin Hiller, Director General of REEEP.”

Sustainable Development Goal 7 strives towards universal access to affordable, reliable, sustainable and modern energy by 2030. Read more at sustainabledevelopment.un.org/sdg7

For further information, please contact:

Helle Lindegaard, Vice President, Head of Trust Funds and Climate
Helle.lindegaard [at] nefco.fi, tel.: +358 10 6180 664

Anders Arvidson, Project Leader at Sida
anders.arvidson [at] sida.se, Tel: +46 (0)8 698 53 73

About Sida / Sweden

The Swedish International Development Cooperation Agency (Sida) is a government agency working on behalf of the Swedish parliament and government, with the mission to reduce poverty in the world. Through its work and in cooperation with others, Sida contributes to implementing Sweden’s Policy for Global Development. The Swedish development policy aims to enable people living in poverty to improve their lives. Another part of Sida’s mission is reform cooperation with Eastern Europe. The third part of Sida’s assignment is to distribute humanitarian aid to people in need of assistance. Sida carries out enhanced development cooperation with a total of 35 countries in Africa, Asia, Europe and Latin America. Read more at www.sida.se.

About NEFCO

NEFCO is an international financial institution (IFI) established in 1990 by the five Nordic countries: Denmark, Finland, Iceland, Norway and Sweden. NEFCO’s purpose is to promote green growth and climate actions, which help governments and other co-financiers to reach their environmental and sustainability goals. NEFCO focuses on small and medium-sized projects with tangible results, providing high additionality to its stakeholders. Due to its extensive network within the green community and proven ability to connect stakeholders and different financiers to relevant projects, NEFCO has managed to attract a considerable number of trust fund assignments. Over the years, NEFCO has implemented more than 900 private and public projects across different sectors in 51 countries, with focus on Eastern Europe, the Baltic Sea, and the Arctic and Barents Regions, but it has also considerable experience outside this region, including Africa. NEFCO’s headquarters is located in Helsinki, Finland. It also has an office in Kyiv, Ukraine, and is represented through long-term engaged consultants in St Petersburg, Russia. Read more at www.nefco.int.

About REEEP

REEEP is an international multilateral partnership, constituted as a Quasi International Organisation based in Vienna under Austrian Law that works to accelerate market-based deployment of renewable energy and energy-efficient systems in low- and middle-income countries. REEEP’s work contributes to global efforts under the United Nations 2030 Agenda for Sustainable Development to advance energy access; combat climate change and improve resiliency; reduce damage to the environment; improve livelihoods; and facilitate economic growth where it matters most. Read more at www.reeep.org.


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