The Abu Dhabi Fund for Development (ADFD) and the renewable energy body International Renewable Energy Agency (Irena) have announced $25m in concessional loans for two solar PV projects in Africa particularly in Mauritius and Rwanda.
In Mauritius, the ADFD loan of USD10 million will help the Central Electricity Board install solar PV systems on rooftops of 10,000 households as part of the government’s efforts to alleviate poverty whilst contributing to the national target of achieving 35% of renewable electricity in the energy mix by 2025.
An estimated 35,000 people in low income communities will benefit from significant electricity bill savings.
The project will bring 10 megawatts (MW) of new renewable energy capacity online, resulting in savings of over USD 35 million in fossil fuel imports over the project lifetime and improvements in the energy security of the country.
In Rwanda, the ADFD loan of USD15 million will contribute to the installation of 500,000 off-grid solar PV home systems across the country, providing clean electricity for lighting, mobile phone and radio charging.
The project is a major part of the government’s rural electrification strategy and is one of the most affordable payment schemes in Africa.
It employs a flexible mobile payment platform, essential in areas poorly served by banking and transportation infrastructure. 2.5 million people in rural communities are expected to benefit from improved electricity access, and more than 2,000 local jobs will be created.
“For developing countries, renewable energy is a triple win: it provides a cost-effective means of providing electricity to families, fuels economic growth, and supports energy independence and security,” said IRENA Director-General Adnan Z. Amin.
“However, many developing countries have trouble accessing financing for renewable energy investment. We are delighted that our continued partnership with ADFD will provide a stable, low-cost source of financing to help Mauritius and Rwanda achieve a sustainable energy future.”
The loans cover up to 50% of project costs, leveraging additional funding from other sources. Since 2014,Abu Dhabi Fund for Development has allocated USD214 million to 21 projects, attracting over USD420 million in additional co-financing from governments and development funds.
The decision to support solar PV projects in Africa, especially Rwanda and Mauritius is part of a broader plan by ADFD to boost electricity access in Africa and consequently enhance the economy of the continent.