MySol Grid Zambia, a subsidiary of Engie Energy Access (EEA), has secured a $7.5 million loan from the Energy Inclusion Facility (FEI) to build 60 mini-grids. The projects bring electricity to more than 40,000 people in rural areas.
MySol Grid Zambia, a subsidiary of EEA, secured the funds from FEI, which was established by the African Development Bank and managed by British investment bank Cygnum Capital.
MySol Grid Zambia is a leading player in the African offgrid market. In 2022, the EEA sold more than 1.5 million solar PV systems and 16 mini-grids in operation, when US PV system company Fenix International, Berlin-based Mobisol and Engie PowerCorner mini-grids were brought under one roof. Its projects have affected 7 million people in nine African countries.
Last year, EEA signed Africa’s largest mini-grid transaction with CrossBoundary Energy Access, worth $60 million, to provide access to electricity to over 150,000 people in Nigeria. However, according to the International Energy Agency (IEA), the solar mini-grid sector needs $187 billion in investment to achieve universal energy access by 2030.
Following the latest transaction, MySol Grid Zambia builds, owns and operates mini-grids under the IAEREP programme. As part of IAEREP, the European Union previously awarded 6 million euros ($6.5 million) in grants to Engie’s offgrid unit in connection with the EU’s Global Gateway initiative.
“Attracting collateral-free long-term debt financing for mini-grid projects is proof of the viability of the business model and the legitimacy of renewable mini-grid projects in the rural electrification landscape,” said Gillian-Alexandre Huart, CEO of Engie Energy Access.
However, this is a far cry from the $23.3 billion needed to achieve the SDG7 goal of clean and modern electricity for all. Today, more than 730 million people still live without access.
Especially in Zambia, the need for rural electrification is strong. According to World Bank data, in 2021 Zambia’s national electrification rate was 46.7 percent, with only 14.5 percent of the rural population having access to electricity.
The country’s population is scattered in rural areas, which makes expanding the national grid economically and technically challenging. Therefore, decentralized energy solutions, including offgrid solar power, are crucial to the Zambian government’s efforts to achieve the official goal of energy availability by 2030. The goal announced by the government by 2023 was to introduce 500 MW of solar electricity.