Nairobi, Kenya, November, 30th 2017: Sweden International Development Cooperation Agency (Sida) and Africa Enterprise Challenge Fund (AECF) have signed a five year agreement worth 400 million SEK (US $48 million) to fund the Renewable Energy, Adaptation and Climate Change Technology sub-Saharan Africa (REACT SSA) window.
“During my travels in rural Kenya I have seen how important it is for households, especially for women and girls, to get access to basic electricity. These systems are often based on solar cells that decrease indoor air pollution and lower the cost for poor households as it substitutes kerosene,” said the Swedish Ambassador, Anna Jardfelt Melvin, on signing the five-year agreement.
The REACT SSA competition targets small and medium-sized companies (SMEs) in Ethiopia, Kenya, Zimbabwe, Mozambique, Liberia, Burkina Faso and Mali to stimulate SMEs, to develop business models, efficient services and products in the renewable energy sector that improve the lives of the rural poor.
“We look forward to working with our development partners as we take this initiative forward. The generosity of the Swedish people and the scale of Sida’s commitment to a Pan-African approach towards meeting the SDGs is an example of best practice that should be widely emulated,” said AECF Board Chairman, Lord Paul Boateng. “This represents an endorsement of the new AECF and its approach to the key role the private sector plays in promoting rural jobs and reduction of poverty across Africa.”
Over the past six years, the REACT window has demonstrated the potential of renewable energy technologies and businesses to reach Africa’s rural communities.
“We hope that the new business models developed in East Africa, providing electricity to millions of people off the national grid, will rapidly be taken up in Liberia and generally in West Africa, promoting learning across the continent,” says SIDA Head of Development Cooperation – Liberia, Elisabeth Hårleman.
REACT SSA is open to small and medium-sized enterprises (SMEs), to develop business models, services and products in renewable energy and energy efficiency that improve the lives of the rural poor. The companies will be selected through competitions that will be run from June 2018.
“REACT SSA will leverage atleast an additional 360 million SEK from the private sector as matching funds to the 400 million SEK granted by Sida,” added Dr. Paul Greener, CEO, the AECF.
About 60% of the population in sub-Saharan Africa (SSA) do not have access to electricity and are forced to rely on kerosene, fire wood or batteries - solutions that are expensive, unreliable and environmentally unsustainable. While the demand for energy in rural areas is increasing, the provision of electricity is skewed greatly towards higher-income households and urban areas, leaving out a large proportion of the target population.
Increased access to clean energy reduces the binding constraint to growth that a lack of power represents in rural areas. Providing low cost, clean energy will improve the lives of the poor as their children will be able to read, write and study using cost-effective lighting, as well as reducing indoor air pollution caused by kerosene lamps.
The support to the REACT SSA window is part of Sweden’s special efforts to promote renewable energy and energy efficiency in sub-Saharn Africa and its comittment to mobilize one billion dollars over the next ten years, the Paris Agreement on Climate Change and Sustainable Development Goals (SDGs).
Sweden 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 our work and in cooperation with others, we contribute to implementing Sweden’s Policy for Global Development (PGU). We implement the Swedish development policy that aims to enable people living in poverty to improve their lives. Another part of our mission is reform cooperation with Eastern Europe. The third part of our assignment is to distribute humanitarian aid to people in need of assistance.
About the AECF
AECF is an Africa-based USD $304 million Enterprise Challenge Fund that works with the private sector on a risk sharing basis across 23 African countries to reduce poverty. It provides catalytic funding as grants or zero interest loans to private sector businesses that have a positive impact on the rural poor in Sub-Saharan Africa. The fund awards grants and/or loans to projects focused on agriculture, agribusiness, renewable energy and adaptation to climate change with the aim of improving household incomes and reducing rural poverty. The fund is supported by Australia, Canada, Denmark, The Netherlands, Sweden and United Kingdom governments, international financial institutions, Consultative Group to Assist the Poor (CGAP) and IFAD.
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