The US$200 million Regional Off-Grid Electrification Project (ROGEP) is expected to help address the key barriers to attract private sector participation in promoting off-grid solar electrification in the fifteen ECOWAS member nations plus four other countries – Cameroon, Central Africa Republic, Chad and Mauritania.
The project, which will be implemented by the ECOWAS Center for Renewable Energy and Energy Efficiency (ECREEE), will support two major work streams. The first work stream focuses on the development of a “Regional Market” and will have a budget allocation of about US $60 million. These funds will contribute to market assessment studies and the identification of policy barriers, as well as help to create a unified regional market for solar products in the nineteen project countries by harmonizing trade policies and strengthening the countries’ bureaus of standards with the adoption of a regional quality standard for standalone solar. The project will also ensure provision of an entrepreneurship development facility; provision of seed funding to local startup entrepreneurs; and provide incentives to attract impact investors through provision of matching grants; while reducing the risk from public institutions to the private electricity service providers.
The second work stream deals with mitigating “Access to Finance” barriers for private enterprises. This follows a financial intermediary approach and will be implemented through Regional Development Banks (RDBs). The RDBs will help manage lines of credit which can be accessed by commercial banks, debt funds, micro finance institutions, leasing companies, securitization firms, and others.
The unelectrified, living mainly in rural areas of Sierra Leone, usually lack access to energy services, and primarily use small diesel or petrol generators and kerosene lamps for their lighting and energy needs. They typically spend 10 to 30 times more on these poor-quality energy sources than those living in urban areas, who benefit from grid connections, often with subsidized tariffs. As standalone solar systems become progressively cheaper – resulting in lower start-up, operation and management costs – they can significantly reduce consumer energy expenditures, while simultaneously improving the quality of the energy services while mitigating the health risks associated with burning kerosene and other similar lamps.
Due to advancements in solar PV technologies, standalone off-grid solar now has the potential to significantly transform electricity access in Sub-Saharan Africa, in particular for consumers who are far from the grid network and unlikely to gain access even in the medium term. Even those who can expect to get access to the grid network in a couple of years, can use standalone solar systems instead of burning kerosene and candles, or living in darkness while they wait.
Successful lessons from existing Lighting Africa supported projects will be scaled up under ROGEP to extend electricity to households and commercial enterprises following a market based model. Two pilot initiatives are ongoing in Niger and Nigeria to identify suitable mechanisms, including technical specifications and commercial arrangements, to electrify public institutions under the project. Lessons from this pilot will inform the project design.
Market assessment of the project countries will be completed by April 2018, and the project is expected to take-off after approval by the World Bank’s Board of Directors in September 2018.