AfDB– African Development Bank has approved a financing program for Distributed Energy Service Companies (DESCOs). The multinational financing program will be a means to deploy solar power to 900,000 households and up to 4.5 million people across Sub-Saharan Africa by 2025.
The program will promote secured financing techniques for DESCOs and also support their growth and expansion to new and emerging markets. It will enable local currency funding for DESCOs and also support local lenders with risk mitigation instruments.
This innovative program will aid the installation of about 45 MW solar PV that will provide clean energy access to about 900,000 households by 2025. Through this program, about 6000 direct jobs will be created for the youths. It will also help in cutting off 37.08 kilotons of CO2eq emissions every year.
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Wale Shonibare, the Bank’s Acting Vice-President for Power, Energy, Climate Change, and Green Growth said, Innovations such as receivables-backed funding structures, provided by the program are part of the Bank’s efforts to unlock private sector participation and local currency financing for the energy sector.
The program will disburse a EUR 50 million guarantee facility and EUR 6 million technical assistance grant by the European Fund for Sustainable Development which is part of the European External Investment Plan.
This energy program will augment the impact of DESCOs by granting them access to funds needed for their operations.