The Abu Dhabi Fund for Development (ADFD) and the renewable energy body, International Renewable Energy Agency (Irena) have announced US $25m in concessional loans for two solar PV projects in Mauritius and Rwanda.
In Mauritius, the ADFD loan of US $10m will help the Central Electricity Board install solar PV systems on rooftops of 10,000 households. This is part of the government’s efforts to alleviate poverty. About 35,000 people in low income communities are set to benefit from the project in terms of significant electricity bill savings.
The project will bring 10 MW of new renewable energy capacity online. It will result in savings of over US $ 35m in fossil fuel imports over the project lifetime. Furthermore it will improve the energy security of the country.
In Rwanda, the ADFD loan of US $15m will contribute to installation of 500,000 off-grid solar PV home systems. This will provide clean electricity for lighting, mobile phones and radio charging across the country.
The project is a major part of the government’s rural electrification strategy. It is also 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 will benefit from improved electricity access. In addition, more than 2,000 local jobs will be created.
According to IRENA Director-General Adnan Z. Amin, for developing countries, renewable energy is a triple win. This is because, it provides a cost-effective means of providing electricity to families, fuels economic growth, and supports energy independence and security.
However, many developing countries have trouble accessing financing for renewable energy investment. 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 US $ 214m to 21 projects. This in turn attracted over US $420m in additional co-financing from governments as well as 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.