Malawi is set to benefit from the African Development Bank (AfDB) $160 million (about K118 billion) facility for small-scale renewable energy.
This follows commitments from the AfDB, the European Commission, KfW, the Clean Technology Fund, Norfund,and other investors towards the Facility for Energy Inclusion (FEI) whose initial pipeline projects have been identified in Burundi, Cape Verde, Madagascar, Malawi and Mozambique.
AfDB acting vice-president of power, energy, climate and green growth Wale Shonibare said in a press statement published on AfDB website that the bank looks forward to seeing FEI catalyse financing for new energy sector business models and accelerate our efforts to electrify Africa.
“After three years of hard work, we are pleased to see the second and larger piece of our energy access debt funding platform — FEI—up and running on the back of very significant commitments from our partners,” said Shonibare.
KfW Southern Africa head of division infrastructure Babette Stein von Kamienski said their junior equity investment aims at mobilising public equity and private debt investors to scale up the financial means available for innovative renewable energy projects like new mini-grids to electrify Africa.
Malawi continues to face power supply challenges from the national grid despite licensing a number of independent power producers (IPPs), most of whom are yet to rollout.
Escom has set a 2022 target to meet electricity demand, largely from the power interconnection deal with Mozambique currently being worked out.
In December 2019, demand for electricity during peak hours stood at 303.1MW.
The facility supports small-scale IPPs delivering power to the grid, mini-grids and captive power projects.
FEI is a targeted $400 million (about K296 billion) fund to improve energy access across Africa through small-scale renewable energy and mini-grid projects.
Spearheaded by the AfDB, FEI serves as a financing platform to catalyse financial support for innovative energy access solutions.
The bank, as the facility’s anchor sponsor, has put up $90 million in financing. That sum includes $20 million that the bank is providing in its capacity as the implementing agency of the Clean Technology fund.