GEAPP injects $16 million into Africa’s off-grid energy drive

From the newsletter

Africa’s off-grid energy sector has received a $16 million boost from the Global Energy Alliance for People and Planet. The funding is part of a World Bank and AfDB-led initiative to connect 300 million people in Africa to electricity by 2030. Since its launch in 2021, it has awarded $503 million in catalytic funding, unlocking $7.8 billion in total investment.

• The organisation is now seeking more philanthropic partners as foreign governments cut aid, and the need for affordable capital to reach rural communities grows.

• Private sector funding is rising as African countries streamline policies, but high lending rates still make rural electrification costly.  

More details

• The funding will be distributed across several African countries, including the Democratic Republic of Congo (DRC), Nigeria, South Africa, and through Odyssey Energy Solutions to serve Sierra Leone, Madagascar, and Nigeria. The DRC will receive $7 million via the government-backed Mwinda Fund to support mini- and metro-grid projects. 

• Nigeria will receive over $2 million to scale interconnected mini-grids, targeting 100 MW initially and building a 500 MW pipeline. South Africa will benefit from $1.5 million channelled through the Just Energy Transition. Odyssey Energy Solutions will get $5 million to aggregate equipment demand across Sierra Leone, Madagascar, and Nigeria, unlocking up to $125 million in clean energy investment.

• Africa is home to at least 600 million people without access, while for many others with access, it is still unreliable or unaffordable. Challenges include high lending costs, lack of capital for infrastructure, and huge inefficiencies, with the continent losing over 20% of generated electricity, and countries like Nigeria losing nearly half of their power. These have crippled progress with some countries like DRC and Ethiopia experiencing a faster population growth rate than electricity access.

• To close this affordability gap, blended financing mechanisms have gained prominence, bringing together grants, concessional loans, and private investment to make projects viable, especially in rural areas. Development finance institutions and multilateral banks such as the World Bank and AfDB have already provided more than $2 billion in concessional support since the start of the year, which has gone a long way to lowering project costs and expanding clean energy access. But more partnerships are needed to scale.

• Woochong Um, CEO of the Global Energy Alliance for People and Planet, said: “Our Alliance’s work in Africa, including Mission 300, is proof of what’s possible when governments, business, and philanthropy act together with urgency and purpose — turning ambition into real power, real jobs, and real opportunity for millions across the continent.”

• However, solutions must be tailored to Africa’s diversity. Countries vary widely in terms of resources, income levels, and technology preferences. Business models must account for risk assessments and provide new ways of lending to those without credit histories but with other forms of security, such as land. Equally important is ensuring that energy is not only delivered for basic needs like lighting but also for productive uses, powering agriculture, businesses, and industries, which are best served by mini-grids.

• Jon Creyts, CEO of RMI, highlighted this potential: “Interconnected mini-grids are a game-changer for Nigeria’s energy future. By combining on-site renewables with grid power, mini-grids deliver reliable, affordable electricity to underserved communities, reduce reliance on costly diesel, and create new value for developers and utilities. With support from the Energy Alliance, we’re scaling this model to accelerate energy access for millions of Nigerians.”

Our take

• Electrification must go beyond lighting and phone charging. Prioritising power for agriculture, cold storage, and small businesses will boost incomes, create jobs, and strengthen repayment capacity for mini-grid operators.

• There is great value in aggregating demand, and this model needs to be extended in areas like investing in local manufacturing of panels, batteries, and meters. This could reduce costs, create jobs, and cut reliance on imports.

• High interest rates remain one of the biggest barriers to rural electrification. Innovative lending, such as carbon credits, can lower costs and open new channels of capital.