German development bank allots fresh €49m for African mini-grids

German state-owned development bank KfW has established the Clean Energy and Energy Inclusion for Africa foundation to acquire and install African mini-grids and to offer grant incentives for companies to invest in African renewables.

With an initial budget of €49 million, the clean energy fund will grant-finance mini-grids and distributed generation products such as home solar systems and solar-powered lights, cooling, mills, and pumps.

With the World Bank having estimated up to $12 billion (€10.6 billion) will be needed to set up mini-grids in Africa over the next decade, the German fund has said it will partner with crowd-funding lenders such as Sweden’s Trine to get solar installations and products distributed.

The Clean Energy and Energy Inclusion for Africa foundation wants to back at least 190 mini grids with a total generation capacity of almost 17 MW.

KfW is already committed to a €23.5 million program on behalf of German federal development ministry the Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung to install mini-grids in Mozambique which will power at least 7,000 homes and rural businesses, in some cases by supplying electricity for the first time. That funding line is called the Green Citizen Energy for Africa.

The new KfW fund is aiming to offer more than 350,000 people access to clean electricity.

With the new entity hoping to attract other donors, Switzerland and Australia have already signaled an interest in joining the foundation.