The Beyond the Grid Fund for Africa (BGFA) was set up on the initiative of the Swedish Government with the goal of incentivising the private sector to provide sustainable, affordable, clean, high-quality energy services to underserved people in off-grid rural areas. In February 2021, BGFA will continue its expansion to Mozambique and invite interested energy service providers (ESPs) to compete for a funding window geared specifically towards developers of micro-grids. Successful applicants will be able to deploy innovative technology and strong business models to supply energy services tailored to customer needs and ability to pay, and to scalable generation capacity in accordance with the growth in actual demand.
The BGFA programme builds on the award-winning initial pilot phase in Zambia, the Beyond the Grid Fund for Zambia (BGFZ), and has recently closed the pre-qualification phase of the Call for Proposals in Burkina Faso, Liberia and Zambia (BGFA1) with 79 received applications.
‘’Sweden has supported the development of energy infrastructure for many years with the aim to increase access to electricity services from renewable energy sources. The entry of the Beyond the Grid Fund for Africa is an excellent step for Mozambique’s energy infrastructure and to connecting its rural communities to affordable and sustainable sources of energy,’’ says Mette Sunnergren, Swedish Ambassador to Mozambique. ‘’The model, which has been proven to work in Zambia, has been adapted to suit Mozambique’s specific requirements and electrification needs, and it will contribute to Mozambique’s goal and the Sustainable Development Goal of achieving universal access to sustainable energy by the year 2030.”
This funding window has been designed in cooperation with the Mozambican Energy Fund (FUNAE), which has contributed substantially to off-grid energy access over the last 20 years. The roll-out is expected to be implemented under a pilot licensing framework focusing on the provision of off-grid energy services within specified energy service areas. The energy services will be rolled out during a four-year period with total funding of EUR 6.7 million.
‘’The emphasis and central objective of the BGFA programme in Mozambique is to attract private sector participation and investment and to create the conditions for sustainable business models in the provision of high quality, affordable energy services to rural areas,’’ says António Osvaldo Saíde, CEO of FUNAE. ‘’With more than two-thirds of the population without access to electricity, there is significant unmet demand for modern energy services and considerable potential for expanding the off-grid energy services market in Mozambique. Business models will need to be tailored to the needs of these consumers and take into account limited disposable incomes.’’
The launch of the pre-qualification stage is expected in the beginning of February 2021 with the publication of the pre-qualification guidelines. The conditions for this second round of BGFA funding (BGFA2) will be similar to those outlined in the pre-qualification guidelines for BGFA1 and adapted for Mozambique. Interested parties can refer to this document for an overview of how the programme works, in particular with regard to:
- Eligible costs under BGFA
- Disbursement of funds
- Energy service tier matrix for micro-grids and productive use
- PQ eligibility criteria for micro-grids (applicants, financial position, professional capacity, market experience, eligible projects)
- Key evaluation criteria
- Annexes A-E
Once the pre-qualification documents have been published, applicants will be invited to register for the online application tool, available through the Beyond the Grid Fund for Africa’s website at www.beyondthegrid.africa/register/ and submit possible questions through this system.
The Beyond the Grid Fund for Africa is a facility established and managed by the Nordic Environment Finance Corporation (NEFCO). NEFCO is an international financial institution focused on environmental and climate investments. BGFA is designed and implemented in partnership with the Renewable Energy and Energy Efficiency Partnership (REEEP), an international multilateral partnership based in Vienna, Austria, working to accelerate market-based deployment of renewable energy and energy efficiency in developing countries.
The facility is funded by Sweden through the Swedish International Development Cooperation Agency (Sida) and Swedish embassies in the target countries. Power Africa, an initiative administered by USAID, is providing an in-kind technical assistance contribution worth approx. EUR 4 million (USD 4.5 million) over three years in order to help operationalise the initiative and develop a pipeline of commercially viable projects within the framework of BGFA. Denmark, through the Ministry of Foreign Affairs, joined the BGFA programme in December 2020 with DKK 37.5 million (EUR 5 million) to support a planned expansion to Uganda. Germany, through its development bank KfW, will join the BGFA1 country programme for Zambia (pending final approval), with a focus on mini-grids. The facility remains open to donors as a cost-effective tool to finance future Calls for Proposals through existing or new country windows and bring access to clean energy to millions of rural Africans.
BGFA supports, in particular, the objective of Sustainable Development Goal number 7, which aims to ensure access to affordable, reliable, sustainable, modern energy for all by 2030, as well as the Paris Agreement on climate change and host country priorities.