Denmark is joining the Beyond the Grid Fund for Africa (BGFA) initiative as regards a planned expansion to Uganda. The initial Danish contribution, through the Ministry of Foreign Affairs, is DKK 37.5 million (EUR 5 million) over 5 years and seeks to provide off-grid solar power to up to 500,000 people currently without access to electricity in Uganda.
The Danish contribution will also finance a sub-programme on job creation and skills development. This part of the planned Uganda country programme will aim to create at least 300 decent jobs within the off-grid solar energy sector and is targeted, in particular, at youth and gender equality and efforts to pilot skills development in the Uganda solar energy sector. BGFA is currently undertaking market scoping to design the expansion and this sub-programme.
“Despite Denmark’s small size, our ambition is to take leadership for driving a global inclusive green transition. The Danish Government has set a target to contribute to 5.8 million people gaining access to clean energy by 2023. With the Danish support to the Beyond the Grid Fund for Africa, we expect to be able to contribute to providing access to off-grid renewable energy for up to half a million people in Uganda and create new decent green jobs in the solar energy sector, ” commented Flemming Møller Mortensen, Danish Minister for Development Cooperation.
NEFCO started the BGFA programme in 2019 with the ambition to turn it step-wise into a multi-donor programme. The Swedish International Development Cooperation Agency (Sida), through Swedish Embassies in five currently targeted Sub-Saharan African countries, is the initial and largest donor, but already in June this year, Power Africa, through USAID, joined the BGFA programme with an important in-kind contribution. With Denmark now joining activities in Uganda and Germany about to join activities in Zambia, the BGFA programme has already grown from initially approx. EUR 48 to currently approx. EUR 78 million.
The core function of the BGFA programme is to provide results-based finance incentives to selected private companies, which in return will offer high quality and climate-friendly off-grid energy services and products under sustainable and inclusive market conditions to rural and peri-urban people in the target countries. The Uganda window is currently in a market scoping and programme design phase with a view to launching a Call for Proposals in the second quarter of 2021.
Helle Lindegaard, Vice President, Head of the BGFA Unit at NEFCO, stated “We are very pleased to welcome Denmark as a new Nordic contributor to the BGFA programme. As recognised by all at the Climate Ambition Summit a few days ago, bold leadership, concrete actions and innovate financing to swiftly reach scale are more needed than ever to meet the goals we set 5 years ago.”
In September 2020, BGFA launched its first Call for Proposals offering EUR 30 million under Country Programmes in Burkina Faso, Liberia and Zambia. The Call received 84 applications and demonstrates there is a strong demand for results-based financing in delivering much-needed energy access in Africa, particularly in these testing times of COVID-19.
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 solely on environmental and climate investments. BGFA, in the five presently targeted countries, 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, by the Swedish International Development Cooperation Agency (Sida) through 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. Germany, through its development bank KfW, will join the Country Programme for Zambia (pending final approval), with the focus on mini-grids.
Uganda’s ‘Vision 2040’ is aligned with the objectives of Sustainable Development Goal number 7 (SDG7). The goal to reach universal access to energy pushes Uganda to promote initiatives for access to clean, affordable and reliable energy sources as a critical factor for economic growth, poverty reduction, and sociocultural transformation of society. This will require the deployment of both grid supply and off-grid supply of electricity. It is estimated that only 28 per cent of the Ugandan people currently have access to electricity. The core function of BGFA is to address this need by providing financial incentives to selected private companies, which in return will offer high quality energy services and products under sustainable and inclusive market conditions to rural and peri-urban people in Uganda.
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 regarding Goal number 13 to take urgent action to combat climate change.
For further information
Ash Sharma, Head of BGFA, NEFCO
Ash.firstname.lastname@example.org, M: +358 50 471 2850
Press Advisor for the Minister for Development Cooperation, Ministry of Foreign Affairs of Denmark
email@example.com. M: +46 25 749 150
Lia Oker-Blom, Communications Officer, NEFCO
firstname.lastname@example.org, M: +358 50 325 6610