The Beyond the Grid Fund for Africa (BGFA) has finalised the Pre-Qualification stage for its second and third Calls for Proposals. The programme received 17 applications under its second call (BGFA2) in Mozambique and 30 applications under its third call (BGFA3) in Uganda.
“BGFA continues to demonstrate a good level of private sector interest in the financial incentives offered in both Mozambique and Uganda, in spite of difficult market conditions. We are very pleased with the strong level of interest shown by applicants at this initial stage, particularly in the mini-grid funding Lots and from local off-grid service providers,” commented Ash Sharma, Head of BGFA at Nefco.
BGFA2 – Mini-grids in Mozambique
Ten applications have passed the initial, internal completeness check and undergone the process of evaluation and scoring of submitted concept notes by independent evaluators. Of these, seven applicants have subsequently passed the Pre-Qualification stage and will be invited to the Final Application stage in autumn 2021.
BGFA2 aims to incentivise energy service providers to scale up innovative sustainable businesses and thereby accelerate access to affordable and clean off-grid energy for customers in peri-urban and rural areas of Mozambique at specified sites. The BGFA2 call was launched in February 2021.
The BGFA Country Programme for Mozambique has been designed in close cooperation with the Mozambican Energy Fund (FUNAE) and the Energy Regulatory Authority (ARENE), which have 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. Once completed, this financing round is expected to offer a total of EUR 6.7 million in results-based financing to a number of private off-grid energy service providers.
BGFA2 closed for Pre-Qualification submissions on 29 March and received 17 applications, of which 10 passed the internal completeness check. The amount of funding requested by eligible applications in Mozambique was 2.8 times the available funding offered under the call.
BGFA3 – Solar home systems and mini-grids in Uganda
BGFA3 is offering incentives to off-grid energy service providers that are expected to enable the establishment of up to 600,000 energy connections and benefit more than 3 million people in remote areas of Uganda. The total financing included under this third Call for Proposals is EUR 20.7 million, split into three Funding Lots. The indicative individual contract ticket size per company is expected to be EUR 1.2–4 million depending on the Lot. TheBGFA3 call was launched in April 2021, and funding is provided by the Danish and Swedish governments.
BGFA3 closed for Pre-Qualification submissions on 22 June 2021 and received 30 applications, of which 19 passed the internal completeness check. The amount of funding requested by eligible applications in Uganda was 2.3 times the available funding offered under the call.
The BGFA 3 applications will now enter the process of evaluation and scoring of submitted concept notes by independent evaluators. Successful applicants will be invited in early September 2021 to submit full project proposals, including a business plan for assessment under the Final Application stage. Further information will be made available directly to the applicants through the application system SmartMe and communicated at www.beyondthegrid.africa.
Overview of submitted applications under BGFA2 and BGFA3
The applications are distributed among the Funding Lots for both BGFA2 and BGFA3 as follows:
Figure 1: Applications by number
Note: Standalone solar home systems (SHS) includes applications received both under the LS (Launch to Scale) and DS (Direct to Scale) Funding Windows. See BGFA3 Pre-Qualification Guidelines for further information.
The strongest demand was in the Ugandan mini-grid Lot, corresponding to the largest amount of available funding, followed by the Mozambican mini-grid Lot:
Figure 2: Applications by value
The first Call for Proposals (BGFA1), targeted at Burkina Faso, Liberia and Zambia, was launched in September 2020. It received a strong response among energy service providers, and in December 2020, 46 applicants were invited to take part in the Final Application stage. Following a final external evaluation, 15 projects are currently undergoing detailed due diligence. It is expected that selected projects will be contracted in autumn 2021.
The BGFA programme remains open to donors as a cost-effective tool to finance future Calls for Proposals through existing or new country programmes and expand access to clean energy to millions of people in remote areas of Sub-Saharan Africa.
The Beyond the Grid Fund for Africa is a multi-donor facility established and managed by the Nordic Environment Finance Corporation (Nefco). Nefco is an international financial institution focused on environmental and climate investments based in Helsinki, Finland. BGFA is 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 solutions in developing countries.
The current EUR 77 million BGFA programme, which is about to grow to EUR 88 million, was established in 2019 on Sweden’s initiative through the Swedish International Development Cooperation Agency (Sida). Sweden is contributing SEK 635 million (EUR 60 million), with contributions from the Swedish embassies in the target countries. It has since been developed by Nefco into a multi-donor programme. 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 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, providing an initial EUR 5 million (DKK 37.5 million), and is expected to provide an additional EUR 10.8 million (DKK 80 million; subject to final parliamentary approval) to support the expansion to Uganda. Germany, through its development bank KfW, has joined the BGFA country programme for Zambia with a focus on mini-grids, providing EUR 7.5 million.
BGFA supports, in particular, the objective of Sustainable Development Goal 7, 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.