Solar energy company, ENGIE Energy Access, has secured a EUR 10 million loan from the European Investment Bank (EIB) to support the deployment of 107,000 high-quality solar home systems to Benin. Under the scheme, households, smallholders and entrepreneurs in remote locations across Benin will access electricity for the first time through off-grid solar systems.
An estimated 643,000 people are expected to benefit from the off-grid solar power systems. ENGIE Energy Access will also leverage local currency financing to accelerate Pay-As-You-GO (PAYGO) solutions to enable affordable access to green energy in rural Benin.
The provision of the PAYGO model will allow families unable to afford the upfront costs of solar home systems to pay for the equipment over a duration of some years at less than USD 20 cents a day. The new European Investment Bank financing will also allow repayment of equipment purchased in US dollars in local currency.
Previously, currency fluctuations hindered provision of affordable, clean energy solutions to communities without access to foreign currency. Customers will also benefit from cheaper costs and easier repayment through use of mobile banking.
“Vulnerable communities across Africa are being impacted by global energy shocks triggered by Russia’s invasion of Ukraine and so improving access to affordable and clean energy is even more important to fight poverty, create jobs and empower women and girls. The European Investment Bank is pleased to agree new support for scaling up off-grid solar deployment to West Africa under this new partnership with ENGIE,” said Ambroise Fayolle, Vice President of the European Investment Bank.
“For the first time, more than half a million people across Benin will be able to access electricity that will power communications, provide light and make cooking easier. Deployment of solar home systems will also reduce the usage of kerosene, charcoal, candles and generators to help families save money, reduce pollution and reduce the risk of accidents. Unlocking sustainable, economic and social development through off-grid solar is key for Africa’s future and to reduce the impact of global energy shocks, The EIB is pleased to back this project in Benin,” added Fayolle.
Impact of the solar projects for households in Benin
Following the new agreement between ENGIE and the European Investment Bank, households, entrepreneurs and smallholders across Benin will be able to access electricity for mobile phones, solar lighting, refrigeration, radio and television. This will help farmers to sell their produce, improve the health of communities and create new markets for traders.
Increased provision of reliable and affordable energy will create new opportunities for women and girls and reduce exposure to indoor pollution from current kerosene use.
“Over the last couple of years, the private sector has developed off-grid solutions such as solar home systems (SHS), micro- and mini-grids, which have clearly proven to be sustainable and economical solutions to reach universal energy access by 2030,” said Gillian-Alexandre Huart, ENGIE Energy Access CEO.
“Thanks to the use of digital tools and the strong penetration of mobile money in Sub-Saharan Africa, ENGIE Energy Access sells access-to-energy products to our customers on credit to make them affordable. It is clear that a combination of capital from private investors and impact funds from multilateral funds is needed in order to reach the amount of funding necessary to realise the energy transition and to meet SDG7 in Africa.”
“Our new partnership with the European Investment Bank in Benin will provide ultra-affordable PAYGO systems to people in villages across the country, giving access to clean solar energy and financial empowerment. With its sustainable integrated business model, ENGIE Energy Access is now serving 1.5 million customers, impacting over 7 million lives in Sub-Saharan Africa, reaching people in low-income communities or rural areas who are often left out of the economy,” concludes Huart.