Application Deadline: February 28, 2021.
Impact investor, All On and United States Africa Development Fund (USADF) have announced the 2021 request window for the Off-Grid Energy Challenge, a key element of the ‘Beyond the Grid’ sub-initiative of Power Africa.
Both parties are keen on advancing the agenda of the Power Africa, a US government-led partnership launched in 2013 to double access to electricity in sub-Saharan Africa by 2030.
To accomplish its agenda, the initiative seeks to increase installed power capacity in sub-Saharan Africa by 30,000 megawatts (MW) while creating 60 million new connections. Up to 30 million of the planned new connections are projected to come from off-grid solutions such as solar.
About the challenge.
As a joint initiative of All On and USADF, the Off-Grid Energy Challenge is intended to increase power supply to unserved and underserved communities in Nigeria through sustainable business model solutions.
Using this model, it hopes to expand electricity access through off-grid solutions such as solar home systems or micro-grids.
By granting communities energy access, the framework further hopes that productive and/or household electricity usages will improve, either to meet household consumer needs or help energize productive or commercial activities including agricultural production and processing, commercial enterprises.
To be eligible for consideration and eventual funding, All On and USADF explained that firms applying must be 100 per cent African-owned and majority Nigerian-owned. They equally have to be privately managed companies registered and operating in Nigeria.
Applicants also need to be legally registered in Nigeria and demonstrate the capacity to track and manage the project resources and operate in good standing with the local governments in which they operate.
Additionally, qualifying projects would have to be focused on increasing sustainable energy access, specifically off-grid solutions. In other words, they will need to extend the delivery of electrification to unserved and underserved communities in Nigeria.
Solar, hydro, wind, biomass, biogas, gas, and hybrid systems are considered chief amongst clean energy solutions that would be considered for funding in the challenge.
Proposed projects must also express clearly how they will benefit marginalized, grassroots people in Nigeria, including showing demonstrable positive impacts for female beneficiaries and people living in the Niger Delta.
Furthermore, projects seeking to be nominated would have to clearly show how they will achieve profitability and use the investment funds to achieve this.
The partners equally stated that proposals may not necessarily be for power generation only, and could include the provision of innovative metering, payment systems or other technology that enables access to electricity.
According to the partners, winning applicants will receive an investment in the form of a convertible loan at an affordable interest rate and/or an equity investment. Up to $100,000 is available for each of the selected applicants.
The seed capital will come from All On in the form of grants, and from USADF in the form of Community Reinvestment Grant (CRG) funds. They explained that the CRG intends for grant recipients to recommit a percentage of grant funding to a local organization to further support community-level projects in Nigeria
Beyond the financial gains, other business support aids are included.
To become successful, applicants must be able to develop, scale up or extend use of proven technologies for off–grid energy in Nigeria. They must also show that their solutions will benefit marginalized, or low-income rural or urban populations currently underserved by local Discos.
Ideally, projects with a focus on benefits to women and girls and communities in the Niger Delta which also demonstrate financial sustainability or the potential for financial sustainability will be picked.
Also, the proposed investment period must include approximately three months of generation of electricity and revenue or cash flow from sales; meaning that a good financial framework is essential. Showing proven credentials on project execution will equally give applicants good standing.
Applications for projects leveraging wind, hydro, biomass and gas as the energy source are greatly encouraged, in addition to women-owned or managed business being encouraged.
Once selected, winning proposals will provide off-grid energy to rural or urban areas and populations currently lacking energy access. It will also focus on reaching unserved, underserved or marginalized populations.
Between January 15 and February 28, 2021, All On and USADF will accept applications in the challenge. Submitted applications will subsequently be reviewed by a panel of an expert judges.
Shortlisted applications will be contacted in February and March to begin the first phase of the application process, and applicants who get past to the second phase will be contacted in May and June for due diligence before awards in October 2021.