PowerGen Renewable Energy is the leading developer in Africa of on-grid and off-grid distributed energy. Founded in 2011, the company has installed over 200 mini grids or 16,000 connections across seven East African countries, providing electricity access to over 55,000 people.

The mini-grids that will be installed in Nigeria are so-called Distributed Renewable Energy systems (DREs) powered by solar PV and battery storage and will provide clean, reliable electricity to 55,000 customers. They will mitigate over 2,000 MT CO2e annually, which is equivalent to removing 500 cars from the road per year. The systems will serve a base of rural residential, commercial, and productive use customers. The project is supported by grant funding from the World Bank and the Nigeria Rural Electrification Agency’s Nigeria Electrification Project (NEP). The equity proceeds will be used to develop and build a total of 28 sites, of which six have already been commissioned, including the pilot site Rokota.

“This equity investment in PowerGen’s mini-grid project can be considered a landmark investment with major strategic importance both for Triodos Investment Management and the African mini-grid sector development”, says Estefanía Matesanz, Senior Investment Manager Private Equity. “The success of this investment results from the combined expertise, creativity and synergies created by PowerGen together with Oikocredit, EDFI ElectriFI, CrossBoundery Energy Access and Triodos IM. We are pleased to be able to contribute to the access to energy in emerging countries with clean and affordable technologies through this deal.”    

Socio-economic development

Nigeria is Africa’s largest economy, but is plagued by poor energy access, particularly in rural areas, where more than 100 million people lack access to electricity or over 70% of the population. This has led many to turn to fossil-fuelled alternatives, like diesel generators and kerosene. The result is poor air quality, greenhouse gas emissions and noise pollution. Together, these represent an undue burden on the health of rural populations that are already marginalised.

The mini-grids empower communities to increase local economic activity by reducing the cost of power and increasing access to productive power, which enables agricultural processing to be mechanise, the use of power equipment such as welding machines and electric cooking appliances and enabling electric mobility. These benefits are as critical as ever as low-income individuals and small businesses manage the economic downturn brought on by the COVID-19 pandemic.

Affordable and reliable

Mini-grids have proven to be more than just a way to provide clean, affordable, and reliable electricity to unelectrified communities. They are essential not only in terms of access to power, but for the entire ecosystems of economies that function on the basis of power. Through mini-grids, these areas are given the chance to boost their socio-economic development thanks to the accelerated development of productive activity, the use of energy-efficient appliances, the development of clean water, irrigation and clean cooking activities, and the development of e-mobility and enhanced educational possibilities in these communities.

“Renewable energy in emerging markets has a strong business case and supersedes fossil-fuelled energy thanks to the amply available natural resources in emerging markets.  We are very keen to finance projects such as PowerGen’s mini-grids, as they contribute to improving access to green and affordable electricity, but also enable the democratisation of energy, while avoiding significant CO2 emissions,” says Marius Groenenberg, Principal Investment Manager Project Finance.

Read the full press release.