African Renewable Energy Scale-up (ARE Scale-up) Facility

To meet Africa’s constantly increasing energy requirements, support must be provided for mass development of the renewable energy technologies – especially solar energy – that will play such a key role over the coming years, given the recent drop in prices and the emergence of new innovative business models.

In particular, decentralised power generation using small scale renewables is proving to be a viable way to expand energy access. These types of models are growing rapidly in rural zones where they can provide solutions to the rural/urban energy divide and also address the needs of the poorer sections of the population. They significantly enhance living conditions for families.

To address these challenges and support renewable energy projects in Africa, the AFD Group, with the support of the European Union, has set-up the Africa Renewable Energy Scale-Up (ARE Scale-up) Facility aimed at sustaining the growth of the off-grid private sector in Africa. The facility has been designed to rally both public and private stakeholders, as it is composed of:

• A Technical Assistance component, managed by AFD, to strengthen regulatory and institutional frameworks in the countries concerned and to prepare financing of private or public sector renewable energy initiatives in Africa.
• A Guarantee Facility managed by Proparco to support investment in off-grid, mini-grid and decentralised power industry players.

AFD’s actions mostly involve direct support for project preparation for

• projects to develop renewable energy production;
• extension and strengthening of electricity grids to better integrate renewable energies; and
• access to electricity in rural areas via mini-grids.

This support takes the form of pre-feasibility or feasibility studies for projects to be brought to completion. The studies may be technical and financial or environmental and social in nature. Each project goes through a process of public policy dialog with energy ministries, electricity companies, and medium to large rural electrification agencies.