Power Africa Awards $1.2 Million in Grants for the Development of Mini-Grids in Madagascar

On November 23, 2020, Power Africa, through the United States Agency for International Development (USAID), awarded grants totaling $1.2 million to mini-grid developers lighting up more than 5,200 households and businesses in rural Madagascar.

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Off-grid Electricity Vital to Electrify Madagascar

Although rich with renewable energy resources like solar and wind, only 5 percent of rural Madagascar has access to electricity, resulting in dependency on candles, batteries, and firewood to meet daily energy needs.

Off-grid electrification solutions, such as mini-grids, can play a vital role in electrifying Madagascar’s rural areas. However, private developers and operators capable of installing and operating mini-grid systems often struggle to enter and expand the mini-grid market because they lack access to project financing.

A mini-grid is an off-grid electricity distribution network involving small-scale electricity generation.
A mini-grid is an off-grid electricity distribution network involving small-scale electricity generation. Photo Credit: Henri Fraise Fils & Cie

Helping Developers and Operators Break Into the Off-grid Market

Power Africa launched the “Power Africa Madagascar Mini-Grid Development Grant” to bridge the financing gap and support implementation of new mini-grid projects as well as expansion of existing mini-grids to new customers.

Following a request for applications in May 2020, 17 companies applied for grant funding. After evaluation, shortlisting and negotiation phases, Power Africa awarded grants to three companies: Autarsys Madagascar, Henri Fraise Fils & Cie, and Hydro Ingénierie Etudes et Réalisations (HIER). Collectively, the three companies project that this grant funding will help them bring electricity to approximately 14,000 people.

The Challenge

  • Mini-grid developers are experiencing funding shortfalls and struggling to complete and commission mini-grids
  • Existing mini-grid developers are also struggling to raise capital for expansion to connect additional customers

Power Africa support

  • Power Africa awarded $1.2M in grants to developers
  • Funding is for the procurement of specific mini-grid equipment and for community outreach activities and marketing to attract additional customers
  • Power Africa will provide technical assistance to help the grantees to optimize their projects

Anticipated Impact

  • Grants enable the implementation of new mini-grid projects
  • More than 5,200 households and businesses connected to electricity
  • Existing mini-grids can expand to new customers

How the Grantees will Connect More Households to Electricity

Map of Madagascar
Map of Madagascar showing the three regions where the respective mini-grid project sites are located. Source: Google Maps
  • Autarsys will electrify three settlements located in the Atsimo Andrefana region with new hybrid solar PV-powered mini-grids with integrated battery storage technology. “These facilities, in particular the storage systems, are in line with ‘state of the art’ international technology,” says Matthias Ross, Autarsys Chief Executive Officer.
  • Henri Fraise Fils & Cie will build a new solar mini-grid with battery storage, a backup generator, and a 4-kilometer low-voltage line at Manaratsandry village in Boeny region. “This grant will allow us to not only reduce the initial investment cost but also to drastically reduce the cost of energy for the beneficiary village, Manaratsandry,” explains Charles van der Straeten, Henry Fraise Fils & Cie General Manager.
  • HIER will extend the distribution network of an existing hydro-powered mini-grid in the town of Tsarazaza, which is a part of Amoron’i Mania region. “This grant will allow us to extend the areas served by our existing hydroelectric production plant while allowing, in a short time, the connection of more than 1,500 households,” says H.I.E.R. General Manager, Raolijaona Dieudonné.
The productive use of energy can facilitate income generating activities.
The productive use of energy can facilitate income generating activities. Photo Credit: Henri Fraise Fils & Cie

Solar PV mini-grids can power carpentry tools such as saws and drills, larger-scale agricultural processing such as milling and grinding, as well as irrigation pumps and cold storage. This productive use of electricity provides a foundation for sustainable economic development by increasing incomes and improving the welfare of communities. The grant winners will incorporate community outreach programs into their projects to promote the use of clean, affordable and sustainable energy, and to ensure that communities have the knowledge to get the most out of the productive use potential that the mini-grids introduce.

Private sector mini-grids have an important role to play in socio-economic development in rural Africa.
Private sector mini-grids have an important role to play in socio-economic development in rural Africa. Photo Credit: Henri Fraise Fils & Cie

The award of these mini-grid development grants advances Power Africa’s goal to connect 60 million new homes and businesses to electricity by 2030.

“Mini-grid developers and operators play a critical role in expanding access to electricity in Madagascar, especially to rural and hard to reach areas. Through these grants we hope they can continue to significantly improve the lives of the Malagasy people,” said Mark Carrato, Power Africa Coordinator, during a virtual event announcing the grant awardees on November 23, 2020.

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Power Africa

A U.S. Government-led partnership that seeks to add 30,000 MW and 60 million electricity connections in sub-Saharan Africa by 2030 > https://bit.ly/2yPx3lJ