The Africa Enterprise Challenge Fund (AECF) is kicking off the second phase of a funding and technical assistance program for renewable energy suppliers in Somalia. The Swedish International Development Agency funds the program (SIDA).

The REACT SSA (Renewable Energy and Climate Technologies in Sub-Saharan Africa) Somalia program has entered its second phase. The Africa Enterprise Challenge Fund (AECF) project intends to promote the growth of Somali-based businesses that specialize in renewable energy solutions installation. Microfinance institutions which are commercially involved in the renewable energy sector also profit from the initiative.

The REACT SSA initiative, which has a budget of about $61 million and is supported by SIDA, intends to stimulate the private sector to boost the provision of cleaner fuels, increase awareness about the dangers of the indoor air pollution, and promote clean energy solutions. The initiative provides funding for solar residential systems, stand-alone solar technologies for productive purposes, green mini-grids, and clean cooking fuels like ethanol.

What kind of help is there for renewable energy producers?

Phase 2 of REACT SSA in Somalia will award subsidies ranging from $100,000 to $1.5 million to qualifying businesses. According to the AECF, these grants will be awarded “after the accomplishment of collectively decided upon milestones.” The awards would be given to financially viable firms, 25 percent of which will be managed or owned by women, according to the fund.

“The goal of this project is to encourage private industry investment and innovation in the low-cost renewable energy solutions.” “Grantees and technical assistance recipients must deliver inexpensive, high-quality clean energy goods and services that help low-income people in rural and peri-urban regions, particularly women,” says Victoria Sabula, who is the AECF executive director.

The fund is aggressively urging enterprises established in Hirshabelle, South West, and Banadir regions, or tactically preparing to invest there, a piece of the tender for the second phase of REACT SSA initiative. Somalia, for the record, lacks a national electricity grid. When the civil war broke out in 1991, it fell along with the government. Electricity is primarily provided by private enterprises, following the country’s tentative return to peace. As a result, the AECF’s effort is a windfall to these energy providers.

AECF is a development organization that helps businesses innovate, generate jobs, harness investments, and market opportunities in order to build resilience and long-term incomes in Africa’s rural and marginalized populations. Since its inception in 2008, the AECF has raised more than US $356 million, leveraging over $658 million in matching funds, and bettering the lives of over 16 million people through job creation and increasing household incomes. In our focus industries of agribusiness and renewable energy, AECF has assisted 267 enterprises in 26 countries across 40 value chains in Sub-Saharan Africa.

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