Project supports both countries' NDC targets to reduce GHG emissions by 2030 and promote renewable energy development in rural areas, and contributes to Sierra Leone’s national electrification target of 92% by 2030 (National Renewable Energy Action Plan, 2016) and Uganda’s 100% electrification by 2030 target (Draft Revised National Energy Policy, 2019). Improving energy access through renewable energy supports the implementation of Sierra Leone’s medium term development vision 2019-2023 and Uganda’s National Development Plan III (2020/21-2024/25).
Plans to build a portfolio of 49 solar PV mini-grids in rural Sierra Leone and Uganda are progressing well following USD2.1m loans from both REPP and co-funder, FMO.
Once built, the mini-grids will provide clean, reliable and cost-competitive electricity to 55,000 people across the two countries, which have among the lowest electrification rates in the world. Currently, around 23% of Sierra Leone’s population is connected to electricity, which is considered a significant impediment to the nation’s growth and development, with the majority of households in rural areas dependent on kerosene, candles, fuel wood and charcoal. The situation is similar in Uganda, which has a rate of electrification of around 41%, although this is far lower in rural areas.
Under the plans, developer Winch Energy Limited will construct and operate 24 mini-grids in Sierra Leone and a further 25 in Uganda, with a combined capacity of 2.2 MW.
Given both countries’ low electrification rates, mini-grids have a significant role in providing electricity access to clean energy, thus supporting the achievement of SDG7 and national electrification targets. Furthermore, the project will mitigate GHG emissions and generate other co-benefits such as:
– First-time access to energy creates new opportunities for social and economic development through extended working hours, and reduced wastage of time and physical exertion and provided improved information access.
– Renewable energy increases productive use of energy opportunities and works as a driver for long-term economic growth in the project community, increasing the resilience of the community to climate change.
– Replacing kerosene, candles and charcoal will improve indoor air quality.
– Employment opportunities are created during development and operation across numerous skills.
Winch Energy has previously invested significantly in development activities, including pilot projects to prove the viability of its projects and technology. REPP’s loan will enable the company to scale up its operations, which in turn will improve the likelihood of securing more funding and building further mini-grids.
The mini-grids to be used in the project have been developed by Winch Energy and are a containerised solution with canopy-mounted solar PV panels with battery storage, delivering reliable AC supply to rural areas.
As of Q3 2021, Winch was building the Remote Power Units (RPU)) at its assembly facility in Sicily, Italy, with the first 13 units already shipped to Uganda. All 25 units are expected to arrive in Uganda before the end of 2021. Work has also begun preparing the sites and registering homes and businesses in readiness for the arrival of the RPUs which, once received, will be installed within a matter of days. In Sierra Leone, 12 sites are already operational with the second batch of 12 sites expected to start shipping by the end of 2021. It is anticipated that all 49 sites will be commissioned in Uganda and Sierra Leone by March and May 2022, respectively.
Contracted date: 17 September 2021
Lending type: Senior term loan
REPP funding: USD 2.1 million
We are obviously delighted with the closing of this debt financing from FMO and REPP, which represents a landmark for the off-grid industry in Africa and worldwide. This first tranche represents the beginning of our investment program with our partner NOA and soon to follow will be additional investments in Sierra Leone and Uganda and we are also targeting Nigeria and Ethiopia for 2022.- Nicholas Wrigley, CEO, Winch Energy