By expanding the adoption of off-grid energy solutions in Zambia, ENGIE Energy Access will provide reliable electricity to underserved families and small businesses, creating economic growth and increasing socio-economic welfare in local communities.
MySol Grid Zambia, a unit of ENGIE Energy Access, is responsible for constructing, owning, operating, and maintaining these mini-grids. This ensures that residential, commercial, and productive-use customers have access to dependable and renewable power along with value-adding services.
"We are excited to announce this significant milestone, which brings ENGIE Energy Access closer to achieving its goal of operating 60 mini-grids across five provinces in Zambia. This project supports several United Nations Sustainable Development Goals, particularly SDG 7, by delivering affordable, reliable, and sustainable clean energy to 40,000 people living in rural areas. Our work is an important element of the national electrification plans, and we are committed to collaborating with the authorities to expand energy access and promote sustainable development in Zambia," said Gillian-Alexandre Huart, CEO of ENGIE Energy Access.
The first sites in this groundbreaking project include: Lusinde, Kandongwa, Nyimba Mwana, Chidiwa, Chataika, Kanyanga, Petulo, Kasamba, Chidiwa, Mphole, Mung''omba, Kalambana, Mtore, Kondwelani, Lunga, and Luamphande and are scheduled to be operational by the end of 2024.
In 2023, MySol Grid Zambia signed a USD 7.5 million debt facility with Facility for Energy Inclusion (FEI), managed by Cygnum Capital. This funding will provide the company with the necessary resources and flexibility to construct a total of 60 mini-grids under the IAEREP programme. This is a significant step for the mini-grid sector, with these assets having attracted non-recourse long-term financing.
ENGIE Energy Access established its presence in Zambia in 2017. It currently has over 250 employees, 650 independent sales agents, and more than 60 points of presence across the country. The company has sold over 300,000 SHS kits and has 1 mini-grid operational in Chitandika.
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MySol Grid Zambia, a subsidiary of Engie Energy Access (EEA), has secured $7.5 million of debt from the Facility for Energy Inclusion (FEI) to build 60 minigrids. The projects will provide electricity to more than 40,000 people in rural areas.
An Engie PV minigrid in Chitandika, Zambia
Image: Engie Energy Access
Investment in the offgrid solar sector continues to grow, with the latest transaction involving $7.5 million of senior debt for the construction of 60 minigrids in Zambia. The projects, with around 5 MW of cumulative capacity, are intended to bring electricity to more than 40,000 people living in rural areas.
MySol Grid Zambia, a subsidiary of EEA, secured the funds from FEI, which was established by the African Development Bank and managed by UK-based investment bank Cygnum Capital.
MySol Grid Zambia is a leading player in the African offgrid market. In 2022, EEA had more than 1.5 million solar home systems sold and 16 minigrids in operation, as a result of bringing US solar home system business Fenix International, Berlin-based Mobisol, and Engie PowerCorner minigrids under one roof. Its projects have affected 7 million people in nine countries across Africa.
Last year, EEA signed the largest minigrid transaction in Africa with CrossBoundary Energy Access, at $60 million, to provide electricity access to more than 150,000 people in Nigeria. However, according to the International Energy Agency (IEA), the solar minigrid sector needs $187 billion of investment to achieve universal energy access by 2030.
Following the latest transaction, MySol Grid Zambia will construct, own and operate the minigrids under the Increased Access to Electricity and Renewable Energy Production (IAEREP) program. As part of IAEREP, the European Union previously allocated €6 million ($6.5 million) grants to Engie''s offgrid unit in the context of the EU Global Gateway initiative.
"Attracting non-recourse long-term debt financing for mini-grid projects is proof of the viability of the business model and the legitimacy of renewable mini-grid projects in the rural electrification landscape," said Engie Energy Access CEO Gillian-Alexandre Huart.
Indeed, the offgrid solar sector has made significant progress in attracting finance, with companies offering pay-as-you-go and cash sale options for solar home systems, solar lanterns, solar appliances, and solar water pumps. In 2022, the sector secured $746 million, up 63% from the previous year, according to the Global Off-Grid Lighting Association (GOGLA).
However, this remains far from the $23.3 billion needed to achieve the SDG7 goal of clean, modern electricity for all. Today, more than 730 million people still live without access.
In Zambia, specifically, the need for rural electrification is dire. According to World Bank data, in 2021 Zambia''s national electrification rate stood at 46.7 %, with only 14.5% of the rural population having access to electricity.
The country''s population is highly dispersed across rural areas, which makes expansion of the national grid economically and technically challenging. Therefore, decentralized energy solutions, including offgrid solar, are critical to the Zambian government''s efforts to achieve its official target of universal access to energy by 2030. The government''s stated goal by 2023 was to deploy 500 MW of solar PV.
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