EDFI Electrifi and REPP invest US$9.8m into mini-grids in Lesotho

LESOTHO – The European Union-funded Electrification Financing Initiative and the UK-funded Renewable Energy Performance Platform (REPP) have each invested US$4.9m into a project-finance vehicle led by OnePower (1PWR) to build mini-grids in Lesotho.

The equity and debt investment into the project vehicle, Sotho Minigrid Portfolio SPV will fund the construction of 11 mini-grids in Lesotho with a total capacity of 1.8MW.

The mini-grids will provide first-time electricity access to 20,000 people and renewable energy to seven health clinics.

Lesotho has one of the lowest electrification rates in Africa with around 62% of its population lacking access to electricity and their rural electrification rate is estimated to be below 20%.

Once completed the mini-grids should create around 7,300 new connections a generate up to 3,480MW a year and this would avoid emissions of around 2,780 tons of CO2 annually.

Around 100 local jobs will be created by 1PWR during the construction of the project and six permanent positions will be created during operations.

1PWR will deploy a host of technological innovations in their solar-battery energy systems, including PV trackers designed and manufactured in sub-Saharan Africa.

The firm will deploy smart meters optimized for local and off-grid conditions pre-built powerhouses to ensure efficient construction and deployment of generation systems.

Supported by the European program GET.invest, 1PWR has optimized its financial modeling and mini-grids development progress to enable a tariff of US$0.33/kWh, equivalent of LSL5 per kWh in local currency, which is an almost cost-reflective tariff but still very competitive by local standards.

Both EDFI ElectriFI and REPP (managed by Camco Clean Energy) have previously invested in 1PWR project. EDFI Electrifi signed a development finance loan of US$113,262 with 1PWR in 2018 which allowed the organization to procure a feasibility study that laid the groundwork for the current mini-grids portfolio.

In 2019 REPP extended a US$450,000 loan to 1PWR to finance the first solar-battery mini-grids in Lesotho.

Geoff Sinclair, Camco Clean Energy Managing Director said that: “Two years ago a REPP loan helped 1PWR to forge ahead with its plans to build Lesotho’s very first solar mini-grids and deliver a transformational impact on the underserved community of Ha Makebe.  It has been tremendously satisfying to witness the successful completion of that mini-grids and there is a real buzz of excitement to now be supporting this next and much larger phase of the project.”

In addition to the EDFI ElectrFI and REPP investment, 1PWR has received grant support from the UN Capital Development Fund and UN Development Programme, Power Africa, EEP Africa, and UK AID via the Transforming Energy Access program, as well as a loan from the Open Road Alliance.

 Get.invest has provided advisory and facilitation services and Sidley Austin and Covington & Burling through the Thomson Reuters Foundation’s TrustLaw program have provided legal services.

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