Sustainable Energy Fund for Africa Triggers Power Sector Reform in São Tomé & Príncipe Through Mini-Hydro Projects Support

27 June 2018
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African Development Bank (Abidjan)

The Sustainable Energy Fund for Africa (SEFA), managed by the African Development Bank, has approved on 30 May 2018 a US$ 1 million grant to support the Republic of São Tomé & Príncipe in unlocking private investments in development of mini hydro power projects. The projects will have a medium-term effect of reducing the country's dependence on imported heavy oil and diesel fuel as well as increase the use of clean and reliable energy resources on the islands.

The SEFA grant activities will facilitate the preparation of feasibility, and environmental and social impact studies for five sites but not limited to the corresponding projects' front-end engineering designs and grid interconnection studies. The technical assistance will also develop a roll-out plan to enhance project commercialization, including structuring project financing and preparation of competitive tender documentation.

São Tomé & Príncipe has an electricity access rate of about 70%, with its power generation mix being predominantly thermal., But out of the 35MW-installed capacity, only 58% is available to the grid due to ageing generation assets and lack of maintenance.

"This project plays a crucial catalytic role in the country's ongoing efforts to unlock private investment in small-scale renewables, particularly in the mini-hydro space" said Amadou Hott, African Development Bank's Vice President for Power, Energy, Climate Change and Green Growth.

This intervention supports Government of São Tomé & Príncipe's 2017-2021 National Development Plan, which aims at achieving at least 50% renewable in the energy mix by 2030. The project aligns with the Africa Development Bank's Country Strategy Paper for São Tomé & Príncipe (2018-2022), which has a dedicated pillar on investments into mini hydro projects. It is also mainly driven by the Bank's New Deal on Energy for Africa, particularly with a focus on "Renewable Energy" and "Early Stage Project Finance".

About the Sustainable Energy Fund for Africa (SEFA): SEFA is a multi-donor facility established to unlock private sector investments in small to medium sized clean energy projects in Africa, operating through three components: (i) grants to facilitate the preparation of renewable energy generation and energy efficiency projects towards bankability (ii) equity investments to bridge the financing gap for renewable energy generation projects and; (iii) support to public sector in improving the enabling environment for private investments in sustainable energy. SEFA is endowed with contributions from the Governments of Denmark, United States and the United Kingdom, and is hosted and managed by the Power, Energy, Climate and Green Growth Department of the African Development Bank.

Read the original article on African Development Bank (AfDB).

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