Nairobi, October 24, 2012
--IFC, a member of the World Bank Group, is providing advisory services to the Department of Energy of the Republic of South Africa, to help the government develop a new national Electrification Roadmap that includes increased supply of off-grid renewable energy. South Africa aims to achieve universal electrification by 2025, which will require broadening the technology options that are employed, and enhancing the planning and delivery processes applied by electrification partners.
A greater share of off-grid renewable energy in South Africa's electricity mix will contribute positively to the country's national sustainability agenda through its social and environmental benefits. More people will have access to electricity, increasing productive hours for businesses and school-going children.
IFC’s Africa Renewable Energy Advisory Services (AREAS) program, working with the government and other key stakeholders, will open up more opportunities for private sector involvement in non-grid renewable energy, to meet the country’s universal electrification target. By March 2012, the government of South Africa had electrified 76 percent of formal households, including some 50,000 using rooftop solar home systems (SHS); this represents a significant achievement given that electrification stood at below 40 percent in 1994. However, some 3.4 million households remain without power.
Given the high cost of connecting sparsely populated remote communities to the grid, there is broad consensus that high-quality off-grid solutions will need to be part of the strategy going forward, and may account for up to 10 percent of new connections. Moreover, there is need to reduce the burden on government finances, where possible, by leveraging the private sector in the delivery of systems.
"The government of South Africa, with IFC’s help, will seek to remove barriers in the enabling environment that currently constrain private sector participation in the off-grid space in particular,” said Wosley Barnard, Deputy Director General of the South African Department of Energy. “Importantly, this work also focuses on supporting the scale-up of viable business models to serve rural communities. It is expected that IFC's business model intervention will assist private sector players to access financing needed to set up operations or expand their activities, as well as increase solar home systems used by households."
"Universal electrification will allow poor households and communities to improve their living standards and enable private sector businesses in the renewable energy sector to grow,” said Sara Clancy, IFC Head of Sustainability for Sub-Saharan Africa. “IFC brings extensive expertise in supporting off-grid energy access, and has a strong understanding of the range of solutions that South Africa can apply.”
Increasing access to services, mitigating climate change and increasing access to finance by private sector firms are among IFC’s development goals. Increasing access to power is central to IFC’s strategy for infrastructure development in Sub-Saharan Africa.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit
www.ifc.org
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