Problem

The rapid urbanisation of African countries is one of the major development challenges of the coming decades. In Africa as a whole, the urban population will rise from a current population of 650 million to a population exceeding 1.3 billion by 2050. Against this background, African Sub-Saharan cities have multidimensional development needs to cater for and an ever-growing urban population with a resilient and low-carbon development pathway.

In Sub-Saharan Africa, accessing adequate finance for low-carbon and climate-resilient infrastructure projects represents a major obstacle to delivering on climate ambitions. Cities usually lack the financial and technical capacities to plan and implement the most adequate resilient urban development, transportation and energy projects. 

For example, the switch to solar systems on city-owned sites could be an opportunity for local administrations to reduce costs, increase resilience and become compliant with self-defined climate action measures, reducing the reliance on fossil fuels. However, administrations cannot usually provide the capital needed for front-load investments due to budgetary constraints. They are also lacking the technical capacities to do the right technical choices or guarantee the needed maintenance work.

Project

To address these obstacles, in March 2023, the German Society for International Cooperation (GIZ) launched a project to support the Global Covenant of Mayors Sub-Saharan Africa (CoM-SSA) to implement the Global Energy Transformation Programme. Funded by the European Commission, CoMSSA focuses on Cameroon, Burkina Faso, Kenya, Nigeria, and Ghana. It aims to develop Sustainable Energy and Climate Action Plans, support urban sustainable energy investments, and promote regional cooperation. This project aims to assist municipalities in preparing and building decentralised urban solar projects on public buildings (city hall, schools) and spaces (e.g. markets)by providing technical support and facilitating cooperation between city administrations and private sector actors.

BASE as part of the consortium led by IDE-E, is conducting the financial assessments, supporting the tendering processes for selected sites, and providing strategic advice and technical support to the Municipal Governments and key stakeholders (e.g. utilities, financiers) to define, design and set up Energy Service Companies (ESCO). BASE  advises the local governments on establishing Purchasing Power Agreements (PPA) that reflect their economic interests, while being attractive to private investors.

Parts of the activities include: 

• Assessment of the financial viability and prioritisation (ranking) of urban solar projects on preselected city-owned sites 
• Support for technical requirements in conducting tendering processes (incl. criteria for application, eligibility, selection, technical specifications of solar projects, evaluation grid, etc.)
• Technical advice and support in implementing and managing city-owned legal structures (e.g., Energy Service Companies), including the definition of roles, responsibilities, tasks, and procedures, to secure public cash flow; development of the most suitable structures based on a standard proposal, to be adapted to the specific regulatory and institutional environment of each country; and review the companies’ functioning after several months, providing advice on how to optimise operations.
• Assistance in finalising PPAs with Energy Companies, verifying the economic terms of the contract agreements, providing strategic advice to the municipal governments, and facilitating negotiations with key stakeholders, including financiers.
• Project Structuring Support. Revision of project finance structure to fit focus country context (where the “standard” ESCO Proposal is not suitable) to propose concepts for alternative finance structures and support their establishment.

It is expected that the implementation will positively affect the number of communities and beneficiaries, job creation, energy savings, clean energy generation, CO2e emission reduction and finance mobilisation.