The renewable energy sector is gaining increasing momentum in Somalia despite the country’s political instability and limited financial resources. As part of efforts to support renewable energy, the African Enterprise Challenge Fund (AECF) launched the second phase of the grants and aid program for private companies interested in the clean energy sector and climate technologies in the East African country. The African Fund is financing the project alongside the Swedish International Development Cooperation Agency (SIDA), according to the official website of the AECF.

The second phase:

Following the success of the first phase of the program last year, the African Enterprise Challenge Fund launched the second phase of the React SSA competition in Somalia with the aim of providing high-quality, affordable clean energy.

A unique technology to store electricity and overcome price fluctuations:

The initiative encourages private sector investments in providing low-cost clean energy solutions that benefit the poor in rural and semi-urban areas, especially women and youth. With a budget of $61 million, the program will stimulate the private sector to increase supplies of clean fuel, raise awareness of the dangers of air pollution, while promoting clean energy. The program funds home solar systems, green electricity mini-grids, and clean fuels. Eligible businesses will receive grants worth between $100,000 and $1.5 million, of which 25% will be allocated to businesses owned or managed by women.

The fund’s CEO, Victoria Sabola, said the grants are available to private sector companies and microfinance institutions commercially active in Somalia’s renewable energy market. She added that the second phase program strongly encourages companies located in the Hershabia, South West and Benadir regions to apply for the initiative; Since she was the least represented during the first round of the competition.

Renewable energy challenges:

Somalia lacks a national electricity grid after its collapse along with the government at the beginning of the civil war in 1991. The country relies on imported diesel and coal to meet its energy needs; This makes the cost of electricity in Mogadishu more than 3 times the global price. According to the World Bank’s Sustainable Development Goals Tracking Report, it is estimated that 11 million Somalis lack access to electricity services.

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Despite the difficulties facing the renewable energy market; Somalia represents a promising environment for developing the sector, especially in the wind and solar energy sectors. During 2013, the African Development Bank highlighted research showing that Somalia has superior onshore wind potential over 21 other African countries. The wind speed in Somalia is the fastest in the world, and it can generate large amounts of electricity. According to the US Agency for International Development, Somalia can produce between 30 and 45 thousand megawatts of wind energy and 2,000 kilowatt-hours per square meter of solar energy.