Axian Energy's €84mn financing for Kolda solar farm in Senegal

Axian Energy, a prominent Independent Power Producer (IPP) based in Madagascar, has successfully secured €84 million in debt financing from the Emerging Africa & Asia Infrastructure Fund (EAAIF), the Dutch Development Bank (FMO), and Deutsche Investitions- und Entwicklungsgesellschaft (DEG). This investment will be utilized for the development of a 60 MW solar farm equipped with 72 MWh of battery storage in Senegal's Kolda region, reflecting a significant leap towards enhancing renewable energy availability in the country. In an exclusive interview with CNBC Africa, Ngone Tall, Business Development Manager at Axian Energy, shed light on the partnership's dynamics and the project's noteworthy contributions to Senegal's renewable energy targets. Key Points: 1. Addressing Energy Poverty in the Kolda Region: Senegal boasts commendable electrification rates, with 84% of the population having access to electricity as of 2023. However, the Kolda region lags behind, prompting Axian Energy's strategic decision to establish a solar farm in this underserved area. Through a Power Purchase Agreement (PPA) with the Senegalese government, the generated electricity will not only cater to the local populace but also contribute to the national grid, fostering economic growth and social development. Axian Energy's commitment to corporate social responsibility will further amplify the electrification drive in Kolda, diminishing reliance on kerosene lamps and wood for energy needs. 2. Structured Debt Financing for Sustainability: The financing model for the Kolda solar farm underscores a collaborative effort between Axian Energy and the funding partners. By leveraging the expertise of entities like EAAIF, FMO, and DEG, Axian Energy can access long-term and affordable capital, ensuring the project's financial viability. Beyond financial support, the partnerships extend technical assistance and uphold stringent environmental and social standards, reinforcing sustainability practices in the renewable energy domain. The structured debt financing not only promotes project sustainability but also paves the way for continued renewable energy investments in Senegal and across Africa. 3. Advantages of Battery Energy Storage Integration: The integration of battery energy storage systems augments the Kolda solar farm's operational efficiency and grid stability. By alleviating production intermittency and facilitating grid stabilization, the battery storage infrastructure plays a pivotal role in optimizing energy generation and distribution. Furthermore, the system enables load shifting, revenue generation for utility companies, and safeguards against network disruptions, underscoring its multifaceted benefits within Senegal's evolving energy landscape. Quote: Ngone Tall encapsulated Axian Energy's strategic vision, stating, "It's important for IPPs like Axian Energy to get this solar project off the ground by working with these GFIs, which can help us have a financially viable project." The successful financing injection into the Kolda solar farm marks a milestone in Senegal's renewable energy evolution, signifying a collaborative commitment towards sustainable energy transitions and community empowerment. As Axian Energy continues to champion renewable energy initiatives, the Kolda solar farm stands as a testament to innovative solutions driving Africa's energy transformation.