AFRICAN DEVELOPMENT BANK

Project Summary Note

MULTINATIONAL
POWERGEN SOLAR MINI-GRIDS EXPANSION
DECEMBER 2024
 Project summary – PowerGen Solar Mini-Grids Expansion
Task Manager B. Curnier / G. Pammesberger Beneficiary PowerGen (PG)
Project description PowerGen (PG) is a leading private-sector decentralised solar energy developer and operator
in SSA, with 7.1 MW of renewable energy (RE) installed (rural mini-grids,
interconnected/urban grids, and commercial and industrial (C&I) projects) across 12 countries,
and c. 31,500 mini-grid connections across four countries (Kenya, Sierra Leone and Nigeria)
under management. This project focuses on raising equity and concessional capital to scale up
the deployment of new energy connections, adding approximately 33 MW in new solar capacity
and creating approximately 67,500 new connections, mainly in Nigeria and DRC.
The SEFA alignment SEFA will provide an "equity-like" reimbursable grant (RG) of $10 million. The Bank will
and role disburse the grant and monitor project performance.
Cost structure PG is seeking to raise Preferred Stock through its Series C raise, underpinned by a tranche of
concessional capital, which is necessary to crowd in the senior capital by providing downside
risk protection, as well as bolster IRR returns, and further allow PG to maintain lower tariffs.
Preferred Stock approval has already been obtained (from InfraCo Africa, IFU and ElectriFI),
with signing of investment documents now complete. Approval has also been obtained for
concessional capital in the form of concessional equity from the Private Infrastructure
Development Group`s Technical Assistance Facility (PIDG TA). SEFA has been requested to
contribute a matching concessional capital tranche which will be provided through a
reimbursable grant (RG) instrument. All of the capital is expected to be deployed over 2025-
27, mainly on projects in Nigeria, and DRC.
Description and website Established in 2011 as an RE company in Kenya, PG has gained extensive experience and a
of recipient track record to become a leading off-grid RE developer in East Africa. Having started as an
EPC provider in 2015, PG launched its mini-grids business and has since strongly influenced
the sector's development. Historically, PG built mini-grids under EPC contracts for many
clients. Still, in 2021, PG shifted to a build-own-operate (BOO) business model to achieve
longer-term financial sustainability. Today, PG manages a portfolio of 182 sites in 3 countries
– Sierra Leone, Nigeria, and Kenya - with c. 4MW of solar capacity installed. PG has built c.
4,200 mini-grid connections across 53 sites (c. 2.2MW) and 25 C&I projects (c. 0.83MW) for
third parties. PG aims to become a leading decentralised RE-based utility in Africa, building
on its strong track record and experience.
https://www.powergen-renewable-energy.com/
Bank’s role The Bank, as administrator of SEFA, will disburse the SEFA reimbursable grant and monitor
the project's performance. The Bank may offer additional funding to PG, including senior debt
at the Asset HoldCo level at a later stage.
Implementation The SEFA RG will be governed by an RG agreement between the Bank and PowerGen.
arrangements Disbursements will be made into PG's Restricted Project Account upon submission of annual
disbursement requests by SEFA's OPD. Grant proceeds are solely used to fund the costs of
power grid projects (C&I projects are not eligible for funding from the RG). Grant drawdowns
will be based on quarterly forecasts of funding requirements (Capital Requests) verified and
approved by a dedicated Investment Committee to be set up by the Board of WindGen. Grant
drawdowns will be 1:1 with other concessional capital, including from PIDG TA, and
cumulative concessional capital drawdowns will be on a minimum 1:1 ratio with Preferred
Stock.
Strategic alignment The project aligns with SEFA's strategic priorities, the Bank's Ten-Year Strategy (2024-2033),
the M300, the New Deal on Energy for Africa, and three of the Bank's "High 5" priorities. It
also aligns with the Bank's Gender Strategy and Climate Change Action Plan.
Development outcomes The project aims to create approximately 67,500 first-time electricity connections, benefitting
over 313,000 people, installing 33 MW of new solar capacity, and reducing emissions by nearly
473,000 tCO2e. It also aims to create c. 1,074 direct construction, and a further c.1,097 long-
term jobs (with specific targets for women and youth).
 ENVIRONMENTAL AND SOCIAL COMPLIANCE NOTE (ESCON)

A. Basic Information1
Project Title: PowerGen Solar Mini-Grid Expansion Project SAP or TFMS code: P-Z1-FF0-033
Country: Nigeria, DRC, Kenya, Sierra Leone Region: Multi-regional Lending Instrument: Project Finance Loan/Grant
Project Sector Unit: Energy and Electricity Task Team Leader(s): Benjamin CURNIER/ Gabriele PAMMESBERGER
Appraisal dates: 26-30/06/2023 Estimated Approval Date: December 16, 2024
Environmental Safeguards Officer: Abbas AGBAJE /Yusef HATIRA
Social Safeguards Officer: xxxxxxx
Environmental and Social Category: Category 2 Operation type: Non Sovereign Operation Financial Intermediary: No
Categorization date: July 24, 2023 Categorization in ISTS: July 24, 2023 Categorization in SAP: July 24, 2023
Is this project processed under rapid responses to crises and emergencies? No
Is this project processed under a waiver to Integrated Safeguards System (ISS) requirement(s)? No
B. Disclosure and Compliance Monitoring
B.1 Mandatory disclosure
Environmental Assessment/Audit/System/Others: [E&S Policy and Procedures (1), ESMS Assessment Report (1)]]
Was/Were the document (s) disclosed prior to appraisal? No
Date of "in-country" disclosure by the borrower/client July 21, 2023
Date of receipt, by the Bank, of the authorization to disclose July 21, 2023
Date of disclosure by the Bank July 28, 2023
Resettlement Action Plan (RAP)2: [NA.]
Was/Were the document (s) disclosed prior to appraisal? NA.
Date of "in-country" disclosure by the borrower/client Click to Set the date
Date of receipt, by the Bank, of the authorization to disclose Click to Set the date
Date of disclosure by the Bank Click to Set the date
Stakeholder Engagement Plan (SEP): [NA.]
Was/Were the document (s) disclosed prior to appraisal? NA.
Date of "in-country" disclosure by the borrower/client Click to Set the date
Date of receipt, by the Bank, of the authorization to disclose Click to Set the date
Date of disclosure by the Bank Click to Set the date
Pest or Vector Management Plan (PMP/VMP): [NA.]
Was/Were the document (s) disclosed prior to appraisal? NA.
Date of "in-country" disclosure by the borrower/client Click to Set the date
Date of receipt, by the Bank, of the authorization to disclose Click to Set the date
Date of disclosure by the Bank Click to Set the date
Vulnerable Peoples Plan (VPP): [NA.]
Was the document disclosed prior to appraisal? NA.
Date of "in-country" disclosure by the borrower/client Click to Set the date

1
Note: This ESCON shall be appended to project appraisal reports/documents before Senior Management and/or Board approvals.
2
Including Livelihood Restoration Plan
 Date of receipt, by the Bank, of the authorization to disclose Click to Set the date
Date of disclosure by the Bank Click to Set the date
Riparian Communities Participation Plan (RCPP): [NA.]
Was the document disclosed prior to appraisal? NA.
Date of "in-country" disclosure by the borrower/client Click to Set the date
Date of receipt, by the Bank, of the authorization to disclose Click to Set the date
Date of disclosure by the Bank Click to Set the date
Emergency Preparedness & Response Plan (EPRP): [NA.]
Was the document disclosed prior to appraisal? NA.
Date of "in-country" disclosure by the borrower/client Click to Set the date
Date of receipt, by the Bank, of the authorization to disclose Click to Set the date
Date of disclosure by the Bank Click to Set the date
Hazardous/Medical Waste Management Plan (HWMP): [NA.]
Was the document disclosed prior to appraisal? NA.
Date of "in-country" disclosure by the borrower/client Click to Set the date
Date of receipt, by the Bank, of the authorization to disclose Click to Set the date
Date of disclosure by the Bank Click to Set the date
Riparian notification:
Was the document disclosed prior to appraisal? NA.
Date of "in-country" disclosure by the borrower/client Click to Set the date
Date of receipt, by the Bank, of the authorization to disclose Click to Set the date
Date of disclosure by the Bank Click to Set the date
Environmental and Social Management Plan (ESMP) of the financing agreement 3 [FA ESMP (1)]
Was the document disclosed prior to appraisal? No
Date of "in-country" disclosure by the borrower/client December 2, 2024
Date of receipt, by the Bank, of the authorization to disclose December 2, 2024
Date of disclosure by the Bank December 2, 2024
If in-country disclosure of any of the above documents is not expected, as per the country’s legislation, please explain why: [NA]
B.2. Compliance monitoring indicators
Have satisfactory calendar, budget and clear institutional responsibilities been prepared for the implementation of measures related to safeguard policies? Yes
Have costs related to environmental and social measures, including for the running of the grievance redress mechanism, been included in the project cost? Yes
Is the total amount for the full implementation for the Resettlement of affected people, as integrated in the project costs, effectively mobilized, and secured?4 NA.
Does the Monitoring and Evaluation system of the project include the monitoring of safeguard impacts and measures related to safeguard policies? Yes
Have satisfactory implementation arrangements been agreed with the borrower and the same been adequately reflected in the project legal documents? Yes
C. Clearance
Is the project compliant with the Bank’s environmental and social safeguards requirements, and can be submitted to Approval? Yes

3
As referred to in section III.2.3 of the Bank’s Environmental and Social Policy (ESP)
4
In case a resettlement action plan (RAP) are not required although ESIA is/are disclosed, attached the image/picture/photo of the area/site/landscape to evidence that it is free of any encumbrance
(simple statement or letter from the borrower does not suffice), in addition to the statement by the borrower that it is a public-owned land.
 Prepared by Name Signature Date
Environmental Safeguards Officer: Abbas AGBAJE/Yusef HATIRA December 2, 2024
Social Safeguards Officer: xxxxxxx Click to set the date
Task Team Leader: Benjamin CURNIER/ Gabriele December 2, 2024
PAMMESBERGER
Submitted by
Sector Director: Daniel SCHROTH December 2, 2024

Cleared by
Director SNSC: For Maman-Sani ISSA 3rd December 2024
OIC