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KfW, the German government’s development bank, has pledged to support the development of solar and wind power projects in Africa. According to African Export-Import Bank, KfW and Afreximbank have “agreed to work together in an environmentally sustainable manner by targeting an initial pipeline of $1 billion commencing in 2016.”

Afreximbank made the announcement after KfW’s investment and development subsidiary, DEG, made its decision to finance Mobisol, a Berlin-based solar company, in Mobisol’s expansion in East Africa.

Part of DEG’s strategic goals is to finance environmentally-friendly projects in sub-Saharan Africa. And
Mobisol, which supplies off-grid solar systems to homes in rural areas, combines environmentally friendly technology with an innovative payment system whereby customers pay for installations in small monthly payments via their mobile telephones.

DEG said: “Mobisol has already equipped over 21,000 households in Tanzania and Rwanda with off-grid solar power systems. The current financing enables the company to further expand. It is envisaged that 150,000 people in rural East Africa will use Mobisol systems in the future. Moreover, 10,000 micro entrepreneurs are expected to generate an income amounting to $10 million annually.”

Solar power is among a number of energy sources being explored to boost power supplies across Tanzania. The Sustainable Energy Fund for Africa (SEFA) had approved the development of a number of “solar-hybrid mini grids” in rural growth centres in Tanzania, the African Development Bank (AfDB) said in January.

According to the AfDB, Tanzania’s national electricity coverage is estimated at about 21%, with the transmission grid covering a minor part of the country and leaving out most of the territory, particularly in western and southern regions.