GGGI and GIZ Partner to Increase Energy Efficiency and Access to Finance (including climate finance) for Rice Mills in the Senegal River Valley

In the Economic Community of West African States (ECOWAS), the agri-food sector represents one of the main pillars of the economy as it plays an important role in food security, employs around 55% of the population and contributes to about 30% of GDP per year. However, the sector faces many difficulties including the excessive use of fossil fuels (which accentuates the adverse effects on climate change), high costs of energy consumption, limited access to energy and/or water, etc. Senegal is one of the most important rice consumers in Africa with in an average 80 kilograms per capita per year.

On December 16, 2020, GGGI has signed a grant agreement with the GIZ project Water and Energy for Food (WE4F) to secure EUR 250,000 to reduce GHG emissions and increase the competitiveness and capacities within the Senegal rice sector. Specifically, the Project “Increasing Energy Efficiency and access to finance for five rice mills in the Senegal River Valley” aims to mitigate 500 tCO2e by 2022 by supporting 5 rice mills to undertake energy investments. This will be achieved by delivering energy audits and case studies for 5 rice mills, designing energy management / monitoring plans for the mill managers, and conducting training and capacity building for rice mills and relevant stakeholders, and disseminating the results of actions internationally. The project will be implemented from January 2021 to March 2022.

The project builds on GGGI’s previous work in Senegal with the Ministry of Agriculture and Rural Equipment (MAER) to design bankable projects in the waste-to-energy sector. GGGI partnered with MAER to conduct initial technical and financial evaluations of green waste-to-energy investments for 5 rice mills in the Senegal River Valley, an area that accounts for nearly half of Senegal’s total rice production. The rice mills produce enough rice husk during paddy processing for their gasification units to be operational throughout the year. GGGI presented the business model and opportunities to potential donors, investors, and technology providers during an investors’ forum co-organized with MAER. However, due to the lack of financing to conduct the necessary additional feasibility studies, investments have not progressed.

The Energy auditing and capacity building on energy management for five rice mills in the Senegal River Valley project is being delivered under the Water and Energy for Food program, a joint international initiative of the German Federal Ministry for Economic Cooperation and Development (BMZ), the Ministry of Foreign Affairs of the Kingdom of the Netherlands (MFA), the Swedish International Development Cooperation Agency (Sida) and the US Agency for International Development (USAID). The Initiative promotes the development and dissemination of innovative and economic approaches for using climate-friendly, energy-efficient and water-efficient technologies and innovations. These innovations will be applied increasingly in the agricultural and food sector in developing countries and emerging economies.

GIZ’s contribution to the Water and Energy for Food Initiative is implemented via two Regional Innovation Hubs in East and West Africa. The hubs are identifying and supporting clean energy as well as water- and energy efficient solutions that can be brought to commercial scale, and integrated within regional/ national agriculture production and food security programs. The program is launching a Regional Call for Innovation and can partner with innovators within the scope of Public Private Partnerships, subsidizing up to 50% of the upfront investment costs, which would strongly help project owners finance the related projects.