BIO wants renewable energy for all

The Sustainable Development Goal 7 (SDG7) states that, by 2030, everyone should have access to ‘affordable, reliable, sustainable and modern energy’. A significant portion of this must be renewable energy. It is abundantly clear that, in order to combat climate change, renewable, fossil-free energy is the way to go.

BIO – or the Belgian Investment Company for Developing Countries – is investing since many years in renewable energy. As an instrument of the Belgian Development Cooperation, BIO aims to strengthen the private sector in low and middle-income countries through investments.

In the past, it has supported several large projects in renewable energy. These include 2 solar parks in Senegal of 25 and 20 MW, a geothermal power plant (36 MW) and a ‘wind farm’ (23 MW) in Nicaragua, a solar park (100 MW) in India, a solar power plant in El Salvador that should produce 200 GW per year, a hydroelectric power plant in Nepal and so on.

The impact is significant. In 2019 alone, direct and indirect investments in renewable energy saved 1.488 million tons of CO2 equivalents. That amounts to almost all of Rwanda's annual emissions.

BIO has recently decided to adjust its strategy in the field of renewable energy. Initially, the company invested mainly in large power plants that inject their electricity directly into the grid. In response to a general trend, BIO now intends to focus more on autonomous energy units that are independent of the grid.

After all, such autonomous units are quite stable. Not only do electricity grids in low- and middle-income countries regularly suffer from breakdowns, injecting renewable energy into the grid is not always straightforward because its supply is not constant. Hydroelectric power plants, while fairly stable, often have a negative impact on the environment.

Especially in remote areas, it is much easier and more economical to set up autonomous units, known as solar home systems. A few solar panels and a battery go a long way for a household in running the fridge, TV, laptop and lights. It immediately saves on the highly polluting kerosene that was needed to keep the lights on.

It is also incredibly useful for companies to have an autonomous system. Since the grid is not very reliable, they always need an emergency generator running on diesel. Not only does this cause pollution, it also emits a lot of CO2. Moreover, diesel prices are on the rise.

BIO is already well underway with its adjusted renewable energy policy. For example, it has had 4 years of experience with 2 funds investing in such off-grid units. It recently supported ‘candi solar’. This energy company installs solar-powered autonomous units at businesses in India and South Africa. Not only does this eliminate the need for a polluting and expensive emergency generator, it also provides renewable electricity at a more affordable price.

The market in autonomous units is growing exponentially. That means there are more than enough candidates for BIO. The fermentation of waste from an agricultural or forestry business into biogas is also among the possibilities. In 2022, BIO plans to spend 55 million euros of its total investment budget of 200 million euros on renewable energy, i.e. more than a quarter.

BIO's projects are subject to strict criteria. For example, the loans amount to at least 5 million euros, so the candidate companies must be sufficiently large. And of course, it is also essential that the environment is not harmed. A project that requires cutting down forests or consumes a lot of water will not receive support. There are also social requirements, for example on worker safety. The close involvement of local residents is essential too.

Through its numerous projects around affordable, reliable and renewable energy, BIO is making a significant contribution to the achievement of SDG7. It is doing so without losing sight of the well-being of people and nature.