Sierra Leone uses €20m EU funding to boost solar power
Sierra Leone is harnessing EU-backed results-based financing to expand rural electrification with solar mini-grids, in an effort to reduce fossil fuel dependency and drive economic growth.

The government of Sierra Leone is trying to maximise its renewable energy resources to meet the growing demand for electricity in rural communities.
The European Union has provided the government with €20 million to kick-start a results-based financing (RBF) mechanism. The roll-out of the next wave of solar mini-grids is expected to electrify 35,000 households in the West African nation.
RBF ensures that development funding is linked to pre-agreed and verified results, and that funding is provided when the results are achieved, according to the World Bank.
Sierra Leone doesn’t produce fossil fuels and therefore the country relies on foreign sources for its fossil fuel needs. With this new clean energy financing, the government is also exploring ways to reduce fossil fuel imports by embracing renewable energy to meet its growing energy demand.
According to a statement released by Sustainable Energy for All, the RBF model provides financial incentives (grants) to private mini-grid developers/operators based on the number of connections they set up.
Jorge Moreira da Silva, Executive Director and Under-Secretary-General at the United Nations Office for Project Services, said that UNOPS is committed to the collaborative effort required to provide access to sustainable energy for all. He said the EU is proud to offer practical solutions to the government in the drive for clean energy access by helping set up solar mini-grids nationwide.
Damilola Ogunbiyi, Special Representative of the United Nations Chief Executive Officer, said in a statement that this partnership demonstrates the power of collaboration, clear leadership from Sierra Leone’s government, and innovation to scale clean energy solutions.
She said the project is targeted at underserved communities and, importantly to drive economic development by boosting the viability of local companies and the sector, ensuring everyone benefits from electrification.
“The use of Results Based Financing for the roll-out of solar mini-grids is an important step for Sierra Leone. As the RBF mechanism is scalable, it has the potential to lead to a palpable acceleration in rural electrification. We would be very happy to see other donor partners of Sierra Leone join the European Union in supporting the Government’s initiative,” said Jacek Jankowski, the EU’s Ambassador to Sierra Leone.
There are 703 sites with mini-grid potential and 104 mini-grids already under operation in the country, as indicated by the Ministry of Energy’s National Online Database for Electrification.
“These additional mini-grids will serve approximately 180,000 households. The envisaged EU RBF grant amount will therefore provide incentives for 20% of the projected additional customer connections,” said the statement.
Challenges in expanding clean energy
Mohamed Alhaji Munu, Chief Executive Officer of Sierra Power Renewable Energy, told Gas Outlook that some of the challenges faced in the past by mini-grids centred around expansion, fixed tariffs, and difficulties in accessing funding and grants. He emphasised that one of the ways to address these challenges is by having funds such as results-based financing in the mini-grid industry, which will give the industry a chance to expand.
“Mini grids do generate funds from tariffs but due to their high overhead cost it will be difficult to use tariffs to expand its operations. Some mini grids will go out of business if this same tariff continues overtime,” he added.
Ayodeji Stephen, Founder of HydroGEM Energy Advisory, reiterated that securing funding for mini-grid projects in Sierra Leone can be particularly difficult due to the country’s economic constraints and limited access to capital. He told Gas Outlook that this is further compounded by the high perceived risk of investing in rural energy projects.
“Sierra Leone’s mini-grid sector has relied entirely on grant funding. Given the current financial landscape, industry experts question the long-term viability of privately financed, commercially operated mini-grids.”
Shift from traditional funding
Stephen said the RBF mechanism is a shift from traditional funding methods, which often allocate resources based on project plans rather than actual results. He noted the funding mechanism differs from conventional mechanisms, like grants and loans, by linking payments directly to achieving specific, pre-defined outcomes.
“With RBF, the government can prioritise proper accountability by establishing a prior agreement with mini-grid developers that outlines specific targets. Funds will only be disbursed after verifying that these pre-agreed results have been achieved. The RBF model encourages developers to find the most efficient and cost-effective ways to deliver electricity to rural communities by disbursing funds to developers based on the number of connections.”
Munu said the major difference between this EU project and the previous Rural Renewable Energy Project (RREP) is that it doesn’t have such funding, and the operators face many problems. He believes that with funds such as RBF, the operators will find ways and means to expand and maintain their operational sites compared to RREP, where such funds are lacking.
“The operators want to expand but their hands are tied, as the grids are not making enough money for such expansion. Considering the fall of the SLL to the USD and the tariff operator charge remains the same since inception. This makes it difficult for the operators to expand.”
Munu said that due to poverty, investing in renewables is quite expensive initially, making it very difficult for the country to go into full-scale renewables. However, he said that with the fluctuation of market prices, fossil fuel companies and individuals have started investing in renewables like solar home systems and stand-alone systems.
“Sierra Leoneans have suffered too many price increments in recent times and that the country itself is ready to go into renewables depending if they get the funding.”
Stephen also emphasised that private sector investment can stimulate investments in renewable energy initiatives, such as solar energy projects and mini-grid systems, by creating a more predictable and results-driven investment environment. He noted that to maximise the effectiveness of RBF, Sierra Leone must undertake key policy reforms that create a conducive environment for renewable energy investments.
“As RBF mechanisms demonstrate clean energy’s economic and social benefits, they help drive a cultural shift among public and private stakeholders. Over time, this approach embeds renewable energy priorities into national development strategies,” he ended.