REACT 2.0 Somalia - Energy for Sustainable Growth in Somalia (ESGS)

The REACT 2.0 Somalia programme seeks to achieve the following objectives:

• Increase access to affordable, reliable, and clean energy solutions for households, enterprises, and social institutions in underserved regions.
• Strengthen private sector capacity by supporting enterprises to develop scalable and commercially viable energy business models.
• Enhance economic opportunities by promoting productive use of energy (PUE) in agriculture, livestock, fisheries, and water sectors.
• Mobilize private capital by improving connections between enterprises and financial institutions.
• Strengthen institutional capacity within Somalia’s national energy sector by supporting policy development and improving the regulatory environment.
• Promote gender-inclusive business approaches that improve both commercial performance and development outcomes.

The programme targets private sector enterprises operating in Somalia’s renewable energy ecosystem and focuses on decentralized renewable energy technologies.

Priority technology areas

1. Access to Electricity

• Solar Home Systems (SHS)
• Solar Stand-Alone Systems (SAS)

2. Productive Use of Energy (PUE)

• Solar water pumping
• Solar refrigeration and cold storage
• Solar drying and milling systems
• Commercial and industrial solar systems for MSMEs

3. Mini-Grids

• Solar hybrid mini-grid systems
• Mini-grid expansion to underserved communities

4. Financial Services

• PAYGo-enabled products
• Lease-to-own financing models
• Energy loan products through MFIs and SACCOs
• Bundled energy-finance solutions

The REACT 2.0 ESGS applies AECF’s Challenge Fund competition model, pairing catalytic financing with technical and investment advisory support to help enterprises grow sustainably.

• Private sector-led market development: Supporting enterprises capable of scaling commercially sustainable renewable energy solutions.
• Risk sharing: AECF co-invests alongside private enterprises, reducing investment barriers while encouraging commercial commitment.
• Catalytic financing: Grant funding that enables businesses to test innovative models and expand into underserved markets.
• Technical assistance: Advisory support across business strategy, sales and distribution, credit management, operations, ESG compliance, and gender inclusion.
• Market systems development: Supporting regulatory institutions and policy frameworks that improve the long-term sustainability of Somalia’s energy sector.

The programme offers two complementary financing windows, designed to meet the needs of enterprises at different stages of growth.

Window 1: Early Market Development (Milestone-Based Grants)

For early-stage companies testing innovative business models or entering underserved markets.

• Funding range: USD 100,000 – USD 250,000
• Disbursement: 30% upon signing and market entry activities; 50% after verified sales and installations; 20% after performance verification and impact confirmation

Window 2: Market Scaling (Results-Based Financing)

For growth-stage companies scaling proven business models.

• Funding range: USD 300,000 – USD 400,000
• Disbursement: 30% after project initiation; 60% after installation and operational verification; 10% after post-installation performance verification

Beyond the grant

Successful applicants also gain access to:

• Technical Assistance (TA)
• Investment Advisory Services (IAS)
• Gender and inclusion support
• ESG compliance support
• Policy and advocacy support
• AECF Academy training programmes

 

Organization requirements

• Private, for-profit enterprise legally registered in Somalia
• Operating for at least two years
• Able to provide two years of audited financial accounts
• Demonstrated operational presence in Somalia
• Compliant with Somali legal and tax regulations

Financial requirements

• Annual turnover exceeding 50% of the grant amount requested
• Demonstrated ability to provide required matching funds

Compliance requirements

• KYC verification
• Anti-Money Laundering (AML) screening
• Integrity Due Diligence (IDD)
• Environmental and social compliance assessment

• Energy access: Expanded household access to affordable clean energy and improved electricity access for schools, health facilities, and community institutions.
• Economic growth: Increased productivity across agriculture, livestock, fisheries, and MSMEs, and reduced operational costs through clean energy adoption.
• Job creation: Direct and indirect green jobs in installation, maintenance, distribution, and service delivery.
• Income improvement: Higher incomes for households, entrepreneurs, and supply chain actors.
• Financial inclusion: Expanded access to financing for low-income consumers through PAYGo and lease-to-own models.
• Social inclusion: Greater participation of women and youth as customers, employees, entrepreneurs, and distribution agents.
• Climate impact: Reduced greenhouse gas emissions through reduced reliance on diesel-powered energy.
• Market development: Stronger renewable energy supply chains and greater private investment in Somalia’s energy sector.

The AECF LLC advises the public to beware of fraudsters falsely claiming affiliation with the organization. These individuals may offer assistance with applications or promise grant awards in exchange for money or personal information.

Please be aware:

· The AECF has NO agents or intermediaries for applications.

· Our selection process is rigorous, fair, and entirely free.

· Any request for payment for facilitation is fraudulent.

· All communication from AECF will come through official channels.

To verify any communication claiming to be from AECF, check the sender’s identity and contact us directly at info@aecfafrica.org or +254 111 035 000 before taking any action.

The AECF is committed to safeguarding applicants’ confidential information and ensuring a transparent, unbiased process. Stay alert and report any suspicious activity.

The AECF DOES NOT charge any application fee for participation in its competitions. Any request for payment in exchange for assistance with AECF-funded programs is a SCAM.