A New Initiative To Finance Off-Grid Energy Solutions Is Hoping To Bring Power To 20 Million Households By 2030

An initiative backed by the US government is aiming to facilitate the generation and sale of electricity from renewable energy sources in order to connect 20 million off-grid households in Sub-Saharan Africa to electricity by 2030.

The US$36 million Scaling Off-Grid Energy initiative was announced at the Global Entrepreneurship Summit in June as part of Power Africa, a programme initiated in 2013 by US President Barack Obama to increase access to electricity across Africa.

The initiative aims to build a market for clean energy through innovative entrepreneurship ventures that will make off-grid solutions affordable for rural communities.

Funding from the initiative will go towards boosting the capacity for off-grid production of clean energy from renewable sources such as wind, solar and micro-hydro plants that will power households outside the electricity grid.

Along with USAID, the initiative is backed by the U.K’s Department for International Development and the Shell Foundation.

The Grand Challenge is also set to drive research into new technologies and innovations that can address market growth constraints in specific countries.

Over 600 million people in Sub-Saharan Africa do not have access to electricity according to Chris Jurgens, director of the Center for Transformational Partnerships at USAID and a Scaling Off Grid Energy leader.

“Most countries are unlikely to connect their entire populations to grid electricity for years, if not decades. As a result, many households rely on expensive, polluting, and unsafe kerosene and diesel for their energy needs,” Jurgens added.

“Off-grid solutions can help to improve the quality of life for households by providing clean, reliable energy that can do everything from lighting up the night for children to do their school work to charging cell phones and running household appliances.”

Off-grid clean energy solutions provide a market-based, cost-effective solution to the lack of access to electricity for communities in remote areas. Renewable energy solutions, especially household solar sector, are critical to reach that goal, as the cost of solar technologies is rapidly falling, while the cost of alternatives such as kerosene is rising, making the economics more attractive.

The Scaling off Grid Energy initiative will provide early-stage entrepreneurs with technical support, financial access, drive customer demand, strengthen the marketplace for off-grid solutions and address market barriers.

"The Off-Grid Energy Challenge is a welcome initiative", Shashank Verma, Head of Advisory Services at the UK-based Global Village Energy Partnership, says. “It is incentivising productive power applications like solar refrigeration, which has huge potential to add value to agri-value chains and create additional income for low-income communities”.

He adds that there is definitely a demand for this type of early stage support. “These grants can launch new innovative productive power appliances to help them provide near-to-main-grid experience with totally off-grid solar systems.”

However, attracting local financing is still a real challenge. To succeed, the initiative needs to find a way to attract investment finance in order to achieve a meaningful impact. By using an enterprise model rather than aid, it is hoped that these affordable energy solutions will grow into profitable business ventures, and this will then catalyse private investments into the production and supply of electricity to new markets.

Published by Scidev.net Sub-Sahara Desk