Winch Energy seeks $2.1 million to fund renewable energy technology

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Off-grid utilities provider Winch Energy wants to raise up to $2.1 million through a crowdfunding campaign to accelerate the installation of renewable energy technology in Sierra Leone and Uganda.

The Crowdcube campaign is part of an overall fundraising plan over the next two years and follows Winch Energy’s recent closure of the largest minigrid limited recourse financing deal so far, via Winch IPP Holdings.

The campaign provides new clean energy opportunities in developing countries for international investors. Winch Energy has already received investment from partner ITOCHU EuropePLC and is opening crowdfunding alongside this raise to secure additional funding for new projects and future expansion.

Founded in 2008, the company has an established project pipeline of over 485,000 connections, benefitting approximately 4.2 million people. Winch Energy has previously secured investment from Total Eren and Al Gihaz Holding. Earlier this year, it launched the Winch IPP Holdings Ltd platform in partnership with NEoT Offgrid Africa, which was established by Meridiam, EDF and Mitsubishi Corporation. The $16m project consists of 49 solar minirid projects in Uganda and Sierra Leone.

Powering Africa’s future
Globally, there are 759 million people without access to electricity, 75% of them in sub-Saharan Africa. The continent’s vast geography and lack of infrastructure means it is not viable to connect rural communities to the national grids, limiting socio-economic development.

With less than a decade to achieve the United Nations’ Sustainable Development Goal for universal access to clean energy (SDG7), Winch Energy is targeting African countries with the lowest electrification rates to bridge the gap.

Winch Energy’s proprietary Remote Power Unit (RPU) technology and software operating systems (Winch Dashboard) were developed specifically to broaden access to reliable, affordable clean energy in off-grid communities. An RPU installation benefits public services, improves living conditions, stimulates developing economies and creates a new market for electrical goods.

Changing lives in Sierra Leone
Winch Energy’s project to power 24 villages and a community health centre in northern Sierra Leone was awarded the Environmental Impact Award at the 2020 British Expertise International Awards. Through partnerships with Easy Solar and Orange, the project gives more than 40,000 villagers access to telecoms and mobile money services and gave local women the opportunity to start their own battery rental enterprise. Within six months 95% of energy customers reported their livelihood improved and over half of customers (56%) say their income has increased.

Run in conjunction with the United Nations Office for Project Services (UNOPS) and co-funded by the UK Government’s Foreign, Commonwealth & Development Office. During the COVID-19 pandemic Winch Energy electrified a further 12 health centres, delivering free power to provide refrigeration, lighting and 24/7 access to specialist medical equipment such as ventilators.

Reaching scale in Uganda
The company is also making excellent progress in reaching scale in Uganda to become the largest off-grid utility in the country. The company is currently constructing a project in the north consisting of 25 villages and 2,300 connections, benefitting 40,000 people through a tender funded by the EU and BMZ and implemented by GIZ.

It has also partnered with Total Uganda to electrify Bunjako Island near Lake Victoria, which will benefit the island’s population of 20,000. Winch Energy was also selected as the preferred bidder for an additional 15 sites in the south of the country and is currently finalising negotiations.

Winch Energy also powers communities in Benin, Mauritania and Angola with solar-powered renewable energy projects.

Nicholas Wrigley, founder and CEO of Winch Energy Limited: “There is huge potential in renewable technology for many countries in Africa and elsewhere. Increasingly, investors want to do good as much as make good returns and, following greater awareness of the importance of sustainability, investment in clean energy projects is more attractive than ever. We hope that our crowdfunding campaign helps us to accelerate our progress in the large-scale, off-grid renewable market and gives individuals the opportunity to invest in projects that offer promising growth, impact lives and directly change the future of these communities.

“We have witnessed first-hand the impact access to clean, affordable energy has. Our projects focus on improving education, healthcare provision and local enterprise. As well as enhancing daily life, it also attracts greater commercial growth.”

Source…

West Africa approves $465 million for regional electricity access

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The World Bank Group has approved a regional electricity access project in West Africa for a total amount of $465 million. This will see countries in the region expand electricity to over a million people.

Countries in the Economic Community of West African States (ECOWAS) will expand access to grid electricity to over one million people, enhance power system stability for another 3.5 million people, and increase renewable energy integration in the West Africa Power Pool (WAPP).

The new Regional Electricity Access and Battery-Energy  Storage Technologies (BEST) Project – approved by the World Bank Group for a total amount of $465 million – will increase grid connections in fragile areas of the Sahel, build the capacity of the ECOWAS Regional Electricity Regulatory Authority (ERERA), and strengthen the WAPP’s network operation with battery energy storage technologies infrastructure.

This is a pioneering move that makes way for increased renewable energy generation, transmission and investment across the region.

“West Africa is on the cusp of a regional power market that promises significant development benefits and potential for private sector participation,” stated Charles Cormier, practice manager in the Energy Global Practice at the World Bank. “Bringing electricity to more households and businesses, improving reliability, and harnessing the region’s substantial renewable energy resources—day or night—will help accelerate West Africa’s economic and social transformation.”

Over the past decade, the World Bank has financed close to $2.3 billion of investments in infrastructure and reforms in support of WAPP, considered the key to achieving universal access to electricity by 2030 in the 15 ECOWAS countries. This new project builds on progress and will finance civil works to accelerate access in Mauritania, Niger, and Senegal.

In Mauritania, rural electrification will be expanded through grid densification of existing substations, which will enable the electrification of Boghe, Kaedi and Selibaby, and neighbouring villages along the Southern border with Senegal.

Communities in Niger’s River and Central East regions that live near Niger-Nigeria interconnector will also gain grid access, as will communities around substations in Senegal’s Casamance area. Connection charges will be partially subsidised, which will help keep costs down for the estimated one million people expected to benefit.

In Côte d’Ivoire, Niger, and eventually Mali, the project will finance BEST equipment to improve the stability of the regional electricity network by increasing the energy reserve in these countries and facilitating the integration of variable renewable energy.

Battery energy storage technologies will enable WAPP operators to store renewable energy generated at non-peak hours and dispatch it during peak demand, instead of relying on more carbon-intensive generation technology when the demand is high, the sun is not shining, or the wind is not blowing.

It is expected that the BEST will further spur private sector participation in the region by supporting the market for renewable energy, as the battery-energy storage capacity installed under this project will be able to accommodate the 793 MW of new solar power capacity that WAPP plans to develop in the three countries.

Wetzel, World Bank Director of Regional Integration for sub-Saharan Africa, the Middle East, and Northern Africa. “By working together, these countries can optimize investments and economies of scale, harmonize equipment and standards, and synchronize systems to deliver the transformative power of electricity to more people and usher in a new era of low-carbon energy trade.”

The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives.

IDA is one of the largest sources of assistance for the world’s 76 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change to the 1.5 billion people who live in IDA countries. Since 1960, IDA has supported development work in 113 countries. Annual commitments have averaged about $18 billion over the last three years, with about 54% going to Africa.

Germany’s KfW launches green hydrogen programme for South Africa

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On behalf of the German government, the German development bank KfW has initiated a programme of up to €200-million in size to support the establishment of green hydrogen projects in South Africa and it intends releasing a formal request for information (RFI) by the end of June.

The funding, which is in the form of concessional loan finance, must be disbursed by December 2023 and KfW has appointed the Council for Scientific and Industrial Research (CSIR) and Meridian Economics to help it identify and evaluate high-potential projects for implementation during the course of this year.

Green hydrogen is produced using renewable electricity to split water into hydrogen and oxygen using an electrolyser. The German government’s National Hydrogen Strategy, adopted in 2020, envisages the energy carrier playing a key role in the decarbonisation of those sectors that are difficult to abate using renewable electricity directly, such as marine transport, long-distance land freight, cement, chemicals and steel.

Crucially for countries with potent renewables resources, such as South Africa, the strategy recognises the limits of producing green hydrogen in Germany itself and, therefore, envisages the creation of international partnerships in order to potentially import green hydrogen and green-hydrogen derivatives, such as green ammonia, carbon-neutral jet fuel and green iron and steel.

Germany expects to be producing only 420 000 t of the three-million tons it will be consuming yearly by 2030.

CSIR’s Thomas Roos tells Engineering News that a broad range of opportunities will be solicited through the RFI process, which has been preceded by a market-testing exercise that is allowing potential participants to share a high-level summary of their proposed projects via the Hydrogenproject@csir.co.za email address by June 4.

Roos says the projects could involve the production, transportation, export and/or storage of green hydrogen and green-hydrogen products, as well as projects in existing materials and chemicals value chains that support a transition from fossil-based processes to ones based on green hydrogen.

In addition, KfW is open to receiving funding proposals for innovative financial instruments that could either boost the immediate demand for green hydrogen, which is currently more expensive than grey hydrogen produced from fossil fuels, or unlock funding for green hydrogen projects.

The price premium between grey and green hydrogen remains material, with grey hydrogen currently being produced at a cost of about €1.50/kg and green hydrogen at €4/kg. However, that competitiveness gap is expected to close as more and larger-scale electrolyser plants are built around the world.

Meridian’s Adam Roff says that financial instruments are already starting to play an important role globally in ensuring that demand is created for green hydrogen and he is optimistic that South African financial institutions will seek to leverage the opportunity created by the KfW programme to introduce similar innovations locally.

The programme intends identifying both private- and public-sector projects that are already at a prefeasibility stage but, given the government-to-government nature of KfW’s activities, all project funding will be disbursed through a South African public institution.

Roff says the public entity will act either as a financial intermediary, on-lending to the recipients, or as a direct implementing partner in the project.

Earlier this year, Trade, Industry and Competition Minister Ebrahim Patel announced that he had mandated the State-owned Industrial Development Corporation to lead government’s efforts to commercialise green hydrogen. For the purposes of this project, other public entities such as the Development Bank of South Africa could also feature.

KfW, which formally launched the South African project on May 24, says South Africa’s rich endowment of world-class renewable energy resources, strong existing technical and financial capabilities and access to platinum group metals places the country in an extraordinary position to develop a thriving, globally competitive green hydrogen industry.

“The key objective of this initiative is to support the growth of a green hydrogen economy in South Africa by identifying and supporting high-impact project opportunities that best exploit the decarbonisation potential offered by green hydrogen,” the development bank’s launch statement reads. 

Are you part of a start-up or a scale-up? Discover the project that Ecomondo has devised for you

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Submit your application by SEPTEMBER 7, 2021
Take part in the Call for Innovation 2021

The initiative is dedicated to innovative Italian and international start-ups and scale-ups that offer services and products related to greentech, environmental sustainability, renewable energy and sustainable mobility.

The project has multiple objectives: to offer start-ups substantial visibility, to create opportunities for attending companies to meet start-ups, to promote Italy’s innovation system as the key channel for product development in the green sector.

Who does it target?

The initiative targets start-ups and scale-ups that meet the following requirements:

  • Technological lines of development consistent with the themes of the two shows Ecomondo and Key Energy, in the green tech, renewable energy, energy efficiency, electric mobility and urban sustainability sectors.
  • They have already completed at least the seed round, or alternatively, already have a client portfolio and are active on the market.
  • They have a website and/or promotional material in English.

How to participate:
To take part in the Start-up & Scale-up Innovation 2021 project, register online no later than 4.00PM, Tuesday 7 September 2021.

Apply now!

Appointment for Driving the energy Transition from 8 to 10 June

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Forward
Appointment with WEEK 4, from 8 to 10 June
Climate Change & Environmental Protection
On the road to Key Energy 2021, take part in the fourth Digital Green Week
The fourth Digital Green Week is drawing near: it will be an unmissable opportunity to network and engage with the community and the companies on the platform, while enjoying a packed schedule of themed conferences.

The appointment will run from 8 to 10 June, with the theme “Climate Change & Environmental Protection”.
We will talk together about wind energy and solar photovoltaics, green investments, energy communities, PPAs and new generation to guide the energy transition process we are experiencing, also thanks to the investments envisaged by the application of the PNRR.

How to participate?
It’s simple: access the visitors reserved area, check your details and … get ready for the event!

Save the date!
9 JUNE | 10.00-11.15 AM
Investment Opportunities for Sustainable Energy in the Philippines
Organized by the Italian Chamber of Commerce in the Philippines
Find out more
10 JUNE | 4.30-5.30 PM
Monitoring and Targeting for energy efficiency: the foundations for a green future
Organized by: Esta (Energy Services and Technology Association), TEAM (Energy Auditing Agency Ltd)
Find out more

Take part in the call for papers, you have until 30 June

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Web version Forward
The initiative is aimed at researchers, research bodies, companies and institutions for scientific presentations on topics relating to: waste and water management and valorization, circular economy, monitoring & control, sustainable remediation techniques, agri-food, forestry & biobased industry
2021 Call for Papers
is open

Want to make a contribution?

You have until 30 June to submit your application.

CALL FOR PAPERS 2021

The Ecomondo 2021 CALL FOR PAPERS is officially open.
The topics relate to the core sectors of the show: management and valorisation of waste and water resources, the circular economy, monitoring & control, sustainable reclamation techniques, agri-food, forestry & biobased industry.

HOW TO TAKE PART

To take part in the call for papers, send us your application by registering your data online HERE.

WHO THIS IS AIMED AT

The call for papers is aimed at:
• University researchers, research bodies, companies
• Contacts and specialists from regional, national and international institutions

DEADLINE

Abstracts must be sent no later than 30 June 2021.

Apply now!

AfDB backs local currency financing structure for off-grid projects

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In response to low electrification rates in some remote areas across Africa, the African Development Bank (AfDB) has approved a proposal to help Zola EDF Côte d’Ivoire (ZECI), to mobilise a loan in local currency to the tune of $28 million.

The loan has been arranged by Société Générale de Banque in Côte d’Ivoire (SGBCI) and Crédit Agricole Corporate and Investment Bank (Crédit Agricole CIB).

The AfDB will provide a partial credit guarantee covering part of the guaranteed loan facility as a catalyst.

NEoT CI, the special purpose vehicle currently being created to mobilise the receivables-backed senior loan is sponsored by NEoT Offgrid Africa (NOA), an investment platform focused on distributed energy in Africa, managed by NEoT Capital, with Meridiam and EDF as investors.

Additionally, the Grameen Crédit Agricole Foundation will participate in the financing of ZECI and will monitor environmental and social norms for the duration of the transaction.

Local currency financing structure
The project will pilot a local currency receivables-backed financing structure to allow ZECI – a 50/50 joint venture between Off-Grid Electric (OGE) and EDF – to provide access to approximately 100,000 rural households with pay-as-you-go solar home systems by 2020.

This operation would be the first large-scale local currency financing structure using the securitisation technique for the off-grid renewable energy sector in Africa.

ZECI’s business model, which consists of selling solar kits that meet international quality standards, under lease-purchase agreements for a three-year period (creation of predictable receivables payable with mobile money), makes it easier for low-income customers to access clean energy.

In addition, it enables financial inclusion, including through the establishment of credit history, as well as access to financing and ownership of assets.

Amadou Hott, the bank’s vice-president in charge of energy noted that “the financing is in line with the 2016-20 National Development Plan of Côte d’Ivoire, the Strategic Plan for the Energy Sector and the Electricity for All programme initiated by Ivorian authorities to electrify all localities by 2020.”

Article as previously published on https://www.esi-africa.com/

SON approves 4 new standards for renewable energy

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As part of efforts towards actualizing the Federal Government’s economic diversification agenda, the Standards Organisation of Nigeria (SON) has unfolded new standards for the renewable energy sector.

According to the Director General, SON, Mallam Farouk Salim, apart from increasing access to power supply across the country, the new standards would open up improved investments in the sector.

Salim explained that the solar power industry relies heavily on standardisation, adding that renewable energy has become increasingly important across the country.

The new standards are energy meters, solar photovoltaic (PV) panels, inverters, batteries and charger controllers.

According to the standards body, this is to substantially increase the share of renewable energy in the global energy mix under the United Nation’s Sustainable Development Goals (SDGs).

Besides, the standards body stated that in a country such as Nigeria where expensive and ecologically harmful diesel generators are widely used, the unveiling of new standards would improve access to electricity in Nigeria.

SON said it would deploy a multi-stakeholder approach with consultations and inputs from relevant public-private entities to develop a more regulated and standardised market that encourages further investments into Renewable Energy (RE) and Efficient Energy (EE) sector.

To achieve this, the SON is currently being supported by the Nigerian Energy Support Programme (NESP), a technical assistance programme co-funded by the European Union and the German Government and implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH in collaboration with the Federal Ministry of Power. The organisation noted that due to its flexibility and affordability, solar power has fast become the most popular form of renewable power.

SON said NESP aims to improve the framework conditions for investments in the application of renewable energy and energy efficiency and rural electrification, saying that its main objective is to provide guidance towards the achievement of the objectives of the strategy set for the implementation of renewable energy policy.

“NESP aims at enabling and fostering investments in a domestic market for Renewable Energy (RE) and Energy Efficiency (EE) and improving access to electricity in Nigeria,” SON declared.

According to SON, following extensive consultations, 37 standards were selected and approved in November 2020, pointing out that

given renewable energy’s increasing prominence, the solar power industry understandably relies heavily on standardization. “Standards play an essential part in testing, energy conversion, reflectance or materials properties, fabricating arrays, integrating into the smart grid and assuring workplace safety.”

The agency has been enlightening consumers on how to make informed purchasing decisions on energy serving electrical products and appliances.

Scaling the Last-Mile Distribution Industry With Data-Driven Lending

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In emerging and remote marketplaces across the globe, low-income consumers rely heavily on last-mile distributors (LMDs) for access to life-changing products ranging from clean cookstoves to smartphones. To take a key example, solar-powered products and devices, like solar home systems, have become instrumental in ongoing efforts to meet energy demand in under-electrified regions. And this demand is significant: The market for off-grid solar products across sub-Saharan Africa and the Asia-Pacific region consists of 716 million people without electricity and more than 1 billion people with an unreliable energy grid.

However, despite the critical role they play in the sale and distribution of such important products in these marketplaces, LMDs struggle to access the funding they need to scale. Fortunately, data-driven innovations in lending are emerging to close this financing gap, providing LMDs with the capital required to grow their businesses and reach more last-mile consumers. Below, we’ll explore the funding challenges these businesses face — and how a data-driven approach to lending can help.

THE PURSUIT OF SUSTAINABLE FUNDING: A LONG-TERM CHALLENGE
According to the Global Distributors Collective (GDC)’s) 2019 Last Mile Distribution: State of the Sector report, LMDs receive a majority of their equity and debt backing from family, friends, angel investors, crowdfunders or the founders themselves. While they are reasonable sources of seed capital, these sources of funding are generally insufficient to support growth and scale in a capital-intensive business. This explains why GDC members consistently cite limited access to financing as their number one challenge. Prior to COVID-19, 94% of GDC members were looking for additional financial support, with that need remaining largely consistent throughout the pandemic.

Unfortunately, the funding gap described above is disproportionately felt by locally owned and women-owned LMDs, as well as those serving rural communities. Even before COVID-19, the majority of investment funds flowing into the last-mile sector were allocated toward foreign-owned energy access companies. This disparity has persisted throughout the pandemic, with 75% of the off-grid capital committed in 2020 channeled into just three international companies (as of August 31, 2020). According to Emma Colenbrander, head of the Global Distributors Collective, this trend is particularly problematic due to the fact that under-funded, locally owned LMDs are often better equipped to service rural regions, given their understanding of local demand and networks. Without access to adequate funding, smaller, more localized LMDs are at an increased risk of losing their ability to provide life-changing products and employment opportunities to vulnerable communities.

ADDRESSING BARRIERS TO DEBT FINANCE FOR LMDS
Debt capital is especially important for LMDs looking to scale their pay-as-you-go (PAYG) businesses. PAYG is a popular sales model for LMDs serving low-income consumers. The model requires LMDs to make upfront purchases of consumer devices (like cookstoves, solar home systems or smartphones), which they then sell to end-users through a “lease-to-own” model, in which the devices require periodic, incremental payments to remain active until they’re fully paid off and owned by the end-user. As their sales increase, LMDs need capital to finance their lending on a growing portfolio of PAYG receivables, while also continuing to refresh their supply of inventory to sell to new customers. Debt funding is crucial to enabling this model, yet there are a series of hurdles inherent to the PAYG last-mile sector and its unique market conditions that make lenders reluctant to underwrite LMDs.

First, LMDs often struggle with limited financial management capacity and a lack of detailed portfolio quality data. Much of the data they do provide to lenders is self-reported in the context of weak regulatory environments. As a result, it has historically been difficult for investors to gather high-quality, verified data to assess an LMD’s performance and the potential risk of its PAYG portfolio. Second, the cost of underwriting, transacting and monitoring loans with LMDs in emerging markets is often high relative to the small size of the transaction. Financiers can underwrite transactions that are 10 times the size for a similar level of effort. Finally, limited access to equity and grant financing often leaves LMDs with weak balance sheets, preventing them from taking on more debt without becoming over-leveraged.

BUILDING A DATA-DRIVEN APPROACH TO LENDING IN LAST-MILE MARKETS
Fortunately, new solutions hold promise when it comes to addressing the funding shortages that LMDs in emerging markets face. Lenders are leveraging new data sources to assess risk and make informed underwriting decisions when investing in smaller last-mile businesses. As one example, at Angaza, we’ve joined forces with impact fund manager and advisor SIMA to create the SIMA Angaza Distributor Finance Fund (DFF), a data-driven debt fund launched to accelerate the flow of capital to LMDs.

Angaza’s software platform serves over 200 distributors of life-changing products across 50 countries. As a provider of Software-as-a Service (SaaS) technology designed specifically for last-mile businesses, our data analytics capabilities and unparalleled PAYG dataset provide unique visibility into LMD performance, PAYG asset quality and growth potential. As a fund manager, SIMA has deployed more than $100 million into increasing energy and financial access over the last two years. In addition to its underwriting expertise, it has a deep knowledge of the business fundamentals of PAYG distribution, having made loans to 20 off-grid companies with ticket sizes ranging from $150,000 to $10 million. By combining Angaza’s wealth of data on real-time sales and cash collections with SIMA’s extensive experience lending to businesses servicing off-grid communities, DFF aims to extend affordable credit to LMDs and increase commercial investors’ interest in the sector.

A DEMONSTRATED IMPACT ON UNDER-FINANCED LMDS
The efforts behind DFF are already paying off, with five last-mile solar distributors receiving loans in recent months. For instance, Deevabits Green Energy of Kenya, one of DFF’s first portfolio companies, distributes solar energy products to rural communities via a PAYG billing model. Despite consistently surpassing sales goals, Deevabits found it challenging to finance growth. Borrowing from local commercial banks was not a viable solution for the small company due to excessively stringent collateral requirements. However, since receiving DFF funding in September 2020 — alongside financial management support funded by USAID’s Power Africa, a DFF partner — Deevabits has been on an impressive growth trajectory, with sales increasing more than twofold since its last fiscal year.

SUPPORTING LOCAL ENTREPRENEURS AND CLOSING THE GENDER GAP IN LAST-MILE MARKET
Supporting local businesses is a top priority, as DFF furthers its goal of bringing the data revolution to the last-mile sector while infusing companies like Deevabits with the capital they need to reach more underserved consumers. By utilizing Angaza’s PAYG data, DFF is able to segment LMDs based on their cash flows, asset quality and other key operating metrics, allowing it to home in on high-potential borrowers. Leveraging SIMA’s underwriting expertise, DFF reviews this verified financial data, alongside self-reported company information, to evaluate a potential borrower’s underlying business performance and trends. When applying this data-driven approach to sourcing and underwriting, it gives particular focus to locally-owned businesses in order to further the empowerment of small and medium LMDs.

Along with local ownership, the fund also focuses on the issue of gender inclusion in the last-mile sector, as women are often most impacted by a lack of access to clean energy solutions. Despite their clear need for clean energy, research has found that the energy access sector fails to integrate women’s experiences and expertise, exacerbating the gender gap in energy access. To help address this inequity, DFF also applies a gender lens to its investment process, in order to support companies that are founded or led by women, excel in employing and promoting women, or primarily serve female customers. As part of this approach, Power Africa is developing Gender Action Plans for DFF portfolio companies to help guide them in advancing gender equity. Additionally, the impact measurement company 60 Decibels, another DFF partner, is conducting end-customer research with a special focus on gender to help portfolio companies understand how they can better serve female customers.

DATA TRANSPARENCY IS THE KEY TO ACCELERATING SECTOR GROWTH AND INCLUSION
DFF remains committed to democratizing access to data, to eliminate funding bias in the last-mile sector and empower local and women-owned LMDs with the resources they need to scale their operations. Eventually, the fund seeks to standardize the data needed to assess LMD investment opportunities, in order to provide LMDs with full transparency into the underwriting process. With this knowledge, LMDs will be better able to understand how they are being evaluated by potential lenders, which will enable them to improve upon the benchmarks that translate directly into more favorable loan interest rates. In the future, this work will ideally provide smaller-scale LMDs in often-overlooked countries and regions with access to the data and funding they need to efficiently scale their businesses and grow their networks. In turn, this will allow them to better serve vulnerable communities with the products they need to improve their lives and build their incomes while moving the world closer to achieving the Sustainable Development Goals.

Erin Junio is a Content Specialist at Angaza.

The Future of Lighting Global

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IFC winds down Lighting Global Support to focus on mobilizing investment for Off-Grid Solar sector, World Bank expands program with ESMAP

A Letter from Russell Sturm & Dana Rysankova

Colleagues,

For more than a decade, the World Bank Group’s Lighting Global program has been at the forefront of the drive to expand access to modern solar energy services for people living without reliable grid electricity. Through Lighting Global, IFC and the World Bank have partnered to accelerate the development of the off-grid solar market, now reaching nearly 40 countries throughout Asia, Africa, the South Pacific, and the Americas. IFC has worked closely with industry and local stakeholders to build the market, while the World Bank supports governments in building the policy enabling environments and access to finance facilities that establish the foundation for the market’s continued growth.

While the broad strokes of our approach have remained the same since our first pilot program launched in Kenya in 2009, we have continually fine-tuned and calibrated our interventions in order to adapt to local needs, rapidly developing technological and business model innovations, market dynamics, and energy access priorities. As the market matured, we evolved the Lighting Global toolkit, seeking to expand the frontier of the sector and address barriers to enable innovation in the industry and increase consumer access across multiple market segments.

We began our mission with intertwined objectives — to enable access to clean modern energy services, by catalyzing a sustainable off-grid market. Our goal has always been for this market to eventually function without our continued foundational market support, which was initially so important to the industry’s development. Today’s US$1.75 billion annual market reflects a vibrant ecosystem of manufacturers, distributors, retailers, investors, donors, development professionals, and others — together demonstrating that we have met our objective to create a self-sustaining market.

The Future of Lighting Global

Within this ecosystem, IFC will now wind down its market development support activities under Lighting Global this June, as planned. The World Bank, under the Energy Sector Management Assistance Program (ESMAP), will continue supporting our Lighting Global activities, as we evolve to the next stage, with increased emphasis on scaling up financing and pro-poor targeting to ensure no one is left behind.

Under ESMAP, Lighting Global will continue to leverage World Bank operations and policy dialogue with Governments to keep expanding off-grid solar markets to reach the remaining 790 million people who are still living without energy access. We will also continue to carry out and publish market research, and partner on flagship items including the Market Trends Report and the GOGLA-Lighting Global Off Grid Solar Forum, the core biennial knowledge resources that have supported the global market since their launch in 2009. While Lighting Global has eclipsed its initial goal of reaching 250 million people with modern off-grid solar services, the World Bank team is now singularly focused on contributing to achieving Sustainable Development Goal #7 — achieving universal energy access by 2030.

IFC’s departure from Lighting Global will allow for the necessary recalibration to best address the off-grid sector’s next stage market needs. IFC’s core Lighting Global activities are now adapted to today’s market and led by a variety of strong partners, allowing IFC to shift focus to the essential task of mobilizing private investment to enable the commercial market to reach the scale needed to help deliver universal energy access by 2030. We will do this by leveraging IFC investment resources to support local financial institutions to provide needed local currency debt into the sector, and to pilot and help scale new financial instruments that will crowd in mainstream investors to a capital hungry sector. The IFC-CGAP-GOGLA collaboration on PAYGO PERFORM will continue as the foundation underpinning this work.

IFC’s programs have always had a finite life, and over the coming months, we will use the IFC program impact evaluation process to inform future programmatic engagements in the sector and enable climate-smart economic development. Lighting Global industry collaborations will continue to be core to this effort, including partnership with sector stakeholders through the PAYGO PERFORM and Path to Profitability initiatives. Many of the core program services that have been carried out by IFC to date will also continue – either through the ESMAP Lighting Global program, through IFC’s market creation work in the sector, or through IFC implementation partners.

Passing the Torch to Our Partners

The independent partners and institutions we helped to establish – GOGLA and VeraSol prominent among them – will now take the lead role on a range of fundamental sectoral support activities, initiated by Lighting Global, that will continue to provide foundational support to the market into the future.

VeraSol, a global partnership managed by CLASP and the Schatz Energy Research Center, will continue to serve as an important touchpoint on product quality for industry, development institutions, and governments. An evolution of Lighting Global Quality Assurance, VeraSol continues to define and support a rigorous quality assurance framework that has been so instrumental to the industry’s success. The program is building on that success by expanding its quality assurance services beyond lighting to encompass off-grid appliance testing. This evolution reflects the changing trajectory of the off-grid solar market and opens the door to a new world of interoperability and further industry diversification.

GOGLA, Lighting Global’s steady partner since the industry association grew out of the second Lighting Global industry meeting in Nairobi in 2010, will continue to take the lead on a range of key services to the industry which grew out of Lighting Global. In addition to the multiple industry support and policy initiatives that GOGLA leads, they will continue to lead the semi-annual product sales reporting and will continue to partner with Lighting Global on the biannual Off-Grid Solar Industry Forum along with the Market Trends Report that accompanies it.

Looking toward a future free of energy poverty

Both through an evolving Lighting Global program and beyond, the World Bank Group remains committed to supporting the off-grid sector. The essential role that the off-grid sector must play in order to achieve SDG7 is well established, and we are committed to continuing to deploy the World Bank Group resources in support of the off-grid solar market in our quest to realize that ambition.

The remaining unconnected homes are increasingly predominantly rural, remote, poor, and living in contexts suffering from fragility, conflict, or violence (FCV). With the more easily-reached already largely served by the sector, an ESMAP-led Lighting Global will focus increased attention on how the remaining population segments can be reached by the off-grid market.

It has been our pleasure to work alongside you for more than a decade as a joint IFC-World Bank Lighting Global team and see our spark of an idea mature. We are proud of the impact we have collectively achieved so far – and are looking forward to continuing the drive to serve the more difficult to reach last-mile populations through the latest evolution of the Lighting Global program. Under ESMAP, Lighting Global will build on the program’s existing success and lessons learned in order to expand off-grid markets to achieve universal access by 2030. We are excited to continue this work with all of you, as we develop new avenues of collaboration between the World Bank and IFC, while maintaining the aspects of Lighting Global currently best suited to support our shared mission to reach the underserved.

With hopes for light and access for all,

Russell Sturm & Dana Rysankova

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