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