Where it is available, electricity has many uses. It can illuminate homes and classrooms, facilitate communications, keep vaccines cool, pump water for irrigation, and power the small machines that catalyze small businesses even in remote areas.
In sub-Saharan Africa, this proves to be rather difficult. Delivering cheap electricity requires strong economies that make connecting remote communities to the utility-provided electrical grid affordable. Fortunately, in a world of ever-cheaper renewable energy in which solar, wind, and hydro systems can go where the grid cannot, there is a growing menu of options for expansion. A future of a fully powered sub-Saharan Africa is not completely out of reach.
Getting Power to those Off-the-Grid
The U.S. Agency for International Development (USAID) believes in a fully powered African future and has chosen to invest in it. In 2018, the United States government launched the Power Africa Off-Grid Project (PAOP). The four-year program will bring clean power to six million sub-Saharan households and businesses that are otherwise unable to access electricity from their local utilities. As the implementer of the program, Fijishi focuses on accelerating off-grid energy in the region.
The project enables better development outcomes for those who gain access to energy by working to secure three tangible results in the region: the increased number of actual off-grid connections, private and commercial financing available for off-grid companies, and the improvement of national off-grid market and regulatory structures. PAOP operates in 26 countries: Benin, Burkina Faso, Cameroon, Chad, Côte d’Ivoire, the Democratic Republic of Congo, Ethiopia, Ghana, Guinea, Kenya, Lesotho, Liberia, Madagascar, Malawi, Mali, Mozambique, Niger, Nigeria, Rwanda, Senegal, Sierra Leone, Somalia, Tanzania, Togo, Uganda, and Zambia.
Increasing the Number of Off-Grid Connections
As Power Africa plans to add 60 million new power connections across sub-Saharan Africa by 2030, Fijishi shares Power Africa’s vision that increasing the number of off-grid companies operating in the region will get the job done. The project provides various types of technical advisory support to companies to encourage such growth. This includes facilitating introductions to private investors and financiers, developing, testing, refining new business models, offering business advisory services and much more. To advance Power Africa’s commitment to increasing women’s participation in the male-dominated energy sector, the project also assists companies to mainstream gender considerations in their business operations.
Making Private Financing Available for Off-Grid Companies & Projects
Sustaining the growth of off-grid companies and projects requires significant funding by private investors. To do so requires targeted interventions with private sector companies, governments, investors and donors to make off-grid electrification more attractive for investment. This will increase the number of off-grid companies active in sub-Saharan Africa and drive down sector costs, making energy more accessible.
PAOP engages investors and provides the support needed for them to begin investing in off-grid companies or to grow existing investments in the sector. The support includes, but is not limited to, providing market intelligence and facilitating dialogue between existing investors active in the off-grid sector and new potential market financiers.
Since off-grid projects and companies are extremely vulnerable in the early stages of development, the project developed and administers the Catalyzing Off-Grid Investment Fund. PAOP issues grants to various project developers and private sector actors to support companies and projects attracting the necessary financing from the investment community.
Market Policy and Regulatory Improvement
By improving market and regulatory structures, as well as improving access to private capital for the commercial off-grid sector, PAOP is substantially increasing the total number of off-grid connections and securing positive outcomes for the future. PAOP is also improving the environment for off-grid investment, sales, distribution, and operation on the national level by providing technical assistance to national governments.
Advocating for better tariff and value-added tax structures and supporting regulatory and policy review processes accomplish this goal. Increasing the number of countries with national energy plans that integrate off-grid resources is also a top priority and ensures that stakeholders can sustainably develop off-grid energy solutions after the four-year program is complete.
An Energized, Climate-Resilient Future
Access to energy is important but to sustainably improve outcomes in health, education, and employment – especially for the new generation of Africans entering the workforce – requires further development in the energy sector. For this reason, electricity serves as a platform for economic and social development.
And over the long term, increasing renewable, off-grid solutions have the potential to significantly reduce emissions and increase communities’ ability to weather adverse climate effects. Fijishi is proud to draw on its experience in implementing complex, multi-sectoral projects to support the U.S. government in this ambitious and game-changing initiative, and we are proud to be at the heart of reforms that will bring energy to households and small businesses that will perhaps have it for the very first time.