Despite increasingly ambitious efforts under the UN Agenda for Sustainable Development to achieve universal electrification by 2030, it is estimated that by that time nearly 600,000 people in Sub-Saharan Africa alone will still not have access to electricity, and many more will still lack access to clean cooking. Many of these people live in rural and peri-urban areas that have not been reached by the central electricity grid, and where, due to the geography and/or widely dispersed populations, expansion of the grid would be too costly and technically difficult.
An increasing number of companies in Sub-Saharan Africa already offer solutions that employ innovative consumer payment schemes, often via mobile money, to ensure that the cost of clean energy is lower than that of candles and other traditional energy sources. However, despite great demand, the markets in which these companies operate are still viewed as risky by investors, and even successful companies face great difficulties accessing finance to scale up their businesses.
BGFA aims to help businesses overcome these challenges with the goal to contribute to inclusive and sustainable development in its focus countries, to further climate change mitigation and adaptation, energy access, gender equality and other relevant Sustainable Development Goals.
The BGFZ programme (www.bgfz.org) has connected 185,000 households+ ( 960,000+ people) since 2017 and won a 2019 Ashden Award and a 2019 UN Global Climate Action Award.
Find out more about the impacts of the BGFZ programme:
BGFZ Impact
BGFA has successfully concluded the Pre-Qualification of its first Call for Proposals in Burkina Faso, Liberia and Zambia, and applications passing the Final Application stage are now in the due diligence review stage. Selected projects are expected to be contracted in early autumn 2021.
BGFA opened its second Call for Proposals for micro-grid enterprises in Mozambique in February 2021. The Pre-Qualification stage closed for new applications on 29 March 2021, and the review of applications is expected to be completed by the end of September 2021.
BGFA opened its third Call for Proposals offering incentives to off-grid energy service providers in Uganda in April 2021. The Pre-Qualification stage closed for new applications on 22 June 2021. Applicants passing the review stage has been invited through the SmartMe online system on 14 September 2021 to take part in the Final Application stage and submit full project proposals. The Final Application stage is expected to be completed by February 2022.The plan is to have approximately 10 contracts signed by spring 2022, with project implementation starting in the same year.
BGFA Countries
The backbone of the Beyond the Grid Fund for Africa approach is an innovative financing mechanism that offers incentives to companies to close the ‘viability gap’, on a per-connection basis, of the rollout and scaling up of clean energy services in areas that would otherwise not represent viable markets.
When fully established, BGFA will work with a range of stakeholders in each of the target countries to improve local market conditions through a combination of capacity building and technical assistance to local energy authorities, general stakeholder outreach and market intelligence development. During the pilot programme in Zambia (BGFZ), this work was formalised as a national Off-Grid Energy Task Force, which is embedded in and led by the Ministry of Energy together with the Office of the Vice President, with REEEP providing secretariat services. Since its launch in April 2018, this Task Force has facilitated, among other things, the implementation of a VAT exemption for LED lights, the drafting of a new national mini-grid policy and the initiation of discussions to improve the affordability of off-grid energy solutions.
With its aim to reach at least 6 million people in five African countries in the next years, BGFA has the potential to generate very valuable market intelligence, including data on customer willingness and ability to pay. To capture this intelligence, BGFA will combine detailed market analysis with real-time data on deployment of energy service subscriptions.
Once the expanded programme is under implementation, the collected information will be shared with stakeholders through the Platforms for Market Change, in order to inform investment decisions and policymaking. The data will be gathered and analysed through the custom-built Energy Data and Intelligence System for Off-Grid Networks (Edison), which will be connected to the selected energy provider companies’ internal systems and provide live information on energy service subscriptions sold, payments, upgrades and warranty events, among other data points. This will allow for the verification of the results of BGFA in real time, and access to this data can also help to de-risk future investments in off-grid energy markets and guide policymaking in the countries concerned. The progress and impacts of the ongoing pilot programme in Zambia can today be followed live on Edison’s public dashboard (edison.bgfz.org).
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