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 daily 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 150,000 households (780,000 people) in two years and won a 2019 Ashden Award and a 2019 UN Global Climate Action Award.
Find out more about the impacts of the BGFZ programme:
Our Impact
Operating in Burkina Faso, Liberia, Mozambique and Zambia, the programme primarily targets the framework conditions of off-grid energy markets, lowering barriers to entry and scale for the private sector; catalysing investment and economic activity; and maximising development and climate impact per unit of public financing spent. In doing so, it provides a vital structural foundation for market-led delivery of modern, clean energy services to underserved rural and peri-urban areas.
A market scoping study is currently ongoing in the three new countries and for a possible new financing round in Zambia. Provided the market scoping study supports the planned expansion, and subject to the Funders’ approval, the aim is to launch Calls for Proposals in each focus country during the second half of 2020.
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.
Under its first funding round in Zambia, the Beyond the Grid Fund for Zambia contracted four companies to deliver 300,000 connections by 2021.
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 phase in Zambia, this work was formalised under BGFZ 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 5 million people in four African countries in the next five 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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