Power Africa: Beyond the Grid Fund for Zambia

The Power Africa: Beyond the Grid Fund for Zambia is an ambitious new undertaking to bring clean energy access to one million Zambians and accelerate private-sector growth in energy generation and distribution in the country.

The Beyond the Grid Fund for Zambia will operate from 2016-2018, with a maximum funding level of €20m. Within that period we intend to provide 1 million Zambians with access to clean electricity.

THE BEYOND THE GRID FUND FOR ZAMBIA WILL:

  • Provide access to energy to 1 million end users within four years; this translates to electrifying approximately 167,000 households (assuming 6 people per average rural Zambian household);
  • Reduce dependence on fossil fuels through a shift toward sustainable and renewable energy generation;
  • Increase confidence and capacity of banks to extend credits to off-grid business ventures;
  • Support the transfer of technology and knowledge that accelerate Zambian energy sector growth.

The Fund is managed by the Renewable Energy and Efficiency Partnership (REEEP) on behalf of the Swedish Embassy in Zambia and in cooperation with Zambian partners.

SUPPORTING THE ZAMBIAN GOVERNMENT ENERGY STRATEGY

Zambia faces an energy – and in particular electricity – supply gap in meeting the growing needs of its people and economy. The country is seeking new ways to substantially increase its energy supply to meet this growing demand and extend the national grid to rural populations.

A number of initiatives, such as the IFC and IDC solar PV programs, are aimed at creating a more conducive environment for renewable energy and energy efficiency. Central factors which play a role in ongoing developments are increasing energy prices, the gap in supply, the introduction of utility incentives for sustainable energy, and government commitment and efforts to ensure a cleaner energy mix.

95% of rural Zambians are without access to energy. Addressing this gap through modern and affordable off-grid solutions – capable of targeting not only basic energy needs (i.e. lighting and cooking energy), but also productive uses of energy at both household and rural enterprise levels, especially in agriculture and agribusiness – is a significant challenge.

OPPORTUNITIES FOR INVESTMENT BEYOND THE GRID

Zambia has enormous potential for increased power production from a vast array of renewables, including solar, hydro, (solid) biogas, biodiesel, ethanol, and waste to energy. Basic regulatory frameworks are in place that make it possible for independent power producers to generate and sell power, as well as operate off-grid or on isolated mini-grids. As more and more people witness the benefits and potential cost and labour savings from electricity first hand, demand is likely to grow further. Thus the poor state and low coverage of the national grid present clear investment opportunities for renewable energy and novel business models targeted at communities, businesses, households and social institutions outside major hubs.

Sweden, through its Embassy in Lusaka, will explore these opportunities by promoting ventures that can meet the needs and improve the lives of poor people, while paving the way for future investments in sustainable energy. A focus on energy services should take into account that energy connections alone are not the ultimate objective: it is how that energy is put to use that really matters – perhaps reading under a LED light at night to further your education; cooling your milk to be able to sell it on to the market; cooking on biogas instead of collecting firewood, or starting your very own local IT-business. As needs are likely to differ, varying quantities and qualities of electricity can be supplied to consumers at varying levels of affordability.

Though admittedly scarce, there are some promising examples of pro-poor, off-grid innovation reaching scale, which give hope for a new service revolution such as the one Africa is experiencing in telecommunication. The lack of access to suitable financing for off-grid investments, however, remains a key constraint. By demonstrating viable business models, we hope to unleash a cascade of future investments in renewable energy and off-grid solutions.

IMPLEMENTING ORGANISATIONS

The Fund, which launched in January 2016, is financed by Sida, the Swedish International Development Cooperation Agency and implemented by the Renewable Energy and Efficiency Partnership (REEEP) and its partners. REEEP is an international non-profit organization that advances markets for clean energy in developing countries to reduce greenhouse gas emissions and build inclusive economic growth. Core partner in this project is the Private Finance Advisory Network, PFAN. REEEP and PFAN have gathered a team of highly dedicated and experienced professionals to develop and implement the project. One of the central features of REEEP’s methodology is the ability to share accumulated knowledge through an established monitoring, evaluation and learning knowledge system.

APPLICATION

The first financing round of the Fund has closed. New financing rounds will be announced on this page in due course.

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