The Power Africa: Beyond the Grid Fund for Africa, funded by Sweden, managed by NEFCO and implemented by REEEP, aims to replicate the results of the Beyond the Grid Fund for Zambia (www.bgfz.org) and bring clean, affordable off-grid energy access to millions of people in Burkina Faso, Liberia, Mozambique and Zambia.
The Beyond the Grid Fund for Africa (BGFA) aims to build markets for off-grid energy to bring access to clean, affordable off-grid energy to at least 5 million people in Burkina Faso, Liberia, Mozambique and Zambia by 2025. The programme targets primarily 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 impacts 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.
The BGFA is a facility funded by Sweden, managed by the Nordic Environment Finance Corporation (NEFCO) as Facility Manager and implemented in corporation with REEEP as Implementation Manager. It builds on the success of the Beyond the Grid Fund for Zambia, funded by Sweden and implemented by REEEP, which connected over 145,000 households (750,000 people) in two years and won the 2019 Ashden Award for Innovative Finance and a 2019 UN Global Climate Action Award.
How BGFA Works
The BGFA approach rests on three pillars:
Incentives and Procurement
The backbone of the BGFA 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, BGFZ has contracted four companies to deliver 300,000 connections by 2021.
Platform for Market Change
BGFA will when fully established also work with a range of stakeholders to improve market ecosystem conditions through a combination of capacity building and technical assistance, stakeholder outreach and market intelligence development. In Zambia, this work has been formalised under BGFZ as the Off-Grid Energy Task Force, which is embedded in the Ministry of Energy and led by the Ministry of Energy and the Office of the Vice President, with REEEP providing secretariat services. Since its launch in April 2018, this Task Force has met four times and, among other activities, facilitated 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.
As mentioned, a Market Scoping process is still ongoing in the three new countries as well as in Zambia to see if there is basis for a new call for proposals there. Provided the outcomes of the Market Scoping support the expansion to all of these countries and subject to donor approval, the aim is to establish and support similar platforms in Burkina Faso, Liberia and Mozambique, and to facilitate opportunities for inter-country exchange of experiences.
Market Information and Analytics
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 programme is established, the resulting information will be shared through the Platforms for Market Change foreseen in each of the new countries in addition to the one already functioning in Zambia, to be used 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 REEEP to verify the results of BGFA in real time, and the data will have potential to de-risk future investments in concerned countries’ off-grid energy markets, and to help guide policymaking. The progress and impacts of BGFZ can today be followed live on EDISON’s public dashboard (edison.bgfz.org).
- Press Release: Sweden's Beyond the Grid Fund for Zambia Signs First Contracts with Energy Service Providers. The Goal: Modern Energy for One Million Zambians
- Press Release: 100,000 Zambian households gain clean energy access through Beyond the Grid Fund
- Beyond the Grid Fund for Zambia Shortlisted for Ashden Award