More Believers Join Africa’s Off-Grid Energy Revolution

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Written by D.A. Barber

In the announcement, US Energy Secretary Ernest Moniz said: “With close to 600 million people without access to modern-day electricity, it is clear that centralized grid access is not a comprehensive solution for these countries in one of the world’s least urban continents.”

But Power Africa isn’t the only game in town for off-grid projects in rural Africa.

The European Commission announced in April results from the first call for proposals of a program for providing financing to bring electricity to rural areas with grants of €95 million awarded for 16 projects across Madagascar, Burkina Faso, Senegal, Cameroon, Liberia, Tanzania, Sierra Leone, Eritrea, Rwanda – an amount which will be translated to more than $200 million through co-financing support by applicants. Over the next 7 years the Commission will spend more than $2.7 billion for the program.

In May, Tanzania’s Rural Energy Agency announced a Lighting Rural Tanzania grant competition with $138,000 per proposal up for grabs to provide sustainable energy services. The competition’s main theme is “Promotion of Micro-Grids for electrification of remote off-grid rural villages and islands in Mainland Tanzania.”

Global Village Energy Partnership through a grant competition launched in June 2013 and funded by the Russian Federation through the World Bank and operated under the ESME Trust Fund, is funding expansion of eight off-grid lighting distributors in Kenya to foster local energy entrepreneurship in remote regions.

In April, Bloomberg Philanthropies announced $5 million in low-interest loans to Little Sun to bring solar energy to off-grid sub-Saharan Africa using low-cost solar lamps to replace kerosene lamps. The Little Sun project was officially launched in July 2012 and currently has distribution in Ethiopia, Uganda, Kenya, Burundi, Nigeria, Senegal, South Africa, and Zimbabwe.

“One of the most successful programs is Lighting Africa, a joint International Finance Corporation /World Bank initiative where over 13.5 million people have gained access to clean and safe lighting,” World Bank Africa region spokesman, Phil Hay told AFKInsider in an interview. “The Lighting Africa model is being replicated in Asia.”

The New Normal

Historically, energy programs have been funded by large development banks and government agencies favoring expensive power plants and large grid projects. While many of those projects have benefited industrial centers, in Africa they have neglected to bring needed energy to rural areas.

“While there are varying levels of progress in adding more energy to national grids across Africa, off-grid energy can play a significant role to power communities and economic activities that would otherwise not have access to electricity,” GE’s Obozuwa told AFKInsider.

One new model entrepreneurs large and small have embraced for some rural areas is a mobile technology payment approach which is becoming increasingly attractive due to the omnipresent use of cell phones that allows people to pay for their solar lighting services in small amounts without large up-front costs.

M-Kopa has been offering solar panels, batteries and lights at kiosks and shops around Kenya with payment through M-Pesa, Kenya’s mobile payment service.

In March, US-based giant SolarCity teemed with venture firms Vulcan Capital and Omidyar Network to invest $7 million into Off-Grid Electric, a Tanzania company providing solar lighting services using mobile payments.

Also in March, Powerway PV partnered with InnoVent Rental and Asset Management Solutions to launch a lease finance program for solar rooftop power in South Africa and later, all of Africa.

Meanwhile, non-governmental aid organizations and social investors that have been instrumental in supporting rural areas have jumped into Africa’s off-grid energy revolution.

Simon Gosling, director of UK-based EnergyNet, says there’s a huge role for these groups to support solar and other off-grid projects, “but they need to be implemented and managed and set up properly.”

“The problem which we have with solar from the perspective of these kind of things is sometimes you get some solar projects which are financed and built by charities in all these fine organizations, but sometimes the skill transfer is not there so they’re not maintained,” Gosling told AFKInsider in an interview. “So you’ve got hundreds of solar projects across Africa which are broken down for whatever reason.”

Africa never built the grid infrastructure for a traditional telephone network and now it won’t have to. Instead, the continent leapfrogged past the need for fixed telephone lines with the use of many millions of mobile phone systems. A similar leapfrog of technology is happening with off-grid energy in those rural areas that don’t need much power and are better suited to new off-grid technologies.

“Everybody’s come to recognize that in some ways, one of the most profound development achievements that is taking place in this time frame has been the introduction and popularization of cell phones. And that was done totally on a commercial basis,” says US African Development Foundation’s Berenbach, who believes the new and evolving off-grid technology is following the same path.

“We think that this is a time of great innovation and that ideally, 20 years from now, we’ll look back on this time the same way we now look back on the cell phone industry,” says Berenbach.