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The Green Climate Fund is enabling investment to bridge East Africa's energy gap with affordable, off-grid renewables
Energy access is a barometer of global equity. A reliable source of power is essential to allow people to live modern, networked lives - and for counties to generate economic growth.
It is easy for those accustomed to 24-hour power to forget about the 840 million people who live without electricity. Many of the “power poor” live in sub-Saharan Africa, numbering 573 million - more than one in two people.
The Green Climate Fund (GCF) is working with U.S. impact investor Acumen to help fill this energy gap using renewable power. For Rwandan resident Francine Mushambokazi, 55, access to electricity from solar panels on her home’s roof means she can now sleep easier.
“Before, the only way we could get light at night was with kerosene lamps and candles,” she said at her home in Kaserujeje village in the Nyamata region, about a two-hour drive south of the Rwandan capital of Kigali.
“I used to live in a state of worry. I was concerned that one of my children might go to bed forgetting to blow out a candle. This could have led to not just them being burnt, but everything in our home being burnt.”
Mushambokazi’s family adopted home solar power three years ago following an incident when one of her seven children nearly set their home on fire with a candle, as well as their constant calls to have lighting at night so they could study. But for her family, the main consideration was cost rather than safety.
A pay-as-you-go system for home solar panels offered the most affordable option to have constant lighting – as well as allowing the family to watch television and recharge their mobile phones without having to travel to the nearest township.
When added up, small inconveniences from a lack of power reduce the productivity of individuals, families and nations. Televisions provide information about the outside world, refrigerators cut down drastically on farmers’ spoiled produce, and solar water pumps greatly improve crop yields.
FINANCE TO EXPAND
To address energy deficiency and climate change concurrently, the GCF has provided $25 million to partner with Acumen in the KawiSafi Ventures Fund, an innovative incubator of private-sector investment in off-grid, mostly solar, renewable power in East Africa.
The Nairobi-based KawiSafi fund is already making inroads in Kenya and Rwanda. The potential to enhance electrification in East Africa is enormous. In Rwanda, about 70% of people are not connected to a mains electricity grid.
The key selling point of the KawiSafi Ventures Fund is its ability to capture the entrepreneurial energies of the private sector to provide low-emission and low-cost power to those without electricity. KawiSafi provides financial guarantees in the form of equity and debt capital to help support low-carbon energy companies expand their reach in East African markets.
One of these companies, UK-based BBOXX, credits KawiSafi’s investment from August 2016 as a crucial factor in the company’s ability to demonstrate that off-grid power is a viable commercial model in Africa.
It has electrified a total of 60,000 households across Rwanda. BBOXX has set itself up as a mainstay to assist the Rwandan government’s goal of providing all its citizens with electricity by 2024, with off-grid power forecast to provide nearly half of this target.
Laurent Van Houcke, one of BBOXX’s founders and its chief operations officer, said from his office in Kigali that the firm’s success is based on a historical convergence.
Lower off-grid technology costs, mobile phone-based payments, and sophisticated data-based monitoring systems are combining to provide detailed information about customer activities and needs – in many ways more advanced than developed countries.
“We are building a smart grid,” said Van Houcke. “Europe and the US are all trying to build their own smart grids, but it's going to take them a lot of time and a lot of investment to change existing infrastructure.”
In many parts of Rwanda, it is cheaper to install small-scale solar panels than hooking up to the main electricity grid, even if such a connection is available, he added.
Recent developments indicate the Rwandan government is serious about its intention to avoid following the precedent of developed nations in adopting carbon-dominant energy systems. In 2018, Rwanda was ranked fifth in the world for promoting renewable energy, largely due to off-grid power.
While Rwanda continues to support off-grid renewables to meet its citizens’ energy needs, the sheer scale of the climate change emergency requires a comprehensive effort globally to decarbonise energy.
Andrew Scott, an expert in energy access for poverty reduction at the Overseas Development Institute, said it is important to expand global electricity access for those who need it but developing countries must also move to decarbonise their growing energy systems at both the small and large scale.
Bloomberg New Energy Finance predicts that expanding populations, GDP growth and enhanced access to electricity in emerging countries, including in Africa, will more than double global electricity demand by 2050. That is why in addition to the KawiSafi Ventures Fund, the GCF will continue to support large-scale renewable infrastructure as well, including Egypt’s Benban solar park – scheduled to be the world’s largest array of solar power.
The accelerating need for climate action across the planet means that all options for renewables need to be deployed - ranging from the village-level solar panels helping light up rural people’s lives in Rwanda to huge solar farms powering the emerging economic giants of the future.