Country Brief: Sustainable Cooling for All in Ghana

Knowledge brief
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The need for sustainable cooling for all in Ghana

Cooling and cold chains are vital for healthcare and vaccines, for nutrition and agricultural value chains, for thermal comfort at home, work, school and in transportation, and for industrial processes and data centres. Affordable and sustainable cooling is essential for a thriving society and a healthy nation, sitting at the intersection of the Paris Climate Agreement, the Kigali Amendment of the Montreal Protocol and the UN Sustainable Development Goals (SDGs).

However, millions of people in Ghana lack access to affordable, reliable, sustainable cooling solutions, exposing them to severe health, wellbeing, and socioeconomic consequences. According to Sustainable Energy for All’s (SEforALL’s) Chilling Prospects analysis, there are 12.9 million rural and urban poor at high risk in Ghana due to a lack of access to cooling because they live below the international poverty line (less than USD 2.15 per day, as set by the World Bank) in substandard housing and do not have access to electricity. There are a further 16.6 million lower-middle-income people at medium risk due to a lack of access to cooling who also live without access to electricity and, although not impoverished, have limited financial resources to purchase cooling services. Given the significant power interruptions during 2024, commonly referred to as "dumsor", there could be more people at risk to extreme heat as fans, air-conditioning units and fridges, etc., cannot operate without power.  

For Ghanaians with reliable access to electricity, refrigeration and air-conditioning (RAC) usage is increasing due to rising incomes, temperatures and frequency of heatwaves, and further growth expected in this sector will impact Ghana’s energy systems and climate goals. The 2021 Ghana National Cooling Plan (NCP) projects that energy demand for the RAC sector will increase steadily from 7.04 TWh in 2015 to 20.9 TWh in 2050 with a corresponding greenhouse gas (GHG) emissions increase from 5.05 mT CO2eq in 2015 to 12.8 mT CO2eq in 2050 under a ‘business-as-usual’ (BAU)’ scenario. To align with national energy and climate strategies such as the Ghana Energy Transition and Investment Plan(ETIP), these emissions need to be abated.  Building on Ghana's leadership in promoting energy-efficient cooling and its commitment to the Global Cooling Pledge, now is an opportune time to reassess cooling needs to align with development, health and economic goals.  Cooling plays a critical role in supporting Ghana's climate objectives and ensuring a just and equitable energy transition.  

This country brief presents Ghana’s cooling needs, discusses challenges and opportunities in critical cooling sectors, reviews the high-level but key thematic solutions, and recommends priority areas for policy and market interventionsthat would advance sustainable cooling for all in Ghana. Details are available in the full report.  

Climate

Ghana [1] is in West Africa and 540 km of its coastline are along the Gulf of Guinea. Generally, the country has a warm tropical savanna climate though this varies across geographical zones according to its latitude (4° to 12°N), varying elevations and proximity to the ocean. Ghana’s mean annual temperature is 27.3°C and the mean minimum and maximum annual temperatures are 22.1°C and 32.5°C, respectively. The highest recorded temperature is 43.8°C in the Upper East region of Navrongo [2]. Northern Ghana typically experiences one rainy season from May to September, while southern Ghana has two rainy seasons, the major one from April to July and a minor one from September to November. Humidity levels are high throughout much of the year, particularly in coastal and forest regions, ranging from 70 to 100 percent, depending on the season and region.

Ghana is expected to face significant changes in its climate, with mean temperatures projected to rise by 1.0°C to 3.0°C by the middle of the century and 2.3°C to 5.3°C by the end of the century (dependent on four Representative Concentration Pathways (RCPs), i.e., RCP2.6, RCP4.5, RCP6.0, and RCP8.5) [3]. Northern and inland areas will be the hottest, and the frequency of hot days and nights in all areas is expected to increase by 18-59 percent by the middle of the century, accompanied by a decrease in the frequency of cooler periods. These changes underscore the need for climate adaptation strategies, particularly in northern regions.

The five northern regions (Upper West, Upper East, Northern, Brong Ahafo, Volta) have a high heat hazard classification, whilst the four coastal regions (Western, Ashanti, Eastern, Central, Greater) have a medium heat hazard classification. (See Figure 1.)  However, in 2024, the coastal zone of Western Africa (including parts of Ghana) experienced abnormal early season heat with a combination of high temperatures and relatively humid air that put people in extreme danger of heat cramps, heat exhaustion and heat stroke. [4], [5]

SEforALL-Ghana-Cooling-Report-CR-1-13.jpg
Figure 1: Map illustrating risk of extreme heat in Ghana

Population and Economy

Ghana has a population of approximately 34 million people, 59 percent of whom reside in urban areas (2023), including major cities like Accra and Kumasi. About 25.2 percent of the population live below the poverty line (2016), and 33 percent of the total population (8.8 million) reside in informal or slum housing (2020). [6] 

Ghana's economy is robust and diverse, with key sectors including agriculture (20.9 percent of GDP), industry (34.2 percent) and services (44.9 percent). [7] Ghana is Africa’s largest gold producer, and the economy has significant contributions from the mining and minerals sector, as well as growing oil and gas industries. The manufacturing and services sectors are also vital to the nation’s economic landscape.

Electricity Access, Power Generation and Carbon Emissions

Access to electricity has improved considerably; 95 percent of urban populations now have access, though the figure is lower for rural populations (72 percent). This means the average rate of electrification is 85.1 percent (as of 2022). 8  The country is aiming for universal electrification by 2030.

Ongoing power interruptions, known as "dumsor," resulting from maintenance issues, financial constraints and gas supply difficulties, have been a significant challenge in 2024. Load-shedding schedules have been implemented to manage these disruptions.

According to Ghana’s ETIP, in 2020, its power generation totalled 20.45 TWh, with a source mix of gas (56.68 percent), hydro (39.28 percent), oil (3.79 percent and solar (0.31 percent), resulting in carbon emissions of 6.23 Mt CO2e.

Looking ahead to 2050 under the ETIP net-zero pathway, Ghana plans to shift its energy mix dramatically towards renewables, with solar energy expected to account for 71.4 percent of generation capacity, complemented by nuclear (10.24 percent), hydro (13.87 percent) and onshore wind (3.86 percent). Gas use will drop to 0.72 percent, with a portion using carbon capture and storage (CCS). The total power generation required is expected to reach 148.97 TWh, but associated carbon emissions will decrease significantly to 0.4702 Mt CO2e, aligning with Ghana’s target of achieving net-zero emissions by 2060. The transition will involve a massive scale-up of solar PV, beginning in 2020 and accelerating from 2040, alongside the introduction of nuclear power by 2045.

SEforALL-Ghana-Cooling-Report-CR-1-17.jpg
Figure 2: Power generation mix and capacity from 2020-2050 under the ETIP Net Zero by 2060 pathway (Data source from the Ghana ETIP)

Cooling Access

Chilling Prospects analysis shows that Ghana has:  

  • 12.9 million people at high risk due to a lack of access to cooling. This includes 4.17 million rural poor who lack electricity and live in extreme poverty, often engaging in subsistence farming without access to intact cold chains, and 8.78 million urban poor with limited or no electricity access, living in thermally poor housing and facing intermittent electricity supplies.
  • 16.6 million people at medium risk of a lack of access to cooling, 51% of whom are women. The population at medium risk represents an increasingly affluent lower-middle-income class that is on the brink of purchasing the lowest-cost air conditioner or refrigerator on the market.  

The proportion of the population at high risk in Ghana is similar to that of neighbouring countries. In Togo and Burkina Faso 41 percent and 39 percent of the population are at high risk, respectively. The proportion of the population at high risk in neighbouring Cote d’Ivoire is slightly less at 32 percent.  

 

SEforALL-Ghana-Cooling-Report-CR-1-9.jpg

Figure 3: Sustainable Development Goals & Cooling in Ghana

 

 

Notes and references: 

[1] Climate Risk Profile: Ghana (2021): The World Bank Group

[2] Masters, Jeff (18 January 2018). "NOAA: Earth Had Its Third Warmest Year on Record in 2017". Wunderground. Archived from the original on 30 April 2018. Retrieved 27 October 2023.

[3] RCPs are defined by their total radiative forcing (cumulative measure of GHG emissions from all sources) pathway and level by 2100. For simplification, these scenarios are referred to as a low (RCP2.6); a medium (RCP4.5) and a high and business-as-usual (RCP8.5) emission scenarios in this profile.  More information about RCPs in this link.

[4] World Weather Attribution (2024). ‘Dangerous humid heat in southern West Africa about 4°C hotter due to climate change’

[5] ThinkHazard! (2020). Ghana – Extreme Heat

[6] World Bank Development Indicators (2024), Ghana.

[7] Ghana Statistical Service, Sectoral Share of GDP 2022. 

[8] IEA, IRENA, UNSD, World Bank, WHO. 2024. Tracking SDG 7: The Energy Progress Report. World Bank, Washington DC.  

 

Country

Ghana

Programme

Cooling for All

Catalyzing Renewable Energy Manufacturing in Ghana Roundtable

Event
Date
09:30 GMT
20 Nov 2024
End
04:00 GMT
20 Nov 2024
Location
Marriott Hotel, Liberation Road, Accra, Ghana


Background

Ghana is a vibrant renewable energy market with a strong momentum for growth. In 2023, the Government of Ghana and Sustainable Energy for All (SEforALL) developed the Ghana Energy Transition and Investment Plan (ETIP) which details a credible pathway for how Ghana can achieve net-zero energy-related carbon emissions by 2060, which is ten years faster than previously committed under the country’s Energy Transition Framework. It is anchored on four main technological solutions – renewables, low-carbon hydrogen, battery electric vehicles and clean cookstoves – prioritizing an orderly transition balancing critical socio-economic objectives.

The Government of Ghana is placing a strong emphasis in aligning the energy transition with countries’ industrialization and job creation objectives. It has taken steps to encourage building a local manufacturing ecosystem for energy transition solutions and complementary infrastructure to support local value addition.

The Ghana Automotive Development Policy, launched in 2020, aims to position Ghana as a competitive hub for the automotive industry in West Africa. The 2024 Budget introduced incentives for electric vehicles, including duty waivers and zero VAT on locally assembled cars. With significant lithium reserves and a new Green Minerals Policy, the government is promoting investments in domestic refining with forward linkages to battery manufacturing. Solar PV is projected to become the dominant energy source by 2060 in Ghana. Ongoing initiatives like the One District One Factory, Ghana Free Zones Authority, and Special Economic Zones can further strengthen local manufacturing ecosystems for solar PV, battery, and electric vehicles to meet domestic demand and increase exports.

Unlocking the domestic renewable energy manufacturing opportunity requires an approach that holistically addresses demand-, supply-side as well as ecosystem-related challenges. On the demand- side, manufacturers require off-take guarantees from domestic or export markets. Complementary policies and infrastructure, including regional trade frameworks and interconnections, can boost demand for products. Supply-side incentives such as fiscal incentives, concessional financing, and standard operating procedures (e.g. land and water access, time-bound corporate tax rebates) are crucial to strengthen the investment case and improve competitiveness. Finally, ecosystem-level interventions are also necessary focusing on education and training to address skills needs of an emerging sector, support local research and development, and strengthen firm-level capabilities.

Objective

The objectives of the Catalyzing Renewable Energy Manufacturing in Ghana Roundtable are:

  1. Convene stakeholders from Ghana’s renewable energy manufacturing ecosystem, including government, private sector, industry associations, financiers, and development partners;
  2. Showcase findings and insights from Africa REMI engagement in Ghana with stakeholders on
    expanding domestic manufacturing of solar PV, battery storage and electric mobility;
  3. Identify priority strategies and measures needed to address existing challenges across policy,
    investments and skills gaps; and
  4. Develop an action agenda to scale investments in renewable energy manufacturing through partnerships facilitated by SEforALL’s Africa Renewable Energy Manufacturing Initiative.
  5. Leverage the Roundtable to Inform the Ghana Manufacturing Policy and Investment Guide.
     

Draft agenda
 

TimeActivity
9.00
 
Registration and coffee networking
 
9.30 – 9.45 High-level opening remarks
9.45 – 10.00Introduction to Africa Renewable Energy Manufacturing Initiative and Roundtable
10.00 – 11.30Industrial policy mix for accelerating renewable energy manufacturing
Key questions:
• What are some of the key policy measures introduced by government to attract investments in local manufacturing of energy transition technologies?
• What are the barriers facing manufacturers to meet domestic and export demands of solar PV, batteries and electric vehicles?
• What further steps can the government take to support local value addition? How can Africa REMI support governments in these measures?
• How can industries leverage existing government programmes, including industrial parks, to invest in domestic manufacturing?
• How can policy coordination be further improved to strengthen value chain development, from critical minerals to manufacturing?
11.30 – 13.00Mobilizing public and private financing for domestic renewable energy manufacturing
Key questions:
• What are the gaps in the investment framework facing local enterprises?
• How can public financing, including bilateral/multilateral, be effectively
designed to support local manufacturing sector?
• How can support for ecosystem-level interventions, including skills
development, be addressed?
• How can Africa REMI, in partnership with other development programmes,
address financing gaps for the local renewable energy manufacturing sector? 
 13.00 – 14.00Lunch
14.00 – 15.30Strengthening local industry ecosystem
Key questions:
• What are the key barriers industry is facing to scale up domestic manufacturing capabilities for renewable energy technologies?
• How can public and private sector partnerships be structured to catalyze investment in local manufacturing?
• What can be done to increase competitiveness of the green manufacturing?
• How can the industry’s skills need be addressed most effectively though
public-private partnership?
15.30 – 16.00Closing remarks and next steps


 

Country

Ghana

Ghana launches USD 550 billion Energy Transition and Investment Plan for achieving net-zero emissions, creating 400,000 jobs by 2060

News

President Nana Akufo-Addo unveils country’s roadmap for green growth and decarbonizing key economic sectors 


 

His Excellency Nana Akufo-Addo, President of the Republic of Ghana, launched the country’s new Energy Transition and Investment Plan today during a Global Africa Business Initiative event in New York. 

The plan marks Ghana’s commitment to fighting climate change and fostering economic development in tandem. It details a credible pathway for how Ghana can achieve net-zero energy-related carbon emissions by 2060 through the deployment of low-carbon solutions across key sectors of its economy, including oil and gas, industry, transport, cooking, and power. 

Ghana’s government intends to use the plan as its main tool to engage the international community and investors for support with its energy transition. All measures suggested in the plan represent a USD 550 billion opportunity for the international community to invest in sustainable development in Ghana. If the plan is achieved in full, it would generate 400,000 net jobs within Ghana’s economy. 

The country's existing Energy Transition Framework previously set a target of net zero by 2070, but this new plan shows Ghana has increased its ambition and is targeting net zero by 2060. 

Various sectoral changes and technologies are proposed in the plan. Four main decarbonization technologies – renewables, low-carbon hydrogen, battery electric vehicles and clean cookstoves – would cover over 90 percent of the targeted abatement by 2060. 

Without pursuing the plan, under a business-as-usual scenario, Ghana’s emissions are expected to rise from 28 Mt CO2e in 2021 to over 140 Mt in 2050, with the bulk of emissions growth coming from transport, driven by population growth, GDP per capita growth, and vehicle ownership. 

By implementing this plan, Ghana and its partners can instead bring the country’s energy-sector-related carbon emissions to net zero, while demonstrating that action against climate change does not need to come at the expense of economic development. 

The Energy Transition and Investment Plan was developed by the Government of Ghana with technical support from Sustainable Energy for All (SEforALL). 

 

“This pioneering Energy Transition and Investment Plan maps out Ghana’s journey to achieve net-zero emissions by 2060 based on the latest data and evidence, ensuring that as our economy thrives, it does so in harmony with the environment. This plan is a testament to our dedication to fostering green industries, nurturing the evolution of cutting-edge low-carbon technologies, and propelling our nation towards a sustainable industrial revolution while giving equal growth opportunities to men and women.” 


-His Excellency Nana Akufo-Addo, President of the Republic of Ghana 

 

“Ghana’s commitment to a just and equitable energy transition has translated to an ambitious plan that builds a case for low-carbon and energy-efficient solutions across Ghana’s entire energy system. These solutions present a tremendous opportunity for partners and investors from around the world to contribute to climate action and sustainable development in Ghana.” 


-Damilola Ogunbiyi, CEO and Special Representative of the UN Secretary-General for Sustainable Energy for All, and Co-Chair of UN-Energy

 

Country

Ghana

Ghana energy transition plan gains momentum as consultations held with President Akufo-Addo, ministers, local stakeholders

News

Consultations on Ghana’s much-anticipated energy transition and investment plan took place in Accra last week, as diverse stakeholders from government, the private sector, youth and civil-society organizations offered feedback on the plan ahead of its launch.

This energy transition and investment plan is expected to serve as the government’s main roadmap for achieving universal energy access and net-zero carbon emissions, as expressed under the country’s current Energy Transition Framework and Nationally Determined Contributions, while fostering economic growth and protecting jobs.

Ghana has set goals to diversify its energy portfolio, increase the role of renewables and reduce energy intensity. All of these will need to be done in parallel and the upcoming energy transition and investment plan provides a detailed view of what is needed in terms of technical assistance and investment across key sectors. 

By mapping out these needs, the plan will serve as the main tool for the government to engage the international community and investors for support. The Government of Ghana is developing the plan with technical support from Sustainable Energy for All (SEforALL).

Ghanaian President Akufo-Addo and Damilola Ogunbiyi, CEO and Special Representative of the UN Secretary-General for Sustainable Energy for All, and Co-Chair of UN-Energy, met in Accra to discuss the plan's findings and recommendations, ensuring it is backed from the highest levels of government.  

“Ghana is committed to a clean, equitable energy transition that harnesses the full potential of renewable sources and energy efficiency. However, ambition alone will not transform our energy systems, which is why we embarked on creating an energy transition and investment plan that details what is needed to reach our goals. I look forward to working with international partners to realize the many opportunities presented in this plan.”

 

His Excellency Nana Akufo-Addo, President of the Republic of Ghana 

Ogunbiyi also participated in an inter-ministerial committee meeting, where she briefed ministers on how the plan is designed to support the work of various ministries, including environment, transportation, industry, and others.

“It was a pleasure to meet with President Akufo-Addo, government ministers, local community groups and youth this week and hear first-hand how committed they are to a just and equitable energy transition. Their commitment has translated to an ambitious energy transition and investment plan that builds a case for changes across Ghana’s entire energy system. These changes present a tremendous opportunity for partners and investors from around the world to contribute to climate action and sustainable development in Ghana.”

 

Damilola Ogunbiyi, CEO and Special Representative of the UN Secretary-General for Sustainable Energy for All, and Co-Chair of UN-Energy

At additional stakeholder engagement events, the private sector, civil-society organizations, youth and other advocacy groups were given the opportunity to weigh in on what they would like to see the plan prioritize. Among the points raised was the need for equitable access to the social and economic opportunities generated by the plan, such as jobs, particularly for women and youth.

Feedback from all consultations is guiding the plan’s finalization, with its launch expected to happen this fall. 

A similar plan was launched in Nigeria last year and a dedicated Energy Transition Office has been established to drive the plan’s activation, having already secured USD 3.6 billion for its underlying projects.

Ghana Cooling for All workshop builds momentum for national action on sustainable cooling and energy efficiency

News

Last week in Accra, Ghana, SEforALL hosted the Ghana Cooling for All Workshop, which aimed to identify gaps in Ghana's sustainable cooling policy implementation framework and pathways to achieving sustainable cooling for all.  

Ghana is a high-impact country in Sustainable Energy for All's Chilling Prospects research series because it has approximately 8.7 million people in poor rural and urban settings that lack access to sustainable cooling solutions. Ghana also remains vulnerable to heat stressors caused by climate change, with high temperatures ranging from an average of 31 to 40 degrees Celsius, and at the same time has faced challenges adapting to the threat of extreme heat due to several barriers, including a lack of access to sustainable cooling solutions. 

The workshop was held over three days and had over 90 participants, including youth, students, development partners, national associations, financial providers, and importers. 

The Cooling for All Workshop in Ghana had three key outcomes:  

  • Increasing awareness of sustainable cooling among key stakeholders in Ghana 

  • Recognizing the need for implementation finance to unlock additional private sector finance for passive and active cooling 

  • Identifying partnership opportunities to increase the capacity of stakeholders on cooling, especially passive cooling 

These outcomes provide an opportunity for SEforALL and partners like C40 Cities to support the Government of Ghana with capacity building needs and data-driven policy, especially for passive cooling in buildings and cities, as it implements its National Cooling Action Plan and works to deliver sustainable cooling for all.   

SEforALL is also continuing to support the Government of Ghana's cooling and energy efficiency ambitions by convening the Mission Efficiency Community of Practice, which fosters coordination and cooperation among cooling and energy efficiency stakeholders, including connecting project developers with finance. 

Day 1 Recap 

On the first day, the Ghana Energy Commission’s Director for Renewable Energy, Energy Efficiency and Climate Change, Mr. Kofi Agyarko, welcomed participants and set the tone for the workshop by highlighting that cooling was no longer a luxury, and that collaboration and local solutions were necessary to deliver Cooling for All in Ghana. He stressed that such gatherings present an opportunity to chart a more concrete path towards implementing cooling solutions, particularly those that prevent food losses and save vaccines.  

Peace Kaliisa of the Rwandan Ministry of Infrastructure followed, noting the success of the landmark Centre for Sustainable Cooling and Cold Chain at the University of Rwanda and that additional financing was needed for capacity building. Remarks by Dr. Fenwicks Musonye of the Kenya Energy & Petroleum Regulatory Authority concluded the opening, emphasizing the need to increase awareness of energy efficiency benefits. 

The remainder of the day included deep-dive presentations on cooling access gaps in Ghana and the status of the National Cooling Action Plan. SEforALL led another session that delved into passive cooling, especially in building design, led by Energy Efficiency Specialist Elizabeth Wangeci Chege.  

The final session of the day emphasized the need to promote energy-efficient cooling devices in off-grid and on-grid, a discussion which also provided industry associations with the ability to dialogue with regulators on the current Minimum Energy Performance Standards (MEPS) regime and the need to shift to High Energy Performance Standards (HEPS). 

Day 2 Recap 

On the second day, SEforALL hosted a consultation on the Global Cooling Pledge for COP 28, with stakeholders from Ghana, Kenya, and Rwanda emphasizing the need for further capacity building and implementation finance. In a subsequent session on innovation, representatives from Rwanda and Kenya shared their feedback on increasing innovation in cooling, including the use of passive designs to create shade and decrease heat in their regions. They also shared how policies and MEPS have lagged behind due to a lack of focus on active cooling, providing an opportunity for Ghana to understand their experiences.  

The National Refrigeration and Air Conditioning Workshop Owners Association and Accra Centre of Excellence advocated for enhanced access to the latest innovation in air conditioners in the Ghanaian market, and SEforALL used this platform to explore opportunities for manufacturing in Africa to reduce the cost of air conditioners and other sustainable cooling technologies. 

The workshop also showcased business models and financial opportunities for sustainable cooling in Ghana. This included Akofresh, a startup company that provides off-grid cooling solutions powered by solar systems, solving the problem of food waste by using cold rooms for storage in Akomadan. The company is targeting other countries in Sub-Saharan Africa to replicate the success seen in Ghana.  

Finance was raised as a key issue across all sessions, and the workshop included a session with the Private Financing Advisory Network Country (PFAN) Coordinator and the Ghana Sustainable Use of Natural Resources and Energy Finance (SUNREF) Coordinator who discussed challenges and available support for cooling projects. The SUNREF Coordinator noted that USD 35 million is available for renewable and energy efficiency projects, but that no project has been presented on cooling yet, with high interest rates and foreign exchange fluctuations as key barriers. PFAN Country Coordinator commented on the lack of thorough business and market analysis, necessary tools for investors to understand growth potential. 

Day 3 Recap 

The workshop concluded on its 3rd day by providing training to stakeholders on sustainable cooling in buildings and cities. SEforALL was joined by the Ghana Green Building Council and C40 Cities to deliver the training. Stakeholders were drawn to green roofing, which is barely seen in building construction in Ghana, and the benefits of integrating passive cooling with active cooling to lower overall energy needs.  

The day also included the launch of the Sustainable Energy Policy Hub, a virtual tool supporting policy decision-making processes in the areas of electricity access, clean cooking, energy efficiency and sustainable cooling, with participants using the tool to develop an analysis of Ghana’s policy and regulatory framework using the Hub’s decision trees on sustainable cooling and energy efficiency. 

 

Country

Ghana

Programme

Cooling for All

Growing our influence and impact – SEforALL’s highlights from 2022 

 

Energy Compacts 

In 2022, we also continued to promote and secure Energy Compacts along with our UN-Energy partners. Launched at the UN High-level Dialogue on Energy in 2021, this platform has led to nearly 200 approved commitments towards SDG7 and climate goals. Many of these commitments are already being acted upon, with USD 46 billion in investment having already been generated, 88 GW of renewable energy capacity installed, and 2,450 GWh of energy saved through energy efficiency measures, according to the first Energy Compact Progress Report prepared by UN-Energy.   

Several compacts continue to attract new signatories, including those related to No New Coal, Green Hydrogen, Powering Healthcare, and 24/7 Carbon-Free Energy, proving the value of Energy Compacts in mobilizing action. 

Stronger policy and planning 

We help countries establish policies, regulations and plans that enable sustainable energy development. In 2022, we worked directly with countries and stakeholders in their energy sectors on bespoke plans that will attract investment and technical assistance.  

Energy Transition Plans 

These data-driven national plans are created to identify viable pathways for countries to end energy poverty and achieve net-zero emissions while marking opportunities for stakeholders to support these efforts. Nigeria was the first country to develop such a plan in 2021, with the support of the COP26 Energy Transition Council and SEforALL. 

Although it was first unveiled at COP26, the government launched the Nigeria Energy Transition Plan in August this year. At the launch, the World Bank announced it had committed USD 1.5 billion towards the plan for renewable energy, power sector reforms, clean cooking, and additional opportunities.  

We are now working closely with the Office of the Vice-President in Nigeria to help attract the plan’s targeted finance and assistance. Our work is being carried out through our new office in Abuja by a specific team dedicated to supporting the government. 

Ghana has already partnered with us to develop their own Energy Transition Plan in 2023, and we will pursue similar partnerships with Barbados and additional countries as we grow this important body of work with the support of Bloomberg Philanthropies. 

Ghana ETP launch
Ghana ETP launch

Integrated Energy Plans  

We are setting the standard for what a best-in-class integrated energy plan should be and working with partners to make sure countries harness this important framework. 

The plans use geospatial data and tools to identify the efficient integration of on- and off-grid solutions for energy supply (i.e., grid extension, mini-grids, and standalone solutions like solar home systems), while also considering demand-side factors like affordability. Together, this provides vital market intelligence to support investment. 

In 2022, we collaborated with both Nigeria and Malawi to develop their integrated energy plans and launched online platforms for both so country stakeholders can easily access data for their decision-making. 

Research, analysis and tools 

A wide body of research and analysis underpins both our country engagement and global advocacy. In 2022, we developed new lines of research in response to country needs, such as a Powering Healthcare Nigeria Market Assessment and Roadmap, and practical tools to support policy-making, such as our new online Knowledge Hub

We continued to provide thought leadership in the area of sustainable cooling thanks support from the Swiss Agency for Development and Cooperation and the Clean Cooling Collaborative.  We again published our Chilling Prospects research, this time with a wider set of case studies, sectoral cooling data, and analysis of the enabling environment for cooling. And our cooling needs assessment framework has been adopted by the Cool Coalition for its global methodology for National Cooling Action Plans, which several countries have already implemented. 

Faster Results 

The world needs to scale and speed up energy access and transition efforts. Finance really is the lynchpin of progress, which is why we established a results-based finance facility two years ago to catalyse energy projects in Sub-Saharan Africa. Ensuring the fast delivery of electrification projects for critical services like healthcare is also a priority for us, especially given the recent COVID-19 pandemic. 

Universal Energy Facility (UEF) 

The UEF took a dramatic leap forward in 2022 on multiple fronts, thanks in large part to transformative new funding from the GEAPP and the IKEA Foundation. 

A major highlight was the first set of electricity connections being established by mini-grids in Madagascar with projects financed by the facility. Thus far, the facility has paid out results-based grants for 654 electricity connections under its wave 1 mini-grids programme, with thousands more connections anticipating for 2023 across Benin, Madagascar and Sierra Leone. 

Meanwhile, we launched a second wave of mini-grid finance this year for companies operating in Madagascar and Sierra Leone, and a new UEF-supported country, the Democratic Republic of the Congo.  

Nigeria also became a UEF-supported country with the launch of a Standalone Solar for Productive Use programme, which is designed to scale up electricity access to households, and small and medium enterprises (SMEs), while displacing polluting diesel generators. There has been remarkable interest in this programme from energy developers, who will break ground on their projects in early 2023. 

Mini-grid
Mini-grids enable fast and sustainable development in rural areas

Powering Sierra Leone’s Hospitals  

COVID-19 underscored how essential it is for health services to have reliable electricity, which is why our growing portfolio of Powering Healthcare work aims to accelerate electricity connections for health facilities in Africa.  

Following a detailed energy needs assessment in Sierra Leone, we are now managing the electrification of six key hospitals in Sierra Leone with support from the UK’s Foreign, Commonwealth, and Development Office, directly impacting health service delivery and eliminating fuel consumption by adding more than 0.5MWp of installed solar PV capacity to the health sector. 

 

Looking ahead to 2023 

Having achieved the above in 2022, we must now look to expand on both our longstanding bodies of work and nascent initiatives in the year to come. 

We will continue to focus on advocacy and diplomacy to build global ambition and political support for SDG7 and energy transition, notably through engagement in major global fora like the G20 in India and COP28. 

At the same time, we will continue to directly support priority countries, particularly by helping them create stronger policy and regulations with Integrated Energy Plans and Energy Transition Plans that will mobilize finance, as well as directing funding to energy projects through the UEF, which we hope to grow into a USD 100 million facility by the end of 2023.  

We will also support the growth of the Africa Carbon Markets Initiative to attract energy and climate finance to Africa, and we plan to work with countries to grow their domestic renewable energy manufacturing, helping them reap the economic benefits of localized industries. 

Importantly, we will continue to elevate areas of the energy transition that often get overlooked, including ensuring the transition supports gender and intergenerational equity. Along these lines, expanding our efforts to offer training opportunities to women and youth and ensuring their engagement in energy and climate negotiations will be a key priority in 2023. 

Once again, thank you to all our partners and funders, whose support is critical to our work. We value your commitment to ending energy poverty and fighting climate change, and we look forward to another busy and impactful year of collaboration with you in 2023. 

 

Mission Efficiency convenes Community of Practice in Ghana

News

By 2019, the African continent was the least energy efficient region in the world, and by 2021, all regions in the world except Africa and Eurasia saw an increase in energy efficiency investments. 

Mission Efficiency is creating a platform that will foster coordination and cooperation among energy efficiency stakeholders in Ghana to help change this trend. The Mission Efficiency Community of Practice in Ghana is an energy efficiency ecosystem supporting progress on policy, technology, finance, and services solutions that will drive a just and equitable energy transition.  

The Mission Efficiency Community of Practice held its very first Ghana meetup on 30 November 2022. It brought together various partners from the finance and energy efficiency communities, notably the Energy Commission, the SUNREF Programme, Ghana Standards Authority, United Nations Development Programme, GIZ, PFAN, IFC, Ghana National Cleaner Production Center, the Customs Unit of the Ghana Revenue Authority Association of Ghana Industries Energy Service Centre, among others. 

Ghana has achieved great progress in energy efficiency appliances, but there is a need for improvement in other sectors, especially buildings and transport. Aligned with the effort to drive energy efficiency improvements across sectors, Ghana’s Energy Commission is promoting Drive Electric Initiative and collaborating with Mission Efficiency. However, the Energy Commission stressed the need for support from donors in ensuring enforcement and awareness creation to encourage electric vehicle drive in the energy transition. 

The discussions were varied and touched on critical topics across sectors, such as green building certifications, energy efficiency in industry and harnessing ESCO potential. Similarly, participants shared various challenges for energy efficiency such as certification prices, need for testing facilities at a sub-regional level, especially for the additional 17 appliances that the Energy Commission plans to regulate, and lack of data to raise awareness on energy efficiency and attract investments.  

Participants engaged in a roundtable to find short, medium and long-term strategies for advancing energy efficiency in transport, buildings, appliances and industry. This discussion provided valuable inputs to all stakeholders on the direction and drive needed for improving energy efficiency in Ghana, and next steps in various sectors. 

Out of the meeting, SEforALL was able to connect Solar Taxi, Ghana’s first local EV company, and the Private Financing Advisory Network, as well as getting SUNREF support for the financing industries audited under the Energy Efficiency in Industries in Ghana project funded by Green Climate Fund. This provides opportunity for various industries to get funded for pursuing greener production.  

The Mission Efficiency Community of Practice aims to build on these initial conversations and linkages while also promoting innovation going forward. This will ensure increasing progress in Ghana achieving SDG7.3 on energy efficiency. 

 

Country

Ghana

Designing effective end-user subsidies to close the electricity affordability gap

News

Electricity access remains a significant global challenge, with only incremental progress made to date towards achieving Sustainable Development Goal 7 (SDG7) – access to affordable, reliable, sustainable and modern energy for all by 2030.

The affordability of electricity plays an important role in determining whether households gain and maintain access to electricity. Closing electricity access gaps therefore requires special attention to supporting affordability.

New research published by Sustainable Energy for All in partnership with Climate Policy Initiative examines this issue in-depth, particularly how subsidies can support affordability. The Role of End-User Subsidies in Closing the Affordability Gap assesses three end-user subsidy programmes – in Ghana, Uganda and Togo – and builds on existing literature regarding the development and implementation of end-user subsidies for solar home systems.

Based on analysis of the three subsidy programmes, the brief outlines a set of attributes key to end-user subsidy design – financing structure; delivery modality and implementers; technology targeted; market targeting mechanism; verification system; and target market – and identifies the various methods available to build each component.

Ghana

The Ghana Energy Development Access Project launched the Improving Rural Energy Access through Solar Home Systems programme in 2010. The programme is widely seen as a success – likely the result of accurately calculating the subsidy thresholds for different regions in the country and targeting those populations that needed the subsidy the most. The programme also demonstrates the benefits of working with reliable third parties; the inclusion of both the Association of Ghana Solar Industries and rural banks were programme strengths.

Uganda

The Energy for Rural Transformation (ERT) Subsidy programme has been implemented jointly by the Ugandan Government and the World Bank since 2002. The programme has suffered from structural challenges, although the lack of transparency around it has made specific identification of these challenges difficult. Given the information publicly available on the programme, it appears likely the programme’s challenges may have been due to a more complicated subsidy value than the Ghana programme and more stringent verification requirements that led to delayed payments. Furthermore, high prices and private companies’ capacity limitations to deliver high-quality products of high quality led to consumer distrust.

Togo

The Togo government launched the CIZO project to enact enabling environment supply-side and demand-side interventions. Various multilateral institutions such as the European Union and African Development Bank have provided financing for the initiative (EUR 10 million and EUR 12 million, respectively). Implementation of the programme has been slow despite the use of digital technology to verify installations and beneficiaries and provide the monthly subsidy payments. The programme is relatively new so drawing conclusions at this stage is challenging, but early indications are that accurately calculating the affordability gap for SHS products could be a key factor in determining the correct subsidy threshold for increased uptake.

Key takeaways from existing subsidy programmes

The assessment of these programmes suggests effectively employing the menu of design attributes available to policymakers is critical to effectively target and verify beneficiaries while also determining the right threshold of the subsidy being provided.

The brief highlights crucial ongoing data and information issues that must be addressed at the national level to effectively design targeted, efficient subsidy programmes. Most notably, the difference between a successful and unsuccessful end-user subsidy programme is heavily influenced by consumer affordability estimates. This is how entities would determine which markets to enter, what would be the required concessionality to crowd in investment for an initiative from the private sector, and which subsidy thresholds for a technology would lead to increased uptake.

Therefore, the brief recommends that researchers advance a modified energy burden threshold for measuring the affordability gap in developing and emerging economies. An energy burden threshold is the percentage of household income spent on energy costs. Spending on energy beyond the defined percentage is called an energy burden. This threshold is used to determine affordability gap calculations at the moment.

This brief argues that the energy burden, which is defined by certain researchers as 6 percent or higher, is probably not accurate in a developing country context and needs revision based on market conditions and the type of technology.  

Policymakers should also invest resources to improve data on several fronts: demographic data to more accurately target subsidies, technology, and access tier data to assess the potential for phases interventions of subsidies, and household consumption data to minimize potential for market distortion.

The Role of End-User Subsidies in Closing the Affordability Gap

Knowledge brief
affordability

Designing effective, efficient and supportive end-user subsidy programmes is a complicated process that relies on significant data and information, including an accurate understanding of the affordability gap in the targeted country or region. This brief builds on the existing literature regarding the development and implementation of end-user subsidies for SHSs. Its purpose is to: a) survey efforts to develop and advance a methodology to assess the affordability gap and the implied level of end-user subsidy required by the market, b) utilize case studies to map key attributes of subsidy design and demonstrate what these attributes look like in practice, and c) identify key data points required to accurately determine subsidy thresholds and targeting mechanisms to improve the success of subsidy programmes moving forward.

To demonstrate how the different attributes of subsidy design function for SHSs in practice, this brief considers three case studies: one from a relatively mature electricity market (Ghana) and two from emerging electricity markets (Uganda and Togo). The end-user subsidy programmes implemented in each country were also assessed on whether they directly addressed the affordability gap challenge in rural regions outside of potential grid connections.

This report is part of the series:  Energizing Finance

Energizing Finance: Taking the Pulse 2021 - Ghana, Mozambique and Vietnam

  • Achieving universal Tier 1 electricity and Tier 4 clean cooking access will cost USD 38-48 billion across Ghana, Mozambique and Vietnam; a more incremental pathway of Tier 1 electricity and Tier 2 / Tier 3 clean cooking access will be considerably less costly at USD 2.1 billion
  • About USD 1.1 billion will be needed in affordability gap financing across Ghana, Mozambique and Vietnam for Tier 1 electricity and Tier 2 / Tier 3 cooking access.
  • Mini-grids will make a relatively small contribution to universal Tier 1 electricity access in the Business-as-Usual scenario.
  • Standalone solar solutions will deliver access to all transition households not served by the grid or mini-grids.

About the report

This report updates and extends the biennial Taking the Pulse report, first published in 2017 by Sustainable Energy for All (SEforALL) as part of its Energizing Finance research series.

It seeks to (i) estimate the total volume and type of finance needed by decentralized energy (clean cooking and electricity) enterprises, (ii) estimate unmet finance needs (the affordability gap) for end-use customers, (iii) provide high-level recommendations on the use of funding to unlock private sector capacity and deliver energy access solutions at scale, and (iv) suggest enabling policies and regulations for governments.

Like previous editions, Energizing Finance: Taking the Pulse 2021 relies heavily on an empirically based model to estimate future finance needed in three countries: this year, Ghana, Mozambique and Vietnam, which represent three distinct levels of electricity and clean cooking access and market maturity. The report uses the World Bank’s widely recognized Multi-Tier Framework (MTF) to classify different levels of electricity and clean cooking access for households. For electricity, it measures the gap to achieving universal Tier 1 access; for clean cooking, it estimates the deficit to both universal Tier 2 / Tier 3 levels through industrially manufactured improved cookstoves (ICS) (which rely on traditional biofuels but are cleaner and more efficient than artisanal cookstoves) and Tier 4 modern energy cooking services (MECS) (through liquefied petroleum gas (LPG), ethanol and electricity).

Key findings

Achieving universal Tier 1 electricity and Tier 4 clean cooking access will cost USD 38-48 billion across Ghana, Mozambique and Vietnam. A more incremental pathway of Tier 1 electricity and Tier 2 / Tier 3 clean cooking access will be considerably less costly at USD 2.1 billion. Achieving universal Tier 4 cooking access across all three countries will cost about USD 37-47 billion, depending on the technology used. Achieving universal Tier 1 electricity access by 2030 in Ghana and Mozambique will require about USD 1.1 billion in additional capital.

About USD 1.1 billion will be needed in affordability gap financing across Ghana, Mozambique and Vietnam. Unsurprisingly, given its high poverty levels (46 percent compared with 23 percent in Ghana and 7 percent in Vietnam) (World Bank)), Mozambique will account for the overwhelming share (82 percent) of the need across the three focus countries, mostly to drive standalone solar uptake in poor, rural households. Most of Ghana’s affordability gap financing (92 percent) will be needed in the service of household ICS purchases, with only USD 12 million needed to support standalone solar purchases. Vietnam will require about USD 40 million to support household purchases of ICS solutions.

Mini-grids will make a relatively small contribution to universal Tier 1 electricity access in the Business-as-Usual scenario. They will provide electricity to up to 3 percent of the population in Mozambique and only about 1 percent in Ghana by 2030. High-connection costs (relative to SHSs) combined with a lack of policy and regulatory clarity around licensing, land acquisition, concessions, tariffs, and subsidy schemes, limit private participation in mini-grids.

Standalone solar solutions will deliver access to all transition households not served by the grid or mini-grids. Achieving this will require a substantial increase in public and private financing above current levels, especially in Mozambique.

Recommendations

COUNTRY MAIN RECOMMENDATIONS
Ghana

Electricity

  • Explore RBF programmes to incentivize the private sector to reach lowest income households in harder-to-reach areas while addressing affordability.

Clean cooking

  • Execute on LPG strategy and incorporate into national clean cooking strategy a pathway for “clean” fuels beyond LPG, support ICS sector with clear guidelines.
  • Provide demand-side subsidies (e.g., voucher programmes) to improve customer affordability – potentially with carbon finance proceeds.
  • Support PAYG model expansion for clean fuels and consumer financing.
Mozambique
  • Explore demand-side subsidies programmes to address the USD 930
  • million affordability gap in electricity and clean cooking.
  • Expand supply-side financing, including catalytic grants to encourage market entrance and RBF to incentivize expansion in last-mile areas.
  • Remove import duty and VAT for SHS products to improve affordability.

Vietnam

  • Build on prior results-based mechanisms to encourage the private sector to expand in harder-to-reach areas and to serve ethnic minorities.
  • Explore targeted demand-side subsidies programme for households unable to afford ICS.
  • Expand PAYG access and consumer financing options to improve customer affordability.
Cross-cutting
  • Expand local debt and concessional finance to the private sector – invest directly and in partnership with local financial institutions.
  • Expand access to carbon credits through government carbon schemes that capture carbon proceeds and apply them to expand “clean” fuels.
  • Develop coordinated electricity access, cooking access and climate change strategies.
  • Explore financial instruments and policies specifically targeting women that recognize the additional (and often unique) legal and cultural barriers women face in accessing finance; provide training and capacity-building support to incorporate gender lens in programme planning and design.

 

This report is part of the series:  Energizing Finance