The Universal Energy Facility (UEF) – a multi-donor results-based financing facility managed by Sustainable Energy for All (SEforALL) – is signing several grant agreements with mini-grid companies in the Democratic Republic of the Congo (DRC), Madagascar and Sierra Leone in the coming weeks. The grantees will receive financial support to build solar mini-grids in communities without access to clean energy and where other polluting energy sources, such as diesel and petrol generators, charcoal and firewood, are common. 

“Accelerating access to reliable, sustainable and affordable electricity to those most in need is the central focus of UEF and its partners,” said Anita Otubu, Senior Director of the UEF. “This is a big step and the first of many we need to take to continue improving people’s lives in Africa. Access to clean energy is a life-changing step that leads to economic growth, empowering women, reducing C02 emissions, and creating jobs - among other benefits.” 

The USD 10.4 million of additional funding is for 17,628 connections distributed among six companies, benefiting an estimated 88,000 people in 29 communities in the three countries. During the next 12 months, the beneficiaries will construct and commission 29 mini-grids with an estimated 3.7MW of renewable energy capacity installed, leading to an avoidance of approximately 1,800 tonnes of CO2 equivalent emissions per year. 

“Once again, the UEF proves to be a rapid, cost-effective solution for accelerating the deployment of clean energy grants,” said Edward Borgstein, Managing Director at the Global Energy Alliance for People and Planet (GEAPP), a UEF donor. “As a partner, having access to a robust and efficient mechanism to get funds to work is crucial as we seek to accelerate electricity access in some of the world’s most energy-poor locations.” 

Democratic Republic of the Congo 

Despite having an immense and varied energy potential from renewable resources including hydroelectric, biomass, solar and geothermal power; only 49 per cent of its 96 million people have access to electricity, most of them in urban centres, according to the World Bank. As a solution, and to support the government’s efforts to significantly increase power connections, the UEF launched its mini-grid programme in the DRC in October 2022.  

The UEF recently signed the first grant agreement for USD 3.8 million with Electrilac S.A.S, a subsidiary of Green Enesys, with the goal of providing 6,500 new electricity connections and installing 2.5MW of renewable energy capacity. These connections are expected to positively impact over 30,000 people, providing them with new or improved access to electricity. 

“The financial support from the UEF and partners is crucial to promoting a robust and dynamic energy market in the DRC. This will bring sustainable and reliable energy to underserved communities, delivering a catalytic impact in creating more and better jobs, new business opportunities, and in contributing to the sustainable socio-economic development of the region,” said Ranjith Rao, Chief Business Development Officer, Green Enesys “We see this type of support as a win-win situation for our business, but also for the government and the people of the DRC.” 

Madagascar 

According to the World Bank, only 73 percent of the Malagasy population has access to electricity in urban areas and only 11 percent in rural areas.  

To support electrification efforts, the UEF opened its first funding window in 2020, signing grant agreements with two developers for nine mini-grid sites, resulting in 2,496 expected electricity connections. In its second wave of funding, the UEF is signing grant agreements with WeLight, ANKA, Autarsys and Jiro Taratra/Africa GreenTec, totaling USD 5.9 million for an additional 21 mini-grids. This will result in 9,935 new electricity connections and 0.99MW of renewable energy capacity installed. These connections are expected to impact nearly 50,000 people in regions with strong economic growth potential and in sectors such as agriculture and trade by providing new or improved access to electricity.  

"The Government of Madagascar is fully committed to identifying and implementing appropriate strategies to accelerate access to electricity for communities, particularly in rural areas, using appropriate and effective mechanisms,” said Mamisoa Rakotoarimanana, Executive Secretary, Agency for Rural Electrification Development.  “Initiatives such as the UEF are highly appreciated when it comes to identifying key partners to support our strategy while simultaneously delivering substantial results.” 

“At Africa GreenTec, we align our actions with the Sustainable Development Goals (SDGs), including SDG 17: Partnerships for the Goals,” said Moritz Brauchle, Managing Director, Africa GreenTec. “Therefore, we are grateful to have found a strong partner in UEF with whom we can jointly achieve our goal of sustainable impact through renewable energy solutions.” 

To date, the UEF mini-grid programme in Madagascar is the fastest growing and the largest beneficiary of UEF grants.   

Sierra Leone 

The Government of Sierra Leone is committed to significantly increasing the national electrification rate, aiming to reach 92 percent by 2030. This ambitious goal is a response to the current access rate of just 26 percent, which falls to 5 percent in rural areas. With these low electricity access rates, the government recognizes the urgent need to implement electrified mini-grid systems to bridge this gap. 

Since 2020, the UEF has committed over USD 2 million in grant agreements for the deployment of mini-grid projects in two different funding windows. The UEF plans to sign a USD 706,000 grant agreement with Energicity (SL) Limited to develop seven mini-grids. This project is expected to provide 1,193 electricity connections and 0.2MW of renewable energy capacity that will impact the lives of nearly 6,000 people. 

Additionally, the UEF has issued conditional offer letters to developers for the construction of more than 20 mini-grid sites, showing substantial progress in the application process in the DRC, Madagascar and Sierra Leone. After the successful completion of all the requirements, the UEF will potentially extend grant agreements in the coming months. 

More information on the UEF is available here.  

This year Sustainable Energy for All (SEforALL) celebrated its 10-year anniversary. Having started as an initiative within the UN, our sphere of influence and impact on the global sustainable energy movement have evolved greatly over the past decade. 

Our 2022 work demonstrates our ability to build higher ambition, stronger policy and planning, and faster results, all of which are urgently needed to achieve affordable and clean energy for all by 2030 and net-zero emissions by mid-century. 

Of course, our work would not be possible without the support and collaboration of our many partners and funders, who we would like to thank for their commitment to helping us build a better future through sustainable energy. 

As the year comes to an end, now is a good time to look back at what we’ve achieved together. 

Higher ambition 

Our advocacy and diplomacy work aims to build high-level political support for energy access and transition around the world. In 2022, we enabled critical dialogues on energy among global leaders and secured significant new energy commitments from governments, companies, financiers, and others. 

SEforALL Forum 

Co-hosted with the Government of Rwanda, the Forum brought together the global energy, climate and development communities to learn, inspire and collaborate. Our partners used this global platform as an opportunity to launch new partnerships and commitments towards the energy transition. Collectively, they announced an impressive USD 347 million in commitments over the three days in Kigali, along with the launch of several important new initiatives, including Mission Efficiency, a global coalition dedicated to improving energy efficiency.  

Youth engagement at the Forum was extensive, with more than 300 youth bringing their voices to the various Forum sessions. Young people’s futures truly are at stake with the energy transition, so we make it a priority to support them in accessing today’s energy sector leaders. 

Ministerial Roundtables  

To foster collaboration among African countries in defining and advancing a just and equitable energy transition for Africa, we organized a Ministerial Roundtable at the Forum in Kigali. There, ten countries agreed on seven transformative actions towards achieving Sustainable Development Goal 7, outlining them in the Kigali Communique, which signals to the global community where support is needed in Africa for energy access and transition efforts. 

As a next step towards garnering this support, we held similar roundtables on the sidelines of the UN General Assembly in September and at COP27 in November. Importantly, the conversation at COP27 was organized as an Africa-Europe Ministerial Roundtable, which we hosted along with the Africa-Europe Foundation. African and European ministers listened to each other and strategized on how to accelerate Africa’s race towards a just and equitable energy transition while working together. 

There is now greater momentum for Europe to support Africa in achieving its energy goals, something that will be aided by establishing a “Africa-Europe Energy Leaders’ Group.” 

COP27 

The UN climate conference was also a major moment for us because of the SDG7 Pavilion, which we again hosted with the Global Energy Alliance for People and Planet (GEAPP). For the second year in a row, the pavilion was the main hub at COP for discussing and showcasing how to unite global efforts on energy, climate and development, and it served as a platform for the launch of several exciting new initiatives. 

With GEAPP and the UN Economic Commission for Africa, we launched the ground-breaking Africa Carbon Markets Initiative at COP27, which aims to support the growth of voluntary carbon markets in Africa for financing clean energy access and transition. With Bloomberg Philanthropies, we also announced our partnership with the government of Ghana to develop an Energy Transition Plan that will provide a detailed, data-driven pathway for the country and its partners to achieve its energy and climate goals. 

The Universal Energy Facility, a results-based financing facility managed by Sustainable Energy for All (SEforALL), is now open – with its first wave devoted to supporting mini-grid deployment in Sierra Leone and Madagascar.

As of 21 October, companies seeking results-based finance for mini-grid projects in Sierra Leone and Madagascar can apply for pre-qualification to the facility. Under this wave, the Universal Energy Facility will disburse USD 3 million in grant payments to deliver over 6,900 electricity connections based on a results-based incentive of USD 433 per electricity connection.

SEforALL, in collaboration with several donors and partners, including The Rockefeller Foundation, Shell Foundation, Power Africa, Good Energies, UK aid, Carbon Trust and Africa Minigrid Developers Association (AMDA), established the facility in response to growing demands from the energy access sector for results-based financing.  

“There is already evidence of results-based approaches accelerating the delivery of energy connections in African countries. Drawing on countries’ insights, Sustainable Energy for All is not only advocating for the widespread adoption of results-based financing, we are taking action into our own hands,” said Damilola Ogunbiyi, CEO and Special Representative of the UN Secretary-General for Sustainable Energy for All and Co-Chair of UN-Energy.

Wave 1 of the facility focuses on accelerating electricity connections through mini-grids. By tackling one of the most challenging energy technologies in its first wave, the Universal Energy Facility will demonstrate the effectiveness of results-based financing for making energy projects viable. The facility will expand in its next waves to include solar home systems and clean cooking solutions, with a goal of catalysing 2.3 million energy connections by 2023.

“We support the Universal Energy Facility because it’s designed to scale and to be here for the long-term, until universal energy access has become a reality,” said Sam Parker, CEO of Shell Foundation. “We believe an effort of this size can be most effectively championed and coordinated by the Sustainable Energy for All team in their next Decade of Action.”

As Programme Manager of the facility, SEforALL spent the last few months finalizing the incentive support for mini-grids under this wave, establishing governance, legal and administrative structures for the facility, securing support from government partners in the facility’s Wave 1 countries, and setting up the online platform for managing project applications, connection validations and disbursements.

The SEforALL team also undertook extensive analyses in collaboration with facility partners to create a model for determining potential emissions savings enabled by the facility. The facility is now accepting applications from project developers and companies. As a first step, interested companies should register for pre-qualification here.

Please contact Ruchi Soni at ruchi@SEforALL.org for more information on the Universal Energy Facility.

In the cold light of a COVID-19 world, we might well lose sight of another insidious public health crisis that kills an estimated 4 million people annually and whose adverse climate impacts include annual emissions equivalent to those of the global aviation industry. Unlike the response to COVID-19, no economic stimulus has been thrown at this crisis.

Around 3 billion people worldwide have no access to clean fuels or technologies for cooking, relying instead on burning biomass or solid fuels on open fires or in inefficient stoves. The consequences include deforestation, black carbon emissions and widespread human exposure to harmful indoor air pollution. Women and children, who are most often responsible for wood collection and cooking, carry a disproportionate share of the burden.

An estimated USD4 billion in annual investment is needed to achieve the Sustainable Development Goal 7 (SDG7) target of universal access to clean fuels and technologies for cooking by 2030. So just how much finance is committed to help achieve this goal? In 20 countries with some of the world’s highest clean cooking access deficits, a cumulative USD32 million was invested in clean cooking solutions in 2017. Yes, you read that right: USD32 million. 

One word sums up aggregate financial commitments to date for widespread deployment of clean cooking solutions: abysmal. The amount of finance allocated to an issue imperative to the global community achieving numerous SDGs—health, gender equality, climate action, sustainable energy and more—is equivalent to a professional footballer’s annual salary. 

A consequence of the dearth of finance available to support the clean cooking sector is the strain it places on the relatively few companies providing solutions. This is exemplified by the announcement last week that Rwanda-based Inyenyeri is going into liquidation.

Inyenyeri’s innovative approach to building a clean cooking fuel utility attracted early stage investors and earned the company an impressive customer following. But ultimately it was unable to raise the growth capital needed to scale its business.

The entrepreneurial challenge of raising capital in small and medium-sized businesses is a perennial one and no more so than during the current COVID-19 crisis, with liquidity constrained and global supply chains suspended. Even so, we can only hope that Inyenyeri’s experience will be a salutary one.

Tracking finance for clean cooking

The inadequacy of clean cooking finance globally was uncovered by Sustainable Energy for All (SEforALL) in the Energizing Finance 2019 research series, which tracked finance commitments for electricity and clean cooking access in 20 developing countries based on best available data.

A key takeaway from Energizing Finance 2019 is that meeting SDG7 targets requires a paradigm shift in how the global community approaches finance for clean cooking. A holistic approach that addresses the full value chain for demand and supply of solutions is urgently required because incremental approaches have not worked.

In other words, we need to build big markets for clean cooking solutions, and this calls for major financial and political commitment from the public and private sectors. Energizing Finance offers recommendations for how to build 'systems' of finance for clean cooking.

A crucial role for international public finance

The clean cooking sector is nascent, which means it requires grants and concessional funding to stimulate market demand and foster private sector engagement in supply. International public finance is the primary source of grant, concessional and high-risk capital for the sector’s development. Despite its catalytic role, according to Energizing Finance: Understanding the Landscape 2019, international public finance is declining—from 92 percent of all clean cooking finance tracked in 2015-2016 to 33 percent in 2017.

Realistically, domestic markets for clean cooking solutions are unlikely to scale without public finance to help alleviate risk for private sector investors and enterprises, and to stimulate demand. Given clean cooking’s overlap with and impact on numerous SDGs, development finance institutions (DFIs) are critical to facilitating universal access to solutions.

The World Bank’s new USD500 million Clean Cooking Fund and the Green Climate Fund’s USD20 million commitment to support the Global Clean Cooking Programme – Bangladesh are welcome developments. A core group of bilateral government funders, impact investors and philanthropies are also capitalizing the sector. But in view of the sheer magnitude of the financing gap, public climate and development finance has a more prominent role to play.

Domestic policy reform and investment

DFIs’ prioritization of clean cooking must be met with a similar show of commitment from national governments. Policy frameworks need to be reviewed and remade to enable sustainable deployment and adoption of clean cooking solutions, and governments must support the sector’s development through the value chain.

Nepal is one of the countries studied in Understanding the Landscape 2019. The report highlights how approximately 77 percent of Nepal’s energy is supplied by traditional biomass, including fuelwood, animal dung and residues, largely to meet residential demand for cooking. This reliance contributes to an estimated 8,700 deaths per year as a result of exposure to indoor air pollution.

However, the Government of Nepal has shown political will and engaged in targeted policy reform to facilitate increased deployment of clean cooking solutions in Nepali households. The government has established clear clean cooking targets within the framework of its 2018-2028 “Energy Decade” announcement, supporting the country’s improved Regulatory Indicators for Sustainable Energy (RISE) score of 73 (out of 100). Quantitative targets include the installation of 475,000 improved cookstoves and 131,200 biogas digesters by 2030, as set out in the Government’s National Rural and Renewable Energy Programme. Nepal’s first Nationally Determined Contribution includes a target to “equip every household in rural areas with smokeless (improved) cooking stoves by 2030”—a commendable goal in view of Nepal’s challenging mountainous terrain.

Meanwhile, the Alternative Energy Promotion Centre (AEPC) has been successful in supporting the deployment of more than 1.3 million improved cookstoves, 400,000 biogas plants, and around 600 solar cookers throughout Nepal. AEPC also implements the Government’s Renewable Energy Subsidy Policy, which includes clean cooking solutions.

Expanding available AEPC subsidies for clean cooking technologies and fuels, and raising international awareness of the availability of these subsidies, should attract a broader mix of solutions, companies and investment to Nepal’s clean cooking sector.

Addressing affordability gaps

The Nepal case study demonstrates the importance of subsidies in alleviating supply-side constraints for clean cooking solutions. However, a case study of Madagascar for Energizing Finance: Taking the Pulse 2019 highlights the need to also address barriers to wider clean cooking uptake on the demand side, specifically costs borne by consumers.

In Madagascar, less than 1 percent of the population—approximately 26.3 million people and 6.2 million households—used improved cookstoves (ICS) in 2017. Taking the Pulse 2019 forecasts that by 2030, 90 percent of Madagascar’s population will not be able to afford an ICS, putting the goal of universal clean cooking access out of reach. If consumers cannot afford an ICS there is effectively no demand for these stoves or clean fuels, which means clean cooking businesses are discouraged from investing in local markets.

To foster market growth, governments should consider subsidies to address consumer affordability gaps, to support a transition from traditional cooking methods to cleaner solutions. Taking the Pulse 2019 forecasts a cumulative USD217 million in consumer subsidies would be required to close the affordability gap for ICS in Madagascar by 2030.

Similar schemes have been implemented in India and Indonesia, leading to impressive gains in clean cooking access. These countries have experimented with direct cash transfers to consumers for the purchase of LPG kits (i.e. cylinders, hosing and stoves) as well as subsidizing lower-income households to enable them to buy LPG to use as cooking fuel.

Such measures must be matched with consumer awareness campaigns that promote clean cooking solutions, since many households will not be familiar with alternatives to their existing cooking practices or may need to be persuaded of the benefits.

As reflected in 2019’s Energizing Finance research findings, many countries with large clean cooking access deficits—including Madagascar and Nepal—have set ambitious targets for closing these gaps by 2030.

Success hinges on catalytic public finance, enabling domestic policies that support sustainable clean cooking value chains, and consumer support that promotes demand. This combination can crowd-in private sector involvement from a variety of investors and businesses, leading to more sustainable markets for clean fuels and cookstoves.

Photo credit: Inyenyeri