Challenge
In 2010, as Lighting Africa carried out its first pilot projects, about 1.2 billion people around the world were living without access to electricity. A lack of electricity limits educational and economic opportunities, trapping people in poverty. Those without electricity often use polluting and expensive lighting sources such as kerosene lamps or candles, the fumes of which can cause serious health problems, while a lack of electricity in health centers can result in disastrous outcomes for patients. In sub-Saharan Africa alone – the region with by far the largest energy access deficit – 1.7 million schools and health centers lack electricity.
While grid expansion has been essential to shrinking the electricity access gap to 789 million people by 2018, the remaining unconnected are increasingly difficult to reach as they are predominantly rural, remote, poor, and living in contexts suffering from fragility, conflict, or violence (FCV). Stand-alone solar solutions can reach these settings relatively quickly, affordably, and sustainably, and thus play a critical role in the drive to reach the United Nation’s Social Development Goal 7 (SDG7) – to ensure access to affordable, reliable, sustainable, and modern energy for all.
Approach
In 2009, the Energy Sector Management Assistance Program (ESMAP) partnered with the International Finance Corporation (IFC) to launch Lighting Africa —an initiative to develop a commercial market for quality solar lighting and energy products for those living without electricity across sub-Saharan Africa. Since then Lighting Global has been bringing together manufacturers, distributors, consumers, financial institutions, development partners, and governments to unlock key barriers to the scale-up of off-grid markets around the world, through a range of activities:
- Market Research and Knowledge Products are regularly produced and published to help manufacturers and distributors make informed business decisions, and to guide governments and development partners. The biennial Off-Grid Solar Market Trends Report (co-published with the industry group, Global Off-Grid Lighting Association - GOGLA), has become the industry benchmark for key market statistics, trend analysis, and forecasts. The 2020 Off-Grid Solar Market Trends Report was released at the Global Off-grid Solar Conference and Exhibition, which was officially opened by the President of Kenya and attended by over 1,300 delegates from 75 countries. This biennial event (co-hosted with GOGLA), has become the premier gathering for the off-grid industry.
- Quality Assurance protects consumers from poor-quality products and maintains consumer confidence. Lighting Global created an international quality standard for solar-powered devices and helped to launch VeraSol, to lead this work.
- Access to Finance has been identified as a critical barrier to the growth of the off-grid market. Lighting Global facilitates access to finance for manufacturers, distributors, retailers, and consumers by supporting the design and establishment of financing facilities that allow companies and end-users to access lines of credit. Results-based financing (RBF) initiatives will pay out funds to companies that reach pre-agreed targets, such as the one under the Kenya Off-Grid Solar Access Project (KOSAP) for meeting sales goals in underserved areas.
- Consumer Education campaigns help end-users stay informed about the benefits of solar energy, provide information on the latest technologies available, and inform how to access financing.
- Cooperation with governments helps to achieve national energy provision goals and to ensure policies and regulations help grow the off-grid market. Twenty-four national governments reference standards based on those created by Lighting Global in their policies.
Results
Lighting Global currently has programs in nearly 40 countries and in 2018, 65 percent of surveyed companies agreed that Lighting Global’s quality assurance process has been instrumental in facilitating the emergence of the off-grid market. Twenty-four national governments reference Lighting Global standards in their standards and/or policies and as of 2017 most countries in regions with energy access deficits included a defined role for off-grid in their national electrification strategies[1], underscoring the importance of off-grid solar in closing the electrification gap.
As of December 2019, 52.4 million people are able to meet their basic electricity needs (Tier 1 or better) with Lighting Global quality-verified products, and entire communities benefit from the increased access to off-grid solar products. An estimated 37 million metric tons of CO2 have been avoided since 2009 by displacing kerosene lamps[2]. Schools can access information and communication technology (ICT), health centers can power medical devices – and don’t need to perform emergency procedures in the dark. To reach these and future households and communities, ESMAP’s Lighting Global/Africa teams of experts support World Bank clients to design off-grid solar components of International Development Association (IDA) electrification projects, along with providing technical assistance grants.
In Myanmar, Lighting Global has been instrumental in developing sustainable public- and private-led off-grid business models as part of the National Electrification Project (NEP). Starting in 2015, ESMAP helped to develop and implement a “management of information system” to provide the government with an efficient way to track household system-size choices and installation progress through the provision of several layers of data - household surveys, installation, verification, and payment. This system is a first of its kind, ensuring timely reporting and decision making, and can be replicated in other electrification programs. Solar home system installations for clinics, schools, religious facilities, and street-lights have further extended the benefits to entire communities, reaching 7,378 off-grid villages in Myanmar, by June 2020.
In Ethiopia, Lighting Africa designed a revolving fund providing loans to private sector enterprises and microfinance institutions to expand the local renewable energy market and increase affordability of renewable energy products for households under the Electricity Network Reinforcement and Expansion Project (ENREP). The fund provides retailers credit to import and assemble renewable energy products—including solar lanterns and solar home systems—and microfinance institutions with funding to disburse loans to families to purchase these products. As of November 2019, the credit line has successfully supported the purchase of 1.2 million solar products and provided loans through microfinance institutions to more than 211,000 rural households, 60 percent of which are female-headed.
Bank Group Contribution
ESMAP support from July 2016 to June 2020 for Lighting Global accounted to $8.6 million, including $5.7 million for country grants.
Partners
Lighting Global has built strong partnerships with governments, the private sector, development agencies and other stakeholders, which have been key to building thriving off-grid markets (some examples of activities implemented include working with governments on electrification plans and BAT exemption approaches, providing market information to the private sector, collaborating with development agencies on consumer education plans, etc.). Lighting Global works closely with and through organizations supporting universal electrification, such as with GOGLA, Shell Foundation, USAID/Power Africa, the United Kingdom’s Department for International Development (DFID), the Africa Clean Energy (ACE) program, and Sustainable Energy for All (SEforAll) as part of the Community of Champions group.
Lighting Global regularly collaborates with other sectors to ensure the appropriateness and sustainability of electrification efforts for schools (education), farmers (agriculture), and medical centers (health). Existing partnerships with health professionals are proving particularly valuable in rapidly scaling up energy access efforts for health clinics in light of the COVID crisis.
In addition, Lighting Global has helped to establish new entities to provide core-functionalities independently. These include GOGLA (2012), which supports private sector companies and VeraSol (2020) to carry out Quality Assurance activities, previously led by Lighting Global in collaboration with the Schatz Energy Research Center and CLASP. Lighting Global continues to work closely with these entities.
Moving Forward
Going forward, Lighting Global’s goal - as ESMAP’s “Off-Grid Solar Scale-Up program” under the July 2020- June 2024 Business Plan - will be to build on existing success and lessons learned in order to expand off-grid markets to reach more than 600 million additional people with products that provide Tier 1+ access by 2030. Pro-poor targeted delivery models including demand side subsidies and social impact bonds will help to close the affordability gap, and gender gaps can be shrunk by supporting female access to finance and entrepreneurship.
In addition, private and public financing in the order of $7 – 11 billion (pre-Covid estimate) will need to be mobilized to achieve the goal of universal access. Successful financial instruments such as working capital facilities and RBF will be improved upon and scaled-up. Public funding for the off-grid sector (OGS) sector has grown rapidly, with over US$800 million for OGS and energy access related technical assistance approved by the World Bank from 2018 to 2019 alone. This represents a significant increase in the availability of finance compared to the US$386 million approved by the World Bank between 2015 and 2017. The World Bank has a forward-looking commitment to continue the levels of funding seen in the last few years, with approximately US$400 million for OGS and technical assistance already in the pipeline for 2020 and 2021. Most of this funding is provided in the form of loans to governments, with governments’ willingness to borrow funds to support the sector underlining their growing commitment to the role of OGS in achieving universal electricity access, including for productive uses of electricity and for electrification of public institutions essential for human capital development.
In light of the health and economic shocks COVID has unleashed globally, the off-grid solar sector’s outlook will no doubt change from what was predicted in the 2020 Market Trends Report. In response, Lighting Global has banded together with partners and industry stakeholders, including GOGLA, Power Africa, and SEforAll to address the most pressing issues, including working to designate off-grid as an essential service in energy-deficit countries and to develop important early interventions to support the industry through the economic impacts of the Covid-19 pandemic. Supporting the delivery of off-grid energy services to health centers, and testing sites, has also taken center-stage to aid in the fight against COVID, and will likely shape Lighting Global’s activities for the months – perhaps years – to come.
Beneficiaries
Ultimately, the primary beneficiaries of Lighting Global are the end-users who benefit from safe, clean, affordable lighting and energy products. Ann Muthoni, a farmer in Kenya, explains that before off-grid solar her family “used to spend a lot of money on kerosene. In the evening, when the children were studying, the kerosene emitted fumes that would fill the house. The following morning when the children woke up, they were coughing.” Since starting to use a solar lantern, the situation has improved. “We don’t get any more infections. The lamp has been helpful to us,” she explained.
Off-grid solar products also extend possible working hours after nightfall, and provide new business opportunities for users, such as through setting up a mobile phone charging business. Students are able to “[study] for longer now because other lighting products would not allow them to study for a long time,” says Bourry Sarr, a father in Senegal. Sales and distribution also create local jobs, such as for Risper Onyong’e, who sells lanterns in her village in Kenya who says she “learned sales and marketing techniques, how to keep records.” Productive use applications, such as solar water pumping also enhances income for farmers and other businesses.
Medical centers also benefit from the increased light while “medical tools are sterilized by simply inserting a plug and turning on a switch,” explains Khin Shwe San, a village health officer, in Myanmar.
In addition to the benefits derived from end-users and communities, the industry and governments working to deliver these products also benefit from Lighting Global’s efforts as expressed by H.E. The President of the Republic of Kenya Hon. Uhuru Kenyatta at the opening of the 2020 Global Off-Grid Solar Forum & Expo in Nairobi. In his keynote speech, discussing the Kenya Off-Grid Solar Access Project (KOSAP), which is carried out with support from the World Bank and Lighting Global, he said “To achieve our electrification program through off-grid solutions, my administration recognizes the importance of partnering with the private sector,” – which has been Lighting Global’s approach to off-grid electrification since its inception in 2008.
[1] A total of 267 countries in regions with energy access deficits included a defined role for off-grid energy in their national strategies; 20 in South Asia, 50 in Central Asia, 57 in Eastern Africa, 63 in South East Asia and Pacific, and 77 in Western Africa.
[2] This emissions estimate is calculated according to GOGLA’s impact metrics, considering products of .5WP+, and assuming a life cycle of 3 years.