How best to support energy access enterprises

4th July, 2014 by Paul Valentin

Paul Valentin, International Director, Christian Aid, shares lessons in supporting enterprises that provide access to clean energy.

The definition of energy as ‘power derived from the utilisation of resources’ resonates on more than one level with women and men living in energy poverty. Christian Aid, the organisation for which I work, understands that at the root of poverty lies a lack of power: the power to know your rights and demand them; the power to have access to essential services like water and healthcare but in today’s world also to electricity; the power to live; not just survive, but to thrive. You can survive without access to modern energy, but you will struggle to thrive.

Currently 1.3 billion people lack access to electricity. Energy poverty goes beyond being an inconvenience: it hinders the provision of health and education services and directly affects health, particularly the health of women and children. At present nearly three billion people cook on open fires or inefficient cook stoves – half of all the pneumonia deaths in children are linked to breathing in soot and smoke. Pneumonia is the leading cause of death in children worldwide, killing more youngsters than HIV, malaria and tuberculosis combined.

I have witnessed in many different countries the enormous difference it can make to people in poverty to have access to affordable energy. Even the introduction of basic solar lanterns or fuel-efficient cooking stoves can make a world of difference for the people concerned: more safety in and around the house, less time spent on gathering fuel, more productive time for schoolwork and home-based activities and an almost instant realisation of health benefits.

Alongside most donors and investors, Christian Aid and sustainable energy charity Ashden have come to the conclusion that, in order for products and services that lift people out of energy poverty to become widely available, they have to be delivered through market-based mechanisms. We’ve worked with renewable energy enterprises; some were successful while others have failed. Our joint work is aimed at identifying what support can make the difference between success and failure so that more people can be lifted out of energy poverty.

Our recently launched joint research focuses on the finance and technical support needs of the growing number of energy enterprises which are working to address energy poverty. Our findings are based on in-depth interviews with the leaders of energy enterprises, such as d.light, EcoZoom, and SELCO, and support providers, including ERM Foundation’s Low Carbon Enterprise Fund and GVEP.

Key findings of the research include the fact that that most enterprises delivering clean energy, especially at the small and medium end of the scale, have an unmet need for finance. Scarce sources include grants, loans and equity, but the need is particularly urgent for working capital. Participating enterprises also identified a need in the sector for readily available, impartial advice on financing options, how to reach investment readiness, and sales and marketing.

If you are a technical assistance provider, donor or investor then this research will enable you to identify how you can ensure the support you provide to enterprises is successful. Getting support right makes a massive difference – just look at the flexible grants that led to the creation of SunnyMoney, now the largest seller of solar lights in Africa.

The inequality of energy access needs to be addressed urgently. Currently the population of New York State consume as much energy as the 800 million in sub-Saharan Africa. Targeted support directly contributes to the success of energy enterprises that are delivering modern energy services to the billions of people that need it.

Paul Valentin is International Director, Christian Aid. The full report is available here

Photo credit: Martin Wright

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