ACCESS TO ENERGY
620 million
Africans
with no lighting
A F R I C A – Universal access to reliable, affordable, clean energy
is one of the major challenges on today’s development agenda.
In 2011, the United Nations launched the Sustainable Energy for
All initiative with the aim of bringing together stakeholders from
governments, business and civil society to eliminate
energy poverty. This is a field in which Proparco has been
active for years.
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ACCESS TO ENERGY
AFRICA
O
ne billion four hundred million people get
by without electricity. Another three billion are dependent on coal and traditional
biomass sources such as wood and crop waste to
meet their lighting, cooking and heating needs.
In energy terms, Sub-Saharan Africa is the world’s
most deprived region. Over half of the population –
620 million people – lacks access to
electricity, particularly in the countryJust 3% of global electric
side. Africa has the same electric
power investment
power output as Germany, although
its population is thirteen times
projected over the next
larger. Moreover, the average price
two decades would be
per kilowatt-hour is higher south of
the Sahara than elsewhere: $0.14,
enough to ensure access
compared with $0.04 in South Asia,
of all to energy.
for example.
Energy poverty in the region is clearly an obstacle to
human, social and economic development. Its adverse
impact on schooling for children and the agricultural
value chain (production, processing and storage) is
particularly well-documented.
To make matters worse, 1,400,000 people die every
year from inhaling toxic fumes given off by cooking
fuels. Malaria is responsible for fewer deaths.
1. The poorest inhabitants
of the African countryside
spend up to $150 a year
on batteries, candles and
mobile phone recharges.
2. Lighting alone can
significantly enhance
learning by enabling
children to go on studying
after nightfall.
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UNIVERSAL ACCESS TO ELECTRICIT Y
IS NO PIPE DREAM
The goal of the Sustainable Energy for All initiative
is to provide universal access to modern energy services, double the share of renewable energy in the
global energy mix and double the global rate of
improvement in energy efficiency by 2030. But that
goal will not become a reality without involvement by
all the stakeholders, starting with those in the private
sector, who can deliver solutions as investors, producers and distributors.
Changing the global energy landscape will require
pioneering public-private partnerships, substantial
private investment and joint efforts by governments,
businesses and civil society to strengthen markets.
This strikes some people as a challenge, others as an
opportunity – the opportunity for financial and technological innovation, with new markets, new industrial
partnerships, more jobs and income.
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A FUND TO COMBAT ENERGY POVERT Y
“Connecting a rural home to the power grid repre­
sents a high investment for electric power companies,”
explains Emmanuel Beau, the co-founder of Energy
Access Ventures (EAV), a venture capital firm. “Most
African States don’t have the resources to cover the
cost, particularly as power consumption often boils
down to scattered lighting, which offers a limited
return on investment. So the main focus is still on
urban areas and business users.”
EAV is the only investment fund in Sub-Saharan
Africa dedicated to financing (€250,000 to €4m) and
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assisting SMEs that offer energy access solutions
to households in the region’s rural and semi-urban
areas. Initiated at the behest of the French company
Schneider Electric, which covered a third of its
resources, EAV also received funding from the AFD
Group. In 2015, the latter invested €5m through its
Support Fund for Businesses in Africa (FISEA), a unit
advised by Proparco. The Fonds Français pour l’Environnement Mondial (French Facility for the Global
Environment – FFEM) likewise invested €1.5m, and
additional financing was provided by CDC (Proparco’s
British peer), the European Investment Bank
0,14
dollar per kWh
south of Sahara:
three times higher
than in South Asia
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ACCESS TO ENERGY
3
Emmanuel Beau, co-founder of Energy Access Ventures (EAV)
“Who can live today without lighting?”
EAV co-founder Emmanuel Beau is
someone who takes the long view.
He aims to make clean, affordable
power available to a million more
Africans by 2025. And that requires
mobilizing investors and raising funds.
Laid-back, self-confident, Emmanuel
Beau gets passionate when he talks about
EAV, energy access and Africa. In his late
twenties, Beau considers it a matter of
necessity to provide Africa’s rural dwellers
with lighting, above all from renewable
sources. Necessity in this case means
“reinventing the world we live in, starting
with our approach to producing, distributing
and consuming energy”. Before becoming
a manager of a €54.5m investment fund,
Beau gained valuable experience on the
ground. He turned a workshop in the
AFRICA
3.-4 OGE develops
and markets solar
systems coupled with
batteries that can
be connected up to
LED lamps, phone
chargers and other
electrical appliances.
The company offers
leasing arrangements
to cover the cost of
solar equipment and
enables customers to
control how and when
they pay via mobile
money.
Senegalese bush into a social enterprise
that leases out solar power systems
under hire-purchase schemes (managed
and supported by rural microfinance
institutions) to individual and collective
users, for example, and managed social
impact energy investments in Africa for
Schneider Electric. He belongs to the
up-and-coming generation of bold French
entrepreneurs and investors who believe
in taking action to “change the world”. But
because naive optimism isn’t his style,
he stresses the need to raise “loads” of
capital to achieve that. “The mobile money
boom, with Africa leading the way, has
combined with progress in solar energy
technology to make low-cost individual
energy access solutions a reality. As a result,
business models that foster the emergence
of viable venture capital firms are gaining
traction. Most startups in the sector are in
the experimental stage, but in Tanzania,
for example, OGE has gone from 10,000
installations a year to over 10,000 a month.”
EAV’s goal is for “those startups to break
even and start turning a profit so that they
can scale up and demonstrate the maturity
of the market”. For that to happen, support
from Proparco and other development
banks is “essential to ‘de-risking’ the
business model and attracting capital”,
Beau explains. Driving his determination
to see the companies in his portfolio
succeed is the belief that their success is
“the prerequisite to replicating their business
model across Sub-Saharan Africa and
perhaps at that point to make electricity
available to 620 million Africans”.
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“Changing the global energy
landscape will require
pioneering public-private
partnerships, investment
and efforts by governments,
businesses and civil society
to strengthen markets.”
(EIB) and the OPEC Fund for International Development (OFID).Proparco and the FFEM also co-finance
technical assistance to provide training and expertise
in management, corporate governance and recycling
to companies in the EAV portfolio. Schneider Electric
in turn makes its engineers, marketing specialists and
consultants available to the firm.
PREPAY BY PHONE
To bring electric power service to people in rural areas,
EAV takes advantage of mobile money options and the
emergence of “plug-and-play” solar power kits. “They
offer an easy way to cover simple needs and prepay
power use,” says Emmanuel Beau.
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In 2015, EAV made an inaugural $2m investment in
Off.Grid:Electric (OGE), a San Francisco and Arusha,
Tanzania-based company that develops and markets solar systems coupled with batteries that can be
connected up to LED lamps, phone chargers and other
electrical appliances. OGE offers leasing arrangements
to cover the cost of solar equipment and enables customers to control how and when they pay via mobile
money. Every month, the company “turns the lights
on” for thousands of people in Tanzania and Rwanda.
It plans to reach the one-million
customer mark by 2017 and branch
out into others countries in the
region. Further EAV investment
deals are under examination or soon
to be clinched. 1,405
megawatts
of power
capacity will
be installed,
including 695 MW
from renewable
energy sources,
through Proparco
financing in 2015.
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