Difference between revisions of "Green People's Energy for Africa - Knowledge Hub - Financing"

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Access to energy and connected productive technologies have the potential to promote the economic development of local enterprises in rural areas. However, financing productive use of energy (PUE) appliances, such as solar water pumps, mills or dryers, remains a challenge for small enterprises and rural populations in most countries in Sub-Saharan Africa.
 
Access to energy and connected productive technologies have the potential to promote the economic development of local enterprises in rural areas. However, financing productive use of energy (PUE) appliances, such as solar water pumps, mills or dryers, remains a challenge for small enterprises and rural populations in most countries in Sub-Saharan Africa.
  
−
More than 350 million people on the African continent do not have access to an account at a bank and are hence deprived of financial services. At the same time, the high upfront cost of the equipment needed for productive energy use often by far exceeds the financial capacities of small entrepreneurs, especially in rural areas. The provision of such services to rural users is even less attractive as a business case to many as their remoteness causes additional transport and infrastructure expenses. As they do not have any collateral which could act as a security towards the bank and comprehensive data on the creditworthiness of potential borrowers is missing, access to finance remains a central entry barrier. The lack of knowledge about decentralised renewable energy systems increases the perceived risk. Since finance institutions consider financing productive use of energy as risky, the interest rates proposed are high and jeopardise promising business cases for many users.
+
More than 350 million people on the African continent do not have access to an account at a bank and are hence deprived of financial services. At the same time, the high upfront cost of the equipment needed for productive energy use often by far exceeds the financial capacities of small entrepreneurs, especially in rural areas. Without collateral which could act as a security towards the bank and comprehensive data on the creditworthiness, access to finance remains a central entry barrier for small enterprises and rural populations. Since finance institutions consider financing productive use of energy as risky, the interest rates are high and jeopardise promising business cases for many users. It is therefore important to facilitate access to finance for end-users.  
−
 
 
−
It is therefore important to facilitate access to finance for end-users. However, attention should also be paid to the fact that these initiatives are set-up sustainably meaning that business structures are set up in a way that allows them to finance themselves in the long-term.  
 
  
 
'''Green People’s Energy provides financial support and capacity development measures to financing institutions, end-users and private companies to improve access to finance for rural enterprises and promote productive use of energy in off-grid rural communities.'''
 
'''Green People’s Energy provides financial support and capacity development measures to financing institutions, end-users and private companies to improve access to finance for rural enterprises and promote productive use of energy in off-grid rural communities.'''
  
−
'''Support for finance institutions to provide green finance'''
+
'''Support to finance institutions to provide green finance'''
  
 
* Building links between micro-finance institutions (MFIs), solar companies and organised savings and loans associations or cooperatives to access funds
 
* Building links between micro-finance institutions (MFIs), solar companies and organised savings and loans associations or cooperatives to access funds
−
* Establishing a guarantee fund to reduce the risk of micro-loans provided to village loan associations for the procurement of PUE appliances
+
* Establishing guarantee funds to reduce the risk of micro-loans provided to village loan associations for the procurement of PUE appliances
−
* Offering financial incentives to microfinance institutions to develop and introduce a dedicated credit-line for renewable energy-based PUE appliances
+
* Offering financial incentives to microfinance institutions to develop and introduce credit-lines for renewable energy-based PUE appliances
−
* Introducing revolving funds that can be re-used to fund new business once they have been paid back by     initial lenders
+
* Introducing revolving funds that can be re-used to fund new credits once they have been paid back by initial lenders
−
* Training of financial institutions on financing renewable energy solutions
+
* Training of financial institution staffs on financing renewable energy solutions
  
−
'''Support for local enterprises as end-users'''
+
'''Support to local enterprises as energy users to acceess finance'''
  
 +
* Energy assessments and technical advice to local enterprises when applying for finance
 
* End-user grant schemes that make PUE appliances affordable in rural communities
 
* End-user grant schemes that make PUE appliances affordable in rural communities
−
* Energy assessments and technical advice to local enterprises when applying for finance
+
* Capacity building to ensure maintenance,  and therefore longevity of the financed asset
−
* Capacity building to ensure longevity of financing and savings for maintenance
 
 
* Matching local enterprises with suitable MFI
 
* Matching local enterprises with suitable MFI
−
* Improving market links and sales techniques to raise income opportunities
+
* Provide market trainings to improve market links and sales techniques of entrepreneurs
  
−
'''Support for private solar companies'''
+
'''Support to solar companies to sell affordable products incl. financing solutions'''
  
−
* Offering results-based finance (RBF) schemes that provide incentives for each sold PUE appliance to enable cost reductions for end-users and slowly develop the market
+
* Offering results-based finance (RBF) schemes that provide incentives to solar companies for each PUE appliance sold to enable price reductions for end-users and slowly develop the market
−
* Putting users in touch with solar companies
+
* Facilitating cooperation between solar companies and MFIs
 
* Providing funding for vouchers or other incentive schemes
 
* Providing funding for vouchers or other incentive schemes
−
* Support them in organising appliance showcases and reaching rural customers
+
* Support to solar cpmpanies in organising appliance showcases and reaching rural customers
  
 
== II. Case Studies ==
 
== II. Case Studies ==
−
Many of the Green People's initiative's projects revolved around sustainable financing mechanisms and innovative approaches to overcoming the high initial costs of renewables. These measures worked on different scales, from end-user financing to companies as well as cooperatives and MFIs. To learn more about the different financing mechanisms, read the following case studies and project factsheets:  
+
Many of the Green People's initiative's projects revolved around sustainable financing mechanisms and innovative approaches to overcoming the high initial costs of renewables. To learn more about the different financing mechanisms, read the following case studies and project factsheets:  
−
* Link to Projects
+
 
−
* Link to Case Studies
+
'''<u>Case Studies</u>'''
−
* Link to KPF Facthseets
+
* [[Results-Based Financing Mechanism for Productive Equipment Sales in Benin]]
−
* etc...
+
* [[Promoting Access to Finance in Benin]]
 +
* [[Fostering Investments into Solar Powered Irrigation through Results Based Financing in Ghana]]
 +
* [[Access to Microfinance for Productive Use in Ivory Coast]]
 +
* [[Promoting Productive Use of Energy in Ivory Coast]]
 +
* [[Developing an Innovative Solar Irrigation Business Case in Gaza Province]]
 +
* [[Improving Access to Finance for Off-Grid Renewable Energy in Namibia]]
 +
*[[Supporting PV Market Development in Rural Namibia through a Results-Based Financing (RBF) Mechanism]]
 +
* [[Access to Finance for Renewable Energy Projects in Senegal]]
 +
* [[Empowering Women through Productive Use in the Agricultural Value Chain in the Villages of Nguidjilone in Senegal]]
 +
* [[Increasing Access to Energy and Access to Finance for Coffee Farmers in Uganda]]
 +
'''<u>Small Projects Fund</u>'''
 +
 
 +
* [[Understanding the CO2 Footprint of PV Installations|Case Study on the CO2 Footprint of PV Installations in Cameroon]]
 +
* [[SolarCent|Community Management of Solar Water Pumps in Rural Namibia]]
 +
* [[Harnessing CO2 Emission Reduction Monitoring to Accelerate EV Adoption|Harnessing CO2 Emission Reduction Monitoring in Uganda to Accelerate Electric Mobility Adoption]]
 +
* [[Renewable Energy for Agriculture|Productive Use of Energy for Women's Farming Cooperative in Malawi]]
 +
* [[Fairtrade Inclusive Energy Fund|Scaling Energy Access Solutions with Fairtrade Inclusive Energy Fund in Uganda]]
 +
* [[Solar for Improved Rural Health Systems|Solar Electricity and Chlorine Production for Improved Rural Health Systems]]
 +
* [[Solar Solutions for Refugees and Host Communities|Solar Solutions and Financing Options for Refugees and Host Communities in Uganda]]
 +
* [[Women and Youths Take Off]]
  
 
== III. Publications ==
 
== III. Publications ==
 +
[[File:Thematic Knowledge Product Innovative Approaches to End-User Financing GIZ 2023.pdf|alt=|thumb|311x311px]]
  
  
  
 +
The GBE '''Thematic Knowledge Products''' are designed to share the knowledge and learnings about the topics gathered during the implementation and to make them accessible for practicioners. The following knowledge product outlines the latest approaches to PUE projects at the time of project implementation as well as learnings and recommendations from the GBE projects.
  
−
[[File:Thematic Knowledge Product Innovative Approaches to End-User Financing GIZ 2023.pdf|right|frameless|278x278px]]The GBE '''Thematic Knowledge Products''' are designed to share the knowledge and learnings about the topics gathered during the implementation and to make them accessible for practicioners. The following knowledge products outline the latest approches to PUE projects at the time of project implementation as well as learnings and recommendations from the GBE projects.
 
  
  
 +
This knowledge product focuses on innovative approaches to promote end-user financing, particularly for solar PUE appliances for farmers and small businesses, such as solar water pumps/solar-powered irrigation systems (SPIS) and solar cooling. Sector-specific challenges and intervention approaches are first described before GBE programme findings are presented to enrich the sector discussion.
  
−
This knowledge product focuses on innovative approaches to promote end-user financing, particularly for solar PUE appliances for farmers and small businesses, such as solar water pumps/solar-powered irrigation systems (SPIS) and solar cooling. Sector-specific challenges and intervention approaches are first described before GBE programme findings are presented to enrich the sector discussion.
 
  
 
== IV. Countries ==
 
== IV. Countries ==
−
{{#ask:[[Category:GBE ProjectDB]] [[GBE category financing::Financing]]
+
Blue flags show the location of the relevant Small Projects Fund projects. The relevant case studies can be seen by hovering over the green highlighted countries.{{#ask:[[Category:GBE ProjectDB]] [[GBE category financing::Financing]]
 
|?GBE locationSPF
 
|?GBE locationSPF
 
|format=openlayers  
 
|format=openlayers  

Latest revision as of 13:56, 16 May 2024

Icon-gbe-financing.svg

Green People's Energy for Africa
Knowledge Hub

Financing

Green People’s Energy provides financial support and capacity development measures to financing institutions, end-users and private companies to improve access to finance for rural enterprises and promote productive use of energy in off-grid rural communities.

Table of Contents

I. Overview
II. Case Studies
III. Publications
IV. Countries

I. Overview

Access to energy and connected productive technologies have the potential to promote the economic development of local enterprises in rural areas. However, financing productive use of energy (PUE) appliances, such as solar water pumps, mills or dryers, remains a challenge for small enterprises and rural populations in most countries in Sub-Saharan Africa.

More than 350 million people on the African continent do not have access to an account at a bank and are hence deprived of financial services. At the same time, the high upfront cost of the equipment needed for productive energy use often by far exceeds the financial capacities of small entrepreneurs, especially in rural areas. Without collateral which could act as a security towards the bank and comprehensive data on the creditworthiness, access to finance remains a central entry barrier for small enterprises and rural populations. Since finance institutions consider financing productive use of energy as risky, the interest rates are high and jeopardise promising business cases for many users. It is therefore important to facilitate access to finance for end-users.

Green People’s Energy provides financial support and capacity development measures to financing institutions, end-users and private companies to improve access to finance for rural enterprises and promote productive use of energy in off-grid rural communities.

Support to finance institutions to provide green finance

  • Building links between micro-finance institutions (MFIs), solar companies and organised savings and loans associations or cooperatives to access funds
  • Establishing guarantee funds to reduce the risk of micro-loans provided to village loan associations for the procurement of PUE appliances
  • Offering financial incentives to microfinance institutions to develop and introduce credit-lines for renewable energy-based PUE appliances
  • Introducing revolving funds that can be re-used to fund new credits once they have been paid back by initial lenders
  • Training of financial institution staffs on financing renewable energy solutions

Support to local enterprises as energy users to acceess finance

  • Energy assessments and technical advice to local enterprises when applying for finance
  • End-user grant schemes that make PUE appliances affordable in rural communities
  • Capacity building to ensure maintenance, and therefore longevity of the financed asset
  • Matching local enterprises with suitable MFI
  • Provide market trainings to improve market links and sales techniques of entrepreneurs

Support to solar companies to sell affordable products incl. financing solutions

  • Offering results-based finance (RBF) schemes that provide incentives to solar companies for each PUE appliance sold to enable price reductions for end-users and slowly develop the market
  • Facilitating cooperation between solar companies and MFIs
  • Providing funding for vouchers or other incentive schemes
  • Support to solar cpmpanies in organising appliance showcases and reaching rural customers

II. Case Studies

Many of the Green People's initiative's projects revolved around sustainable financing mechanisms and innovative approaches to overcoming the high initial costs of renewables. To learn more about the different financing mechanisms, read the following case studies and project factsheets:

Case Studies

Small Projects Fund

III. Publications


The GBE Thematic Knowledge Products are designed to share the knowledge and learnings about the topics gathered during the implementation and to make them accessible for practicioners. The following knowledge product outlines the latest approaches to PUE projects at the time of project implementation as well as learnings and recommendations from the GBE projects.


This knowledge product focuses on innovative approaches to promote end-user financing, particularly for solar PUE appliances for farmers and small businesses, such as solar water pumps/solar-powered irrigation systems (SPIS) and solar cooling. Sector-specific challenges and intervention approaches are first described before GBE programme findings are presented to enrich the sector discussion.


IV. Countries

Blue flags show the location of the relevant Small Projects Fund projects. The relevant case studies can be seen by hovering over the green highlighted countries.
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