Publication - Taking the Pulse: Understanding Energy Access Market Needs in Five High-Impact Countries
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provides a pathway to elevate financing support for enterprises delivering decentralized renewable energy and clean cooking fuels and technologies to vulnerable populations in Asia and Africa.
The report findings are specifically geared for government leaders, donors, development finance players and energy access enterprises that all play critical roles in accelerating access to electricity and clean cooking—two cornerstone priorities of the globally agreed Sustainable Development Goals.
Our findings are especially relevant for countries in Asia and Sub-Saharan Africa, which have significant energy access gaps and promising opportunities to close those gaps more quickly and at less cost by boosting financing support to decentralized energy access providers. We offer specific recommendations on what’s needed.
While many studies have estimated amounts of investment needed to meet energy access goals, none have attempted to systematically capture what developing countries are committing to on energy access and, most importantly, how much is going to decentralized energy access solutions.
This report is part of a unique and broader research effort by Sustainable Energy for All, the World Bank, the African Development Bank, Climate Policy Initiative, E3 Analytics and Practical Action Consulting, that for the first time begins to answer these critical questions.
This report, by Practical Action Consulting and E3 Analytics, presents much-needed evidence on how enterprises delivering access to electricity and clean cooking are being financed in five countries – Bangladesh, Ethiopia, Kenya, Myanmar and Nigeria. These countries represent five highly different energy access markets from the 20 high-impact countries whose effort to increase access to electricity and clean cooking can make the biggest difference on a global scale. Each offers unique lessons for increasing finance flows to Tiers 1-3 access solutions, as set out in the World Bank’s Multi-Tier Framework—specifically, improved cookstoves, cleaner fuels, solar lanterns, solar home systems and lower capacity solar mini grids.
The report’s biggest takeaway is that overall finance flows are way too low and that enterprises themselves, while still growing and sometimes thriving, face complex financing challenges that differ widely from country to country, with varying levels of debt, equity and grant funding needs.
Despite declining production costs and improved reliability of decentralized solar, finance flows to enterprises in this sector are a fraction of what is needed to scale their businesses exponentially, especially to serve rural areas where demand for their products is greatest. We offer specific recommendations for elevating finance levels, including steps that will make it easier for enterprises to access capital more readily and at reasonable costs.
In the case of clean cooking, the challenges are far bigger, with enterprises being effectively starved of finance. Fixing this financing gap will require significantly more attention from governments, donors, customers, NGOs and investors who will need to coalesce around bolder market-based solutions. The report also takes a first effort at assessing the overall cost requirements for advancing to cleaner fuels, including LPG, ethanol and natural gas, presenting estimates on finance flows that will be needed from consumers, governments and the private sector.
Our research comes at a critical juncture in achieving – or falling short – on global energy access goals. We have just 13 years left to achieve universal access to affordable, reliable, sustainable and modern energy by 2030. Yet, based on the latest 2017 Global Tracking Framework data, just over one billion people globally still lack access to electricity and three billion lack access to clean cooking. A big segment of these populations is in the five countries we targeted.
These numbers are astounding and unacceptable. Lacking access to electricity means food cannot be refrigerated, vaccines cannot be kept safe and school children cannot do homework at night. Similarly, indoor cooking pollution from burning charcoal, wood and other fuels kills millions every year, while depleting already diminished forest cover. There is a larger economic toll, too. Countries that leave these populations behind undermine long-term economic development as well as national security.
We can and must do better to accelerate energy access progress. We hope this report guides its readers on the
pathways for doing so.
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