1. Beyond the Grid Fund for Zambia
Mainstreaming off-grid electrification in sub-Saharan Africa
REEEP | Martin Hiller
COP24, Katowize | 11 Dec 2018

2. REEEP MISSION
REEEP mobilises private investment into clean energy services in low- and middle-income countries in Africa and Asia.

3. REEEP Founded 2002 Over 200 RE/EE projects worldwide
IT and knowledge management in climate and energy
Private Financing Advisory Network PFAN, jointly with UNIDO
Leveraged 200m USD investment in 2018

4. REEEP ACTIVITY AREAS Innovative public-private financing models
Expanding off-grid electrification
Energy in agriculture
Market intelligence and analytics

5. BEYOND THE GRID FUND FOR ZAMBIA

7. B Payments Cash & Carry or 12 to 18 months pay-back

8. WHY A BEYOND THE GRID FUND?
At current pace: SDG7 missed by more than 100m households
Share of SSA Households with Electricity Access: SDG7 vs. BAU
UNDER BAU:
100%
65%
90%
of HHs will have electricity
access by 2030
80%
104million
70%
HHs will remain without access (only 20M fewer than today).
60%
Over 600 million people – 100m HH – in sub-Saharan Africa live without access to electricity and are unlikely to be connected to the central utility grid for years or decades – if ever. Many households and small businesses rely on expensive, polluting and unsafe kerosene diesel for their lighting and firewood for their cooking and thermal energy needs
The need to Disrupt Off-grid Electricity Financing in Africa
Shell Foundation tries to get a realistic idea of the quantum and type of capital needed to reach the off-grid component of Sustainable Development Goal 7 (SDG 7) in sub-Saharan Africa (SSA), defined as all households with at least a large portable system or a solar home system.
Progress to date on Off-grid Solar products has been remarkable, thanks to pioneering enterprises
50%
$11billion
40%
In capital required for mini-grids and SHS
30%
Historical
Business as Usual
SDG 7 Met
Reference: Shell Foundation 2017

9. BEYOND THE GRID FUND FOR ZAMBIA (BGFZ)
EUR 20m Swedish Fund
Electrify 1 million Zambians in rural and peri-urban areas
Market Creation - injects public sector funding to overcome early structural challenges in the market
Utilizes procurement tools to incentivize early-stage start-up and longer term scale-up needs of DRE enterprises
Incentivizes innovation, customer rights and compliance with strict quality / standards
Builds investor confidence to mobilize downstream investment

10. BGFZ: FUNDING ROUND 1 (2017 – 2021 | €11.5m )

11. BGFZ IMPACT - 92% ABOVE TARGET – OCTOBER 2018
64,598 ESS EUR disbursed* 335,909 Zambian beneficiaries**
* Exchange rate as of 13. November 2018 (SEK1 = EUR )
** Based on an average household size of 5.2 people.

12. BGFZ IMPACT - FINANCE AND EMPLOYMENT
Leveraged USD 21 million
26% of co-finance target
Enabled the recruitment of additional 294 people
9 new third-party financiers providing finance to BGFZ ESPs, more in pipeline
871 new commission-based sales agents
32% of primary customers are women

13. BGFZ | RESULTS-BASED FINANCE
Energy Service Subscription (ESS)
Provision of energy services
Technology: Product technical specifications
Terms of Service: Deposit, PAYG loan, repayment, tariffs, etc.
Duration of Service: minimum 3-year warranty, up-grade options
Sustainability of Service: solid business model, performance
Results are pre-financed based on agreed business plan and roll-out schedule
Results-based monitoring at transaction level - EDISON

14. Energy Data & Intel System for Off-grid Networks
Draft Numbers

15. BEYOND THE GRID FUND: 3 PILLARS
Market Information & Analytics
EDISON and MEL provide real-time evidence and market data
Platform for Market Change
Off-Grid Energy Taskforce: PP forum for addressing market barriers and issues
Incentives and Procurement
New affordable, reliable, sustainable, modern renewable energy services
Procurement tools:
We do not procure an idea – this would be a challenge fund
We are not procuring tables
We use procurement tools for what we eventually want – energy services delivered to rural areas
And we select companies to deliver these services through business models that work
INCENTIVE SCHEME: Based on an analysis of current market conditions, a tender process to “procure” the deployment of a public good is developed: a service or commodity that provides high value to society but which, under existing circumstances, is not sufficiently profitable to support purely commercial activity.
DATA Analytics: We gather data and information on deployments gathered via a rigorous monitoring and evaluation framework, yielding valuable insights and metrics on “frontier” markets. M&E is supported by a dedicated data system extracting relevant data about energy service deployment from contracted Energy Service Providers (ESPs). This system is of tremendous value for (1) Monitoring and Verification of Energy Service Deployment, (2) Demonstrating BGF impact to the public and (3) Modelling and Analysing business models and market trends to define next steps for further programme roll out. Not only does EDISON record specific data on the energy connections themselves, but also precise, granular and dynamic data on customer payments as part of the loan portfolios of BGFZ-participating companies (currently four companies).
Platform for Market Change: Stakeholder engagement to highlight he opportunities for off-grid and remove market barriers: This can e.g. be issues related to unclear taxation regulations or enforcement, recycling systems for e-waste or new forms of licencing for renewable mini-grids that have to be developed to support a new type of market.

16. Thank you!
Martin Hiller
REEEP