8 PAOP Annual Report.pdf

POWER AFRICA

OFF-GRID PROJECT

FINAL REPORT

2018–2023

FINAL REPORT

2018 – 2023

DISCLAIMER:

This report is made possible by the support of the American People through the United States Agency for International Development (USAID). The contents of this report are the sole responsibility of RTI International and do not necessarily reflect the views of USAID or the United States Government. This report was prepared under Contract Number AID-720-674-18-D-00004 / AID-720-674-19-F-00005.

Photo Credit: Power Africa

The Project has stayed adaptable, innovative, and close to the communities we serve—much like the off-grid technology it promotes.

DAVID THOMPSON, ACTING COORDINATOR, POWER AFRICA

FINAL REPORT

2018 – 2023

4 5

CONTENTS

ACRONYMS AND ABREVIATIONS ..................................................... p1

PROJECT OVERVIEW ..................................................... p2

SUMMARY OF ACTIVITIES ..................................................... p4

WHAT HAVE WE

ACHIEVED?

• Final status of results accomplished

• Highlights of accomplishments against annual work plans

WHAT HAVE WE

LEARNED?

• Lessons learned during implementation

• How we have refined implementation over time

• Suggested resolutions to identified constraints

WHAT CAN BE

REPLICATED

& FURTHER

DEVELOPED?

• Performance indicators and their relative usefulness

• Recommendations for follow-on work

p6 p68 p80

Photo Credit: Irene Country Lodge

6 1

COIN Fund Catalyzing Off-grid Investment Fund

DRC Democratic Republic of Congo

FY Fiscal Year

LPG Liquefied Petroleum Gas

MFI Microfinance Institution

NGO Nongovernmental Organization

PAOP Power Africa Off-grid Project

PAYGO Pay-As-You-Go

PUE Productive Use of Energy

RBF Results-Based Financing

SHS Solar Home System

U.S. United States

USAID United States Agency for International Development

USG United States Government

“After 20 years distributing PUE, this grant gave us the encouragement and opportunity to focus specifically on women in the farming community and to adapt our solutions to more directly target the problems they face.

GREGORY DENN, MANAGING DIRECTOR, PSS, KENYA

ACRONYMS AND

ABBREVIATIONS

Photo Credit: Carla Visser

2 3

Power Africa is a United States Government-led partnership, coordinated by the United States Agency for International Development (USAID), that brings together the collective resources of over 170 public and private sector partners to double access to electricity in sub-Saharan Africa by 2030.

Contributing to this goal, the USAID-funded Power Africa Off-grid Project (the Project):

countries.

Duration: 5 years (November 13, 2018 to November 12, 2023).

Objectives The Project aimed to accelerate private sector-led energy access by:

• Providing off-grid energy companies with tailored technical assistance to help them grow sustainably.

• Offering off-grid energy financiers and investors broad-based market intelligence to inform capital investments.

• Advising governments on policy frameworks that support the growth of the off-grid energy sector.

• Managing Power Africa’s Catalyzing Off-grid Investment Fund and awarding grants for piloting and scaling sustainable business models that increase energy access.

Partners

• RTI International implemented the Project in collaboration with

Fraym, Norton Rose Fulbright, Practical Action Consulting, Tetra Tech, Institute for the Future, 60 Decibels, Top Consulting Incorporated (TCi), Sagana, DAI Magister Ltd., VIDA.place GmbH, Persistent Energy Capital AG, Enexus Finance, AltRaise Advisory, Delphos International, Ltd., Open Capital Group Limited, ECo LTD Group, Soft Landing International, Maverick Energy Consulting, Finergreen Africa, Maitri Capital Limited, Open Capital Group Limited, DDS Sustainable Solutions UK Limited, Open Capital Group Limited, Direct to Capital Limited, Solstroem ApS, Frankfurt School of Finance and Management, and MFR Credit Rating.

• Power Africa consists of 12 U.S. Government agencies; more than 170 private-sector partners; and 20 bilateral and multilateral development partners, key government institutions, and counterparts that work together to increase the number of people with access to power.

The Power Africa Off-grid Project (the Project) was a five-year program (November 2018 to November 2023), funded by USAID, to accelerate off-grid electrification across sub-Saharan Africa. RTI International implemented the Project in collaboration with Fraym, Norton Rose Fulbright (NRF), Practical Action Consulting, and Tetra Tech.

26 Countries of Operation (12 Focus and 14 Non-Focus Countries) The Project initially focused on ten countries in sub- Saharan Africa:

In 2020 and 2021, the Project included Liberia and Uganda, respectively, as focus countries.

The Project operated in focus countries through Lead Advisors, who were responsible for day-to-day activities and coordinated with the local USAID mission and other stakeholders. The Project also worked in 14 non-focus countries through its technical advisors and the Catalyzing Off-grid Investment (COIN) Fund: Benin, Burkina Faso, Chad, Guinea, Lesotho, Madagascar, Malawi, Mali, Mozambique, Nigeria, Sierra Leone, Somalia, Togo, and Zambia.

UGANDA

TO

G

O

TANZANIA

SIERRA

LEONE

SENEGAL

RWANDA

NIGER

LIBERIA

KENYA

GHANA ETHIOPIA

DEMOCRATIC

REPUBLIC OF

THE CONGO

CÔTE

D’IVOIRE

CAMEROON

BE

N

IN

NIGERIA

ZAMBIA

M A

D

AG

A

SC

A R

LESOTHO

M O

ZA

M

BI

Q

UEM

A

LA

W

I

MALI

GUINEA

BURKINA

FASO

CHAD

SO

M

AL

IA

Lo

PROJECT OVERVIEW

4 5

To achieve its objectives, the Project designed the unique Beyond the Grid (BTG) 2.0 Sustainable Market Transformation Framework.

The Project framework consisted of the following five specific focus areas:

Business performance:

Find tailored solutions for off-grid solar companies to improve sales.

Access to finance:

Catalyze capital for the off-grid energy sector.

Policy and regulations:

Advise governments on private-sector-friendly policy frameworks.

Market dynamics:

Commission and publish off-grid energy market research.

Cross-sectoral integration:

Identify and capitalize on opportunities to realize socio-economic benefits through clean energy.

All framework aspects included an ongoing focus on gender equality, to deliver the benefits of clean energy to women and men equally.

• Provided business advisory services to solar home system (SHS) and mini-grid companies.

• Supported companies to operate in underserved counties.

• Supported off-grid companies and associations with operations and partnerships.

• Supported SHS and productive use of energy (PUE) companies with distribution and retail strategies.

• Supported companies to improve their sales, operations, and offerings in non-focus countries.

• Supported the deployment of payment options for off-grid solar.

• Supported SHS companies to adopt and implement gender-inclusive practices.

• Supported local companies to integrate productive use of energy products.

• Supported female entrepreneurs and women’s associations to adopt PUE.

• Supported the public and private sector to develop and implement gender strategies.

• Supported gender lens investing.

• Disseminated PUE studies and models.

• Collaborated with relevant USAID projects and partners on energy–agriculture projects and products.

• Supported healthcare facility electrification activities and assessments.

• Supported circular economy and e-waste initiatives.

• Collaborated with the Smart Communities Coalition and other USAID and U.S. Government projects in support of increasing energy access for refugees.

• Promoted healthcare facilities and schools as anchor customers.

• Supported off-grid companies to carry out activities through national solar associations.

• Supported off-grid sector associations and utilities on key activities.

• Supported tax exemption procedures for solar equipment.

• Supported the adoption, approval, and implementation of off-grid policies and government initiatives.

• Connected development partners, companies, and public institutions to promote the mini-grid sector.

• Strengthened institutional and regulatory framework for mini-grids and SHS companies.

• Supported rural electrification plans, programs, and policy and regulatory frameworks.

• Provided COVID-19 advocacy support to national solar energy associations.

• Supported SHS, mini-grid, and PUE companies to access finance.

• Introduced off-grid companies to potential investors.

• Provided advisory support to lenders, donors, and investors.

• Supported microfinance and bank partnerships with the off-grid sector.

• Fed investor pipelines with off-grid opportunities.

• Increased the financial capacity of local financial institutions.

• Provided capital-raising support to off-grid companies.

• Supported the World Bank’s Regional Infrastructure Finance Facility.

• Supported companies entering the market.

• Provided market intelligence and business development support to off-grid companies.

• Updated stakeholders on key market changes and opportunities.

• Supported U.S. companies entering a new country by providing tailored market intelligence.

• Mapped off-grid market resources and update stakeholders on key market changes and opportunities.

• Built the capacity of industry associations.

• Supported company expansion for last-mile distribution.

• Mapped new PUE distribution channels.

SUMMARY OF ACTIVITIES

WITH EXAMPLES OF ACTIVITIES BY WORKSTREAM

6 76 7

SUPPORTED

12 GOVERNMENTS

TO IMPLEMENT IMPROVEMENTS

TO THEIR ENERGY FRAMEWORKS

ORIGINAL TARGET:

6 MILLION

109%

OF OUR GOAL ACHIEVED

120%

OF OUR GOAL ACHIEVED

ORIGINAL TARGET:

11 GOVERNMENTS

ORIGINAL TARGET:

$500 MILLION

245%

OF OUR GOAL ACHIEVED

100%

200%

PE

RC

EN

TA

G E

AC

H

IE

VE

D

MOBILIZED

$1.22 BILLION

IN FUNDS

FOR ENERGY PROJECTS

ESTABLISHED

7.22 MILLION

NEW OFF-GRID

DIRECT CONNECTIONS

This section presents the Project's results tracked against performance indicators.

Three Key Outcomes Achieved:

WHAT HAVE WE

ACHIEVED?

POWER AFRICA STANDARD INDICATOR LIFE-OF-PROJECT TARGET LIFE-OF-PROJECT RESULT PERCENTAGE ACHIEVED

Number of new off-grid actual direct connections 6,000,000 7,223,118 120%

Number of new grid and off-grid anticipated direct connections

6,000,000 12,342,827 206%

Amount of investment mobilized for energy investment

$500 million $1.22 billion 245%

Number of laws, policies, regulations, or standards to enhance energy sector governance formally proposed, adopted, or implemented

57 78 137%

Number of productive-use off-grid devices or systems sold

16,515 92,155 558%

Number of supported investors, lenders, and foundations that introduce and expand off-grid-specific financial products and/or begin marketing to off-grid companies after receiving support

42 341 812%

Number of United States companies participating in PA projects/transactions

50 98 196%

Number of African governments that received PA support to implement improvements to their frameworks

11 12 109%

Number of healthcare facilities electrified 227 377 166%

Number of beneficiaries from electrified healthcare facilities

2,000,000 2,051,061 103%

Power Africa Off-grid Project surpassed all 20 of its life-of-project targets

8 9

SENEGAL GUINEA SIERRA

LEONE

MALI LIBERIA CÔTE

D’IVOIRE

BURKINA

FASO

GHANA TOGO NIGER BENIN NIGERIA CAMEROON DRC CHAD ZAMBIA LESOTHO RWANDA UGANDA TANZANIA MOZAMBIQUE KENYA ETHIOPIA SOMALIA MADAGASCAR OTHER

2 M

1 MD

IR

EC

T

C O

N N

EC

T

IO

N

S R

EP

O

R T

ED

2,866,145

4,33332,9912,55336,078 212,399

602,040 713,233

194,608

510,426

16,51162,54337,857

1,119,584

289,447

7,13423,00522,0921,122 97,056121,104172,624

18,54428658,412

3 M

ELECTRICITY ACCESS:

NUMBER OF NEW GRID AND OFF-GRID

ACTUAL DIRECT CONNECTIONS

Actual direct connections reflect the actual number of new households and businesses that have access to electricity through on-grid connections, and off-grid solutions.

RESULT:

7.22 MILLION

TARGET: 6 MILLION

120% OF OUR GOAL ACHIEVED

10 11

USD MILLION MOBILIZED

100 200 3000

FY 23

FY 22

FY 21

FY 20

FY 19

$234 M

$244.5 M

$68.2 M

$362.9 M

$315.1 M

AMOUNT MOBILIZED:

AMOUNT OF INVESTMENT MOBILIZED FOR

ENERGY PROJECTS

The total cost of power sector transactions that reach financial close, enabled by USG and/or Power Africa partner assistance.

RESULT:

$1.22 BILLION

TARGET: $500 MILLION

245% OF OUR GOAL ACHIEVED

ELECTRICITY ACCESS:

NUMBER OF NEW GRID AND OFF-GRID

ANTICIPATED DIRECT CONNECTIONS AT

FINANCIAL CLOSE

Projected direct connections reflect the number of new households and businesses that are expected to have access to electricity through on-grid connections and/or off-grid solutions upon financial disbursement for a given activity.

RESULT:

12.34 MILLION

TARGET: 6 MILLION

206% OF OUR GOAL ACHIEVED

ANTICIPATED CONNECTIONS

2 M 4 M 6 M0

FY 23

FY 22

FY 19–FY21 6,101,579

2,233,418

4,007,830

12 13

Liberia

Guinea

Senegal

Kenya

Sierra Leone Benin

Burkina Faso

Cameroon

Niger

DRC

Côte d’Ivoire Togo

Mali

Ghana

Ethiopia

Tanzania

Rwanda

Uganda

POLICY REFORMS:

NUMBER OF LAWS, POLICIES, REGULATIONS,

OR STANDARDS TO ENHANCE ENERGY

SECTOR GOVERNANCE FORMALLY PROPOSED,

ADOPTED, OR IMPLEMENTED AS SUPPORTED

BY USG ASSISTANCE

For Power Africa, reforms, laws, regulations, technical codes, and administrative procedures to be considered under this indicator would also include those that encourage investment in clean and cleaner energy, small scale and off-grid options, and/or support gender integration in the energy sector.

RESULT:

TARGET: 57

137% OF OUR GOAL ACHIEVED

COUNTRY

NUMBER OF POLICIES/

REGULATIONS/STANDARDS

SUPPORTED

Benin 1

Burkina Faso 1

Cameroon 4

Côte d'Ivoire 4

DRC 9

Ethiopia 2

Ghana 2

Guinea 1

Kenya 7

COUNTRY

NUMBER OF POLICIES/

REGULATIONS/STANDARDS

SUPPORTED

Liberia 13

Mali 2

Niger 10

Rwanda 4

Senegal 6

Tanzania 2

Togo 2

Uganda 8

KEY

LAWS, POLICIES,

REGULATIONS

SUPPORTED

14 15

30,000

40,000

SENEGAL SIERRA

LEONE

MALI LIBERIA CÔTE

D’IVOIRE

BURKINA

FASO

GHANA TOGO NIGER BENIN CAMEROON DRC CHAD ZAMBIA RWANDA UGANDA TANZANIA MOZAMBIQUE

20,000

10,000

MALAWI KENYA ETHIOPIA SOMALIA OTHER

PU

E

PR

O

D U

C T

S

SO

LD

1,2341,704 185 1,000 829

2,751

4,435 6,400

1,722 1,062

2,653

540 260

4,010

19,495

1,000 50

40,987

1,539 174 105

NUMBER OF PRODUCTIVE-USE OFF-GRID

DEVICES OR SYSTEMS SOLD AS A RESULT OF

USG/POWER AFRICA ASSISTANCE

Number of productive-use off-grid devices or systems (agriculture processing machines, water pumps, refrigerators, etc.) sold as a result of support provided by USG to off-grid companies. RESULT:

92,155

TARGET: 16,515

558% OF OUR GOAL ACHIEVED

16 17

RWANDA

Grantee:

OffGridBox 6 health facilities

127,179 beneficiaries

TOGO

Grantee:

KYA-Energy Group 20 health facilities

214,791 beneficiaries

GHANA

Grantee:

PEG Solar Ghana 23 health facilities

73,449 beneficiaries

MADAGASCAR

Grantee:

Nanoé 35 health facilities

95,843 beneficiaries

MOZAMBIQUE

Grantee:

SolarWorks!

92 health facilities

926,509 beneficiaries

LESOTHO

Grantee:

OnePower 7 health facilities

36,118 beneficiaries

MALAWI

Grantee:

Zuwa Energy 9 health facilities

154,984 beneficiaries

ZAMBIA

Grantee:

Muhanya Solar Ltd.

7 health facilities

77,372 beneficiaries

NIGERIA

Grantee:

Havenhill Synergy Ltd.

21 health facilities

306,600 beneficiaries

UGANDA

Grantee:

SustainSolar 5 health facilities

31,872 beneficiaries

Grantee:

IPCS

2 health facilities

6,944 beneficiaries

More than 2 million beneficiaries across 10 countries

NUMBER OF BENEFICIARIES FROM

HEALTHCARE FACILITIES ELECTRIFIED

Total number of beneficiaries with access to a healthcare facility electrified. The healthcare facilities should have improved solar off-grid electrical energy production equipment and related electrical installations to guarantee the supply of essential services.

RESULT:

2,051,061

TARGET: 2,000,000

103% OF OUR GOAL ACHIEVEDPhoto Credit: Carla Visser

18 1918 19

HIGHLIGHTS OF

ACCOMPLISHMENTS

AGAINST ANNUAL WORK PLANS

INDIVIDUAL IMPACTS

Support for a unified commercial model for ENGIE Energy Access to accelerate connections in nine countries. This support helped the company to develop a leaner and more efficient company structure, align its operations in each country, and ensure that best practices were shared, replicated, or adapted across countries. This support resulted in improved sales in all of ENGIE Energy Access’s nine countries of operation, leading to hundreds of thousands of new connections.

A market assessment for Yellow, in Eastern Uganda, contributed to increased sales. With the Project’s business-performance support and market intelligence, Yellow Africa, a distributor of solar home systems in Malawi, leveraged a new, focused strategic approach to guide its expansion to Uganda. Consequently, the company recorded steady sales growth in the period following the Project’s assistance.

Sales-strategy support to BrightLife Uganda increased its sales by 60 percent. The Project’s business-performance support helped BrightLife assess its sales approach and develop a more efficient and effective strategy to reduce costs and employ local sales agents. During the period after PAOP provided this sales-strategy support, the company increased its sales by 60 percent.

Support for developing a gender action plan and adopting gender-inclusive policies and practices helped PEG Africa unlock a $12 million investment from the CDC and qualify as a 2X Challenge investment. Also, as a result of PAOP support over 12 months, PEG experienced a 14 percent increase in female leadership and a 30 percent decrease in employee turnover. Revenue growth of 60 percent during the same period can be correlated to the adoption of gender-inclusive practices and increase in female leadership based on a well-established business case.

Companies developed, piloted, and refined new business models and approaches to accelerating energy access. The Project advised companies to adopt pay-as-you-go (PAYGO) financing models, develop bankable business plans to improve the cost-effectiveness of their operations, optimize risk-management practices, and more. In FY 2022, the Project developed, published, and disseminated a PAYGO Guide for Off-grid Energy Companies and a PAYGO Credit Risk Management Guide.

Cross-work-stream support helped Oolu Solar close $2 million in financing and expand its activities in West Africa with 500 new sales agents. The Project shared policy and regulatory information, helped Oolu Solar process its products through the Government of Cameroon, connected it with candidates for leadership positions, informed its market strategies in 30 off-grid areas of Cameroon, and introduced it to the telecommunications company MTN to mobilize a network of sales agents. The Project’s legal advisory support helped Oolu Solar raise $2 million to expand its operations in Cameroon, Mali, Niger, and Senegal. As a result, Oolu Solar Business Development Manager Rose Dikongue shared, "I would like to thank you for introducing us to MTN and its distribution network. Today we remember that thanks to this partnership, we have an average of 500 active MTN agents responsible for selling Oolu products in the North Region."

BUSINESS PERFORMANCE

“[As a result of Power Africa’s support] insights have sprung up which point to critical success factors and how and where we can gain more efficiencies and scaling power across our markets by replicating best practices already embedded in some countries.

Getting this down on paper so clearly lets us move from reliance on insights held by a few through direct experience to a tangible knowledge bank that senior leaders can use to make critical organizational decisions in the future.

ALISON BOESS, HEAD OF CREDIT OPERATIONS, ENGIE ENERGY ACCESS Photo Credit: ENGIE Energy Access https://www.usaid.gov/powerafrica/document/power-africa-btg-case-study https://www.usaid.gov/powerafrica/document/power-africa-paygo-guide-grid-energy-companies https://www.usaid.gov/powerafrica/document/power-africa-paygo-guide-grid-energy-companies https://www.usaid.gov/documents/power-africa-paygo-credit-risk-management-guide

FINAL REPORT

2018 – 2023

20 21

Photo Credit: BrightLife

In 2022, with Power Africa’s help, BrightLife piloted a community-driven sales structure to reduce costs and achieve sustainable growth.

Through this model, BrightLife works with local networks, such as savings groups and cooperatives, to promote solar products and drive sales. The model relies on local “sales ambassadors” recruited from within the community and assigned to specific customer profiles, to promote and explain BrightLife’s products.

SYSTEM-LEVEL IMPACTS

86 partnerships brokered in West Africa. In West Africa, the Project identified parties with aligned interests and facilitated introductions between 86 off-grid energy companies and private investors, resulting in productive, mutually beneficial partnerships. Consequently, Project-supported transactions in West Africa have totaled more than $218 million, contributing to PAOP surpassing life-of-project targets.

Support for expansion into new markets. Thanks to the Project’s targeted insights, companies such as Sun King and d.light expanded their operations and reach across West Africa and southern Africa. In FY 2020, the team supported the Ethiopian company Rensys to win a $725,000 Feed the Future grant and pursue its mini-grid license application, resulting in Rensys becoming one of two companies to receive a mini-grid license for Dek Island.

Rapid Project-led information-sharing, coordination, and advocacy efforts enabled solar companies in 10 countries to operate as essential services during COVID-19 lockdowns.

• Essential service designation. In FY 2020, at the onset of the pandemic, the Project contributed to efforts to designate the off-grid sector as an essential service, encourage the suspension of disconnections, and more. As of the end of FY 2020, governments effectively designated off-grid companies as essential services in all the Project’s focus countries where such a designation was necessary for these companies to operate (Liberia and Tanzania had no such need).

• Recommendations for governments and donors. The Project shared recommendations among key sector-wide stakeholders to minimize pandemic-related economic hardships through payment relief for off-grid customers; deferrals of taxes, duties, and levies for off-grid companies; exemptions on public health-related energy equipment; mobile money and transaction fee suspensions; and donor-funded subsidies to alleviate company default rates.

• GOGLA coordination, information sheets, blogs, and updates to companies. The Project quickly developed, published, and disseminated six information sheets on priority topics, as identified by off-grid companies, and two blogs (one on the sector’s role and another on lessons from the Ebola response). Many companies said they found the information sheets very useful and changed their operations, to some extent, after reading them. The Project regularly provided policy and regulatory updates for GOGLA’s COVID-19 Policy Tracker for the off-grid solar sector in Africa. Also, the Project participated in weekly meetings related to the COVID-19 Relief Fund spearheaded by Acumen and GOGLA, as well as the Technical Assistance Working Group associated with these efforts.

The Project directly supported 23 companies to adopt gender-inclusive policies and practices toward increasing women’s employment in the sector, including in leadership positions, and increasing women’s access to energy products and services. The support included disseminating the Project’s gender-assessment tool and developing a gender action plan based on the findings of the assessment. The Project shared other resources to promote good practices by companies, and provided on-demand and tailored advisory support. The Project developed a market-focused gender strategy for Simusolar, based on research on the agricultural PUE needs of female farmers in Simusolar’s market. The strategy developed for Simusolar informed the Project's creation of a general use roadmap for sector stakeholders to develop a market-focused gender strategy to increase the uptake of agricultural PUE by women.

BUSINESS PERFORMANCE

https://www.usaid.gov/powerafrica/coronavirus https://powerafrica.medium.com/powering-a-response-off-grid-solars-role-in-a-pandemic-98287bbae890 https://medium.com/@PowerAfrica/off-grid-solar-companies-draw-on-ebola-lessons-to-respond-to-covid-19-aea4bda7926d https://www.usaid.gov/powerafrica/document/market-focused-gender-strategy-simusolar https://powerafrica.medium.com/cultivating-change-increasing-womens-access-to-off-grid-productive-use-of-energy-for-agriculture-ed28fc218bb4

FINAL REPORT

2018 – 2023

22 23

23 gender action plans implemented across sub-Saharan Africa. Overall, PAOP’s support to companies on gender inclusion raised awareness about the business case for gender equality and the importance of tailoring marketing and sales strategies to women customers, based on an understanding of their energy needs and barriers to access. Companies also recognized the imperative of incorporating gender considerations into their financing strategies. PAOP directly supported 13 companies in West Africa and 10 companies in East Africa to adopt gender-inclusive policies and practices toward increasing women’s employment, including in leadership positions, and increasing women’s access to energy products and services.

The companies included:

10. Oolu Solar (SHS)

11. OPES–LCEF (Investor)

12. Pawame (SHS)

13. PEG Africa (SHS)

14. Rafode (MFI)

15. responsAbility (Investor)

16. Sidai Africa (PUE)

17. SIMA Funds (Investor)

18. SIMA Funds Energy Access Relief Fund (Investor)

1. Agsol (PUE)

2. Baobab+ (SHS)

3. d.light (SHS)

4. Deevabits Green Energy (SHS)

5. Ecobora (PUE)

6. Gaia Impact Fund (Investor)

7. GreenMax (Investment Facility)

8. Mwezi Solar (SHS)

9. Nuru Energy (Mini-grid)

19. Simusolar (PUE)

20. Solar Panda (SHS)

21. SunFunder (Investor)

22. Winch Energy (Mini-grid)

23. ZiZ Energie (Mini-grid)

BUSINESS PERFORMANCE

Photo Credit: Kat Harrison

“I am the one who persuaded my husband to purchase the product, although he also needed it. Since this product has been of help to us, my husband now trusts my ideas, even in choices of other things.

FEMALE SOLAR HOME SYSTEM USER, KENYA

FINAL REPORT

2018 – 2023

24 25

ACCESS TO FINANCE

INDIVIDUAL IMPACTS

Application assistance in West Africa helped companies win tens of millions in funding. The Project worked closely with companies to identify and prepare financial applications for grants and other sources of funding. In West Africa, among other examples, the Project’s application assistance successfully led to the following grant funding: $2.5 million in Burkina Faso, $7.2 million in Liberia, $1.8 million in Sierra Leone, and $1.2 million in Côte d’Ivoire.

Legal support to Sun King's (Greenlight Planet’s) $75 million facility could lead to 2.8 million connections. In FY 2021, the Project extended legal support to Sun King in Kenya, one of the largest companies in the off-grid energy market, which was raising significant debt to fund its expansion. Thanks to this funding, Sun King expects to deploy 2.8 million connections.

Regulatory and grant support enabled a U.S. Government-funded $1-million feasibility study to develop 100 rural mini-grids for 192,000 people in Côte d’Ivoire. In 2020, when the Côte d’Ivoire government sought mini-grid development opportunities, the Project proposed funding through the U.S. Trade and Development Agency, which expressed interest in receiving a grant application within two weeks. The Project worked rapidly with the Ivorian government to review and translate the grants agreement into French, facilitate approvals and leadership commitments from ministry staff, finalize the selection of sites, and draft terms of reference. As a result, USTDA officially approved the funding. The Project then supported the parties to draft a request for proposals, and helped arrange the list of USG contractors to participate in the bid. The study assesses 100 unelectrified rural communities, with a potential 32,000 connections that will benefit 192,000 people.

“We have worked over the past two years with our partners, including U.S. Power Africa, to develop an Off-grid Action Plan for rural areas.

It is time to implement that Off-grid Action Plan, and this grant from U.S. Trade and Development Agency is critical to take a concrete step forward toward this implementation.

ABDOURAHMANE CISSÉ, CÔTE D’IVOIRE MINISTER OF

PETROLEUM, ENERGY, AND RENEWABLE ENERGIES

Photo Credit: SunCulture

The Project developed and launched innovative financing mechanisms and products, including:

FINAL REPORT

2018 – 2023

26 27

Large-scale facilities in local currency could be replicable in future transactions. The Project supported:

• Legal and technical assistance to d.light enabled a trailblazing $238 million multi-currency receivables-financing facility. In FY 2022, Solar Frontier Capital Limited and d.light jointly announced the establishment of a new $238 million off-balance financing vehicle, Brighter Life Kenya 2 Limited (BLK2). The financing structure promises to improve energy access for nearly three million people in Kenya and accelerate d.light’s expansion in the region. BLK2 includes partial financing from a $62 million senior lending facility, which the U.S. Development Finance Corporation (DFC), Norfund, responsAbility, and Oikocredit jointly finance. The Project provided d.light with legal assistance and technical advice for the transaction, and continued to support d.light’s efforts to expand the facility in other markets through similar transactions across East and West Africa. It is still relatively unusual for any sector in Sub-Saharan Africa to raise these types of debt with this type of structure, so this transaction serves as a proof of concept. Further, few companies have the capacity to raise and, more importantly, take on this type of leverage; therefore, the facility demonstrates the level of maturity reached by leading companies in the sector.

• Sun King (formerly Greenlight Planet) Kenyan-shilling-denominated $130-million sustainable-securitization transaction unlocked capital to fund clean energy at scale.

In FY 2023, Sun King closed a $130-million facility that is expected to provide clean-energy access for one million customers. The Project advised Sun King on the design strategy of the securitization, including review and options for structuring, with the goal of setting the groundwork for Sun King to attract large institutional investors and reduce investment hurdles.

• End-to-end capital-raise support over three years was catalytic, with Nuru closing a $1.2-million deal in FY 2021 and a $40 million equity raise in FY 2023. Nuru is a DRC-based company whose urban solar photovoltaic, hybrid mini-grids and utility-scale solar metro-grids cater to both commercial and industrial (C&I) and residential customers. In FY 2021, the Project provided Nuru with capacity-building support, technical assistance, financing opportunities, and introductions, as the company explored partnerships with investors. In FY 2021, Proparco announced the award of $1.2 million in debt and equity to Nuru, which has supported the company’s growth throughout eastern DRC. The Project supported this deal by providing end-to-end capital-raise technical assistance. In FY 2023, the Project supported a Series B equity raise of $40 million, marking the end of three years of Project support. The capital enabled the construction of 13.7 MWh in projects and potentially contributed to attracting further investments in DRC.

• Access-to-finance coaching, treasury management services, portfolio quality support and interim leadership support.

From FY 2020 through FY 2023, the Project provided to companies and investors a range of targeted, custom-tailored, short-term technical assistance related to interim Chief Operating Officer and Chief Financial Officer services, coaching, treasury management, fundraising assistance, carbon credit strategies, credit rating, and gender lens investing. End-to-end transaction-focused support

ACCESS TO FINANCE

focused on support areas such as legal structuring, financial modeling, investor pitch decks, shareholder agreements, capitalization tables, management accounts.

• Local company Energy+ and U.S. company Solar X partnered to raise capital in frontier West African markets. Omnium Mali comprises two sister companies with operations in Mali: the African company Energy+ and the U.S.-based company Solar X. In 2020, the Project pitched to investors Cordaid and E3 Capital (formerly

“The financial model [PAOP] helped create has been really useful when speaking with investors.

The support given for the pitch deck creation has helped us prepare to meet with investors.

The coaching session [PAOP] conducted has given our management team the confidence to meet with investors and pitch our company and funding needs. We are so thankful for the support because we know it will help us mobilize the funding needed to grow our company.

LAURA CORCORAN, CHIEF BUSINESS DEVELOPMENT

OFFICER, APTECH AFRICA

Energy Access Ventures) the joint venture Omnium Mali, which resulted in $1 million in grant, debt, and equity from the U.S. African Development Foundation, Cordaid, and Venture Builder. The Project further supported Solar X with its financial modeling and structuring challenges. The Project’s introductions, insights on commercial structures, valuation recommendations, and other transaction-related support led to a financial close of $4.5 million. This milestone investment for West African solar markets will help Solar X develop and expand its services in Burkina Faso, Côte d’Ivoire, and Mali. This transaction demonstrates the value of localization of Africa-based entities developing West African markets, as Energy+ is a 100-percent African company and the development finance institution E3 Capital is based in Nairobi. Since FY 2020, Solar X has successfully reached financial close on other transactions, including an $8 million debt facility in FY 2023 that the Project helped structure.

• Grant and capital-raising support to Baobab+ unlocked multiple funds. Baobab+ is an SHS distributor in Senegal that sells solar kits and digital products, with educational content. In FY 2021, the company closed a $2.35 million transaction to expand its PUE products, and secured an additional $1.5 million USAID Development Innovation Ventures (DIV) grant to support deployment of its offerings in DRC and increase access to finance through PAYGO data scoring in Senegal. The Project supported both the investment and grant win, notably by providing on-the-ground due-diligence assistance in Senegal, treasury management and Chief Financial Officer support, an introduction into the PUE market, and support for agricultural value chain projects. With this investment, Baobab+ estimates 23,000 connections achieved from the expansion of its solar product range to PUE solar kits, to help customers develop businesses and generate income in rural areas.

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“Thank you for your advice and support throughout the long and heavy [grant] selection process. It was a great and decisive help for us to identify the opportunity, better understand DIV's expectations, and the right project that would make sense for the both of us, and finally, find solutions to the issues raised along the way.

ANTOINE GARNIER, CHIEF MARKETING AND SALES OFFICER, BAOBAB+

SYSTEM-LEVEL IMPACTS

Tens of millions granted to off-grid energy companies in five countries. Power Africa is a partner of the Beyond the Grid Fund for Africa (BGFA), managed by the Nordic Environment Finance Corporation (Nefco), implemented by the Renewable Energy and Energy Efficiency Partnership (REEEP), and funded by the Government of Sweden. PAOP technical experts dedicated substantial time and effort to supporting the process of awarding grants, from beginning to end, in five countries:

Burkina Faso, DRC, Liberia, Uganda, and Zambia. The Project’s role included promoting the opportunity widely across the sector; advising BGFA leaders on criteria and evaluation-process improvements; helping certain companies apply by supporting their applications, proposals, and business plans; evaluating other companies’ prequalification-phase and final submissions; and providing due-diligence support. As a result, BGFA awarded tens of millions in funding, for example providing $4.3 million in Liberia to Energicity, Lib Solar, and Mobile Power.

Project-moderated event in DRC led to $122 million in pledged donations to electrify 400,000 households. In FY 2022, as a result of a roundtable organized by the USAID Mission in DRC, the Project, and the national off-grid energy agency, a total of $122 million was pledged by donors to the Mwinda Intermediary Fund, which aims to electrify 400,000 households in DRC. Contributions came from USAID through the Alliance Garamba Project; Sweden through Beyond the Grid Fund for Africa; the World Bank; REDD+ (Reducing Emissions from Deforestation and Forest Degradation) National Fund, funded by the Government of Sweden; the Japan International Cooperation Agency; and the French

Photo Credit: Baobab+

Development Agency (Agence Française de Developpement [AFD]).

Four funds realized results from the Project's significant gender lens investing support. For several years, the Project delivered customized gender-lens-investment training to several funds, for example, in 2022 to Triple Jump's Energy Entrepreneurs Growth Fund, Mirova– SunFunder's Gigaton Empowerment Fund, and GreenMax Capital Group's Green 4 Access First Loss Facility. This support mobilized capital for off-grid companies that either achieve Power Africa’s objectives for gender equality or agree to take measurable steps to meet these standards as well as Power Africa’s objectives to increase women’s participation in the sector and improve women’s access to clean-energy technology. As of the end of 2023, the following four funds achieved results from PAOP's significant gender-lens-investing support:

1. responsAbility Access to Clean Power Fund

2. Energy Access Relief Fund

3. SIMA Funds–Angaza Distributor Finance Fund

4. Mirova–SunFunder Gigaton Empowerment Fund (elaborated below)

$270 million off-grid climate fund benefited from PAOP’s legal support and gender lens investing expertise. In FY 2022, the Project began advising the $500 million Mirova–SunFunder Gigaton Empowerment Fund, a blended-finance climate fund managed by SunFunder. This fund expects to deploy $270 million for mini-grids, SHS, and PUE in sub- Saharan Africa, with a strong focus on gender. PAOP assisted the fund with documentation, condition-precedent closure, and local legal advice. The Project provided gender-lens-investing training to SunFunder management and staff, as well as representatives from impact investor Mirova.

SunFunder requested that the Project train its team to apply a gender lens throughout the investment process, which contributed to the results.

ACCESS TO FINANCE

https://beyondthegrid.africa/about-bgfa/ https://beyondthegrid.africa/about-bgfa/

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2018 – 2023

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Several funds have benefited from Project support:

• $75 million Regional Infrastructure Finance Facility. In FY 2021, the Project supported the Eastern and Southern African Trade and Development Bank (TDB), which manages the $75 million off-grid fund debt fund called the Regional Infrastructure Finance Facility (RIFF). The Project offered support in several areas, including pipeline development, transactional support, market analysis, and introducing and appraising off-grid businesses. TDB also requested the Project’s help to understand carbon offset/credit markets, set up carbon-finance programs, and identify guarantees options for its $75 million debt-finance facility. The facility comprises a 19-year credit line of $400 million and a 38-year $15 million concessional technical assistance credit.

• $50 million Opes–Low Carbon Enterprise Fund. In FY 2021, Fondazione Opes and the Low Carbon Enterprise Fund (Opes–LCEF) awarded two investments, through their East Africa–focused Restart Fund, to off-grid companies. Munyax Eco in Rwanda received $75,000 and WidEnergy Africa Limited in Zambia received $100,000. The Project shared leads with Opes–LCEF for its Restart Fund and offered access-to-finance support for its $50 million Reimagine Fund, which provides debt, equity, and revenue-based financing to companies.

• Energy Access Relief Fund (EARF) launched with Project support, starting with a $68 million transaction. In FY 2021, the Project provided significant support to launch the Energy Access Relief Fund, an unprecedented partnership of 16 governments, foundations and investors, managed by SIMA Funds. The Project’s technical assistance involved gender mainstreaming and legal advisory support to manage closing this complex fund with multiple lenders.

The Project supported the legal process of assessing and identifying the optimal financing structure to handle multiple providers and types of capital, and assisted the fund to comply with Green Climate Fund gender requirements. Reaching its first close of $68 million in July 2021, EARF began disbursing concessional loans to off-grid solar companies affected by the COVID-19 pandemic. As of the end of the Project, EARF provided unsecured working-capital lending to support 87 small and medium-sized enterprises in the sector.

EARF's climate finance provisions aim to reduce 1.3 million tons of carbon dioxide equivalent in emissions.

• $1.1+ million Private Sector Foundation Uganda COVID-19 Relief Fund. In FY 2021, the Project supported Private Sector Foundation Uganda (PSFU), an umbrella for the Ugandan private sector, which was implementing a $1.1-million COVID-19 relief fund on behalf of Energising Development. The Project provided technical assistance with evaluating applications and helped to develop a methodology to disburse awards while the rest of the relief funding came in.

• $1.37+ million for Results-Based Financing (RBF) Green Economic Recovery Fund (GERF) in Tanzania. In FY 2021, building upon well-established RBF mechanisms and structures, this fund supported the recovery of firms throughout Tanzania, while broadening RBF incentives to include economic impact parameters relevant to the post-lockdown period. From 2020 to 2021, RBF- GERF opened with approximately $1.37 million in RBF incentives available to the private sector, to stimulate solar and small SHS markets in mainland Tanzania. The Project supported discussions on the recovery needs of the sector, ticket sizes for the grant, potential beneficiaries from its current pipeline, and new organizations. The

ACCESS TO FINANCE Project also provided intelligence on market trends and opportunities in the sector.

Microfinance institution (MFI) webinars attracted 200+ unique participants. In FY 2020, the Project produced and led five live, hour-long webinars for microfinance institutions (MFIs) in the series “An Introduction to Renewable Energy Financing in Sub-Saharan Africa,” which attracted more than 200 unique participants. The sessions were recorded as a YouTube playlist. Topics included identifying loan opportunities, developing energy loans, evaluating MFI readiness, researching the industry and market, developing products, launching and monitoring a pilot, selecting products and partners, working on memoranda of understanding, developing a rollout strategy and business plan, preparing for launch, and monitoring and assessing a rollout. The Project shared tools to help MFIs better understand the needs and sizes of their market segments and develop better energy-financing products.

Following the webinar series, PAOP reached out to several interested MFIs to support their development of energy-financing products. As a companion resource to these webinars, the Project released Microfinance Loans for Increasing Access to Off-Grid Solar Products, which guides companies, MFIs, and local banks on providing loans for off-grid solar products.

Widespread adoption of Financial Modeling Tool. In FY 2021, the Project launched its open-source Financial Modeling Tool together with supplementary training material, and assisted three companies seeking to update and improve their financial modeling methodology, profitability analysis, and fundraising: SHS provider NovoMoto, PUE financier EnerGrow, and mini-grid developer Sunkofa. Experience gathered from this in-depth support informed further development of the modeling tool. PAOP hosted two webinars to introduce companies to the tool, demonstrate its features, and advise on best practices in financial modeling for capital-raising processes, with 317 and 226 participants, respectively.

Following the webinars, Differ Group, a Norwegian early-stage equity investor, quickly introduced the tool and adjusted it for two of its portfolio companies.

Africa Enterprise Challenge Fund's portfolio companies had found the tool useful, and asked if the Project could hold a session with investees to explain how to use it. In Ghana, SNV’s Renewable Energy Development and Acceleration Project requested its portfolio to use the tool.

In Kenya, SunFunder used the tool for the portfolio of its World Bank-funded facility, the Kenya Off-Grid Solar Access Project. Global Distributor’s Collective also incorporated the tool into its training program, Upskilling the Last Mile, for last-mile distributors. In FY 2022, the Project helped two Ugandan companies—Energrow, a PUE financier, and Village Power, an off-grid company—to model their finances using the tool. The Project helped the companies improve their financial modeling, analyze profitability, and build a fundraising strategy. Energrow secured a grant from the Dutch DOEN Foundation during PAOP support.

“PAOP ’s support on our financial model and market mapping has really helped us refine our model and access a grant. We are now in initial conversations with two equity investors as a result.

AARON LEOPOLD, CHIEF EXECUTIVE OFFICER

ENERGROW

https://www.youtube.com/playlist?list=PLHQxb1b97Kr6Amxvqk_JyPWE9XtlZ3hUN https://www.usaid.gov/powerafrica/document/power-africa-microfinance-loans-increasing-access-grid-solar-products https://www.usaid.gov/powerafrica/document/power-africa-microfinance-loans-increasing-access-grid-solar-products https://www.usaid.gov/powerafrica/beyondthegrid/off-grid-solar-market-assessments#finmodtool

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2018 – 2023

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INDIVIDUAL IMPACTS

In Kenya, the Project supported the off-grid industry’s efforts to preserve value-added tax (VAT) exemptions in FY 2020 and advised the Finance Bill of 2022. The Tax Laws (Amendment) Bill, 2020 and the Finance Bill, 2020 proposed the revocation of key VAT exemptions that had enabled the growth of the off-grid solar industry.

With support from the Project, the sector was successful in advocating for the Government of Kenya to strike the deletion of the exemptions from the Tax Laws Bill before its passage.

In FY 2022, the Project assisted the Kenya Renewable Energy Association (KEREA) by reviewing the draft Finance Bill (2021) and proposing amendments (e.g., extending allowances to mini-grid generation investments to serve the government’s goal of promoting rural electrification in off-grid areas), which the government accepted. As a result, the Government of Kenya published a new Finance Bill (2022) in which it did not repeal prior exemptions. The association collected the concerns and petitions of various stakeholders, which PAOP reviewed and submitted to the Departmental Committee on Finance of the National Assembly.

Uganda’s new energy policy and PUE roadmap built on the country’s vision for universal access to sustainable, affordable, and quality energy services for all Ugandans by 2040. In FY 2023, the Cabinet of Uganda approved the Revised Energy Policy for Uganda, 2023, replacing the Energy Policy for Uganda, 2002, which had guided the progressive expansion of investment in SHS, mini-grids, and PUE for the previous 20 years. During Renewable Energy Conference 2022, the Ministry of Energy and Mineral Development acknowledged the Project’s support in providing comments and suggestions on the energy policy. The Project also contributed to the ministry’s new strategy for its National Renewable Energy Platform as well as its National PUE Roadmap, launched in July 2023, which focuses on how the government can operationalize solar-powered agricultural systems (e.g., water pumps and clean cooking devices) and sets clear policy actions and activities to spur electricity demand and economic development. These documents increased awareness among key stakeholders and set timelines for the establishment and implementation of PUE strategies.

POLICY AND REGULATIONS

USAID and Power Africa received a nomination for Development Partner of the Year at the Renewable Energy Conference 2022 in Uganda, which recognized the work of the Project and the East Africa Energy Program to develop an RBF for SHS, review MEMD’s new energy policy, share knowledge, support local companies and the government, and disburse mini-grid and health facility electrification grants.

Mini-grid tariff reviews in Tanzania empowered the regulator.

Starting in FY 2020, the Project assisted Tanzania’s mini-grid sector to navigate regulatory and tariff hurdles. In early 2021, the Minister of Energy compelled all independent power producers, including mini-grid developers, to begin charging a potentially unfeasible price. PAOP worked with stakeholders and the government to advocate for a uniform sector-wide tariff determination with the new Minister of Energy, which resulted in support for reversing the tariffs. The government reassessed tariffs via public–private meetings with developers of the established mini-grid sites.

By the end of FY 2022, three mini-grid developers received approval for the new tariffs for which they had advocated.