Philippina Erick in her M-Pesa Agency together with one of her many customers.
Powering Green Development
Only a few per cent of people in rural areas in sub-Saharan Africa have access to electricity. People are forced to rely on kerosene and batteries, solutions that are unreliable, unhealthy and expensive, which are a few of many reasons to why Sida supports Power Africa.
Philippina Erick is a 28 year old woman in the Bukoba region of Tanzania. Encouraged by the arrival of electricity she started an M-Pesa agency in September 2013.
– I am really happy about the arrival of electricity and my new business. I get on average 40 customers per day and make a monthly profit of about 200,000 TSH (about 750 SEK/month). Electricity and being an M-Pesa agent has brought me and my family many benefits. We now have electricity at home and we use if for TV, ironing and lighting.
– That is why Sida works with energy sector development and that is why Sida is a partner to the Power Africa initiative, says Torbjörn Pettersson, Assistant Director General and Head of the Africa department at Sida.
The objective of Power Africa is to double access to electricity in sub-Saharan Africa. Sida has made a commitment to this goal by stimulating increased generation and access to renewable energy.
One of the points of departure for Power Africa is that many governments in sub-Saharan Africa have undergone energy sector reforms. Sweden through Sida has under many decades supported the reform process and contributed to strengthening institutional capacity to make this possible. Today, many countries in sub-Saharan Africa encourage private actors to invest in generation and distribution of electricity. The demands are so big that neither aid nor national development budgets are sufficient to meet the needs. With appropriate policies and regulations in place there are emerging opportunities for the private sector to contribute to the development
– We continue to support sector reform and capacity building, but we are also putting efforts into contributions that can mobilise private capital into the sector, says Klas Waldenström, Counsellor at the Swedish Embassy in Lusaka.
Energy poverty is widespread in Zambia. About three quarters of the country's population has no access to electricity even for lighting, and in the rural areas 95-96 per cent of the population do not have access to electricity.
– In 2016 we took the decision to launch The Power Africa: Beyond the Grid Fund for Zambia. One of our biggest priorities with the Fund is sustainability, says Klas. And by that we mean economically, as well as ecologically. By using this market-based approach, we want to unleash Zambia’s long-term economic potential, as well as helping to bring modern energy to those currently left out.
The 200 MSEK Fund aims to bring modern clean energy access to one million Zambians and jump-start the country’s burgeoning markets for energy services. The Fund will directly support private enterprises in the off-grid energy space through an innovative new results-based financing approach. The Fund is designed around a ground-breaking Social Impact Procurement approach, which offers opportunities for the private sector to contribute to developmental challenges while directly linking financial payment to on-the-ground results.
Alternative solutions for energy
It is foreseen that 60 per cent of new electricity clients in sub-Saharan Africa will not be connected to the national grid but through off-grid solutions, both isolated mini-grids and distributed electricity systems such as solar home systems. Sida has through its contributions to the African Enterprise Challenge Fund’s renewable energy window (REACT) been part of supporting the emergence of enterprises that sell distributed renewable energy solutions. Examples include M-Kopa, Mobisol and Off Grid Electric.
– So far, more than a million customers have gained access to renewable electricity this way, but the potential is tens of millions of customers, says Jörgen Eriksson, Senior Programme Manager Energy at the Swedish Embassy in Dar es Salaam. That is why we continue to be a development partner that catalyses business models that use renewable energy and target poor people. We contribute to the emergence of a market that sees poor people as customers, in a way that the mobile phone industry has done.
Stephen Mwakifwaba, Programme Officer for Energy at the Embassy of Sweden in Dar es Salaam, continues by saying:
– Ensuring safe and reliable access to modern energy services is a key prerequisite for people to move out of poverty. Electricity is needed for example to give children the possibility to study and for families to recharge their mobile phones, a medium where more of both information and financial transactions are taking place. In farming, electricity provides enhanced opportunities for activities such as cooling and irrigation.