UNCDF- Renewable Energy Challenge Fund - Uganda

In 2016, at the time of design only20% of the population had access to electricity. In 2021, the access number increased to an estimate of 41.5% with high contribution from hydro power but also solar made a significant contribution to access to electricity. The RECF set out to increase access to renewable energy to 155,000 domestic, productive, and social uses among underserved poor households especially in rural areas of which at least 50 percent are women and 50 percent are youth. This goal was achieved by investing in early stage, high-risk ideas to set energy SMEs on a pathway for larger, more commercial oriented capital. UNCDF, the agreement partner spent 99.8% of all the funds received from Embassy of Sweden of 50M SEK on planned activities for RECF. More than half of the funds at 54% was spent on grants for the 22 clean energy companies to implement energy access to underserved populations. The portfolio of clean cooking and solar partners sold 807,694 units and 8,246 tonnes of briquettes surpassing the total RECF goal of 155,000 new customers. The RECF portfolio is estimated to have improved the lives of more than 4.3 million people with access to clean energy solutions which saves them money, helps generate income, reduces indoor air pollution, reduced burden on women from firewood collection due to many hours spent cooking instead of doing productive work. Also, it was noted that more than half (55%) of the RECF portfolio is comprised of international companies and 45% (10) are Ugandan owned companies. In respect to gender, women are the minority at 32% and male at 68%, but this situation is not peculiar to only RECF. The women owned companies are BM Energy Saving Equipment, Raising Gabdho Foundation, Eco group and Simoshi while Anuel Energy, Engie Energy Access and Village Energy are led by women. It is therefore analysed that, women owned, and women led businesses have great potential for transformational change and it must be coupled with gender targets for the selection of partners. Additionally, tailored technical assistance for women entrepreneurs is likely to remove barriers for womens participation in the sector. RECF aimed at creating 1,300 new jobs, of which at least 60 percent of these jobs are for women and 40 percent are for youth. It is reported that throughout the project duration, RECF partners hired a total of 566 salaried jobs (full time and part time) 43% females and 44% youth employed. Additionally, 2,676 commission based agents and microentrepreneurs were also employed by the RECF partners to support especially with the sales roles at 32% female and 84% youth. Despite the number of full time and part time jobs created being lower than the target of 1,300 jobs, the overall employment opportunities created would be higher if commission-based agents are added. Up to 190,000 tonnes of CO2 emissions was expected to be off set as a result. The clean energy products sold and used by customers have contributed to a reduction in carbondioxide emissions in the atmosphere through the reduction and/or replacement of use of kerosene lanterns, candle wicks, diesel generations, firewood, and charcoal. An estimated 1,514,787 tonnes of carbondioxide was reported which is 8 times more than the target of 190,000 tonnes of carbondioxide have been avoided throughout the implementation of RECF with 99% of this reduction coming from the clean cooking portfolio.

The objective of the RECF is to increase access to renewable energy for domestic, productive and social uses among underserved poor households especially in rural areas. To do so, UNCDF CleanStart will promote financial inclusion on the energy value chain for customers and enterprises investing in early stage, innovative business ideas, the small retailers that sell at the last-mile up to the SMEs that manufacture and distribute products/services higher up the chain.The RECF will support SMEs that have high social returns and market impact, but relatively low to medium financial returns with the aim of making them more financially sustainable whilst also benefitting the target market through scaling up and providing innovative affordable solutions.