Power Africa - Beyond the Grid Fund Zambia (REEEP)

Beyond the Grid Fund for Zambia (BGFZ) was  launched in 2016 by the Swedish Embassy in Lusaka with the aim to radically expand access to clean off-grid energy, such a home solar systems and mini-grids, in rural and peri-urban Zambia. BGFZwas  co-designed by the Renewable Energy and Energy Efficiency Partnership (REEEP), and Sweden. In Zambia, BGFZ has kick-started a market for affordable, reliable and clean energy services provided by the private sector. Using an innovative results-based financing and risk-sharing approach called Social Impact Procurement, the Beyond the Grid Fund for Zambia (BGFZ) has awarded results-based contracts to four companies with pro-poor business models deemed ready for rapid scale-up. In two years these companies have connected nearly 800 000 people to basic electricity services. This is in all Zambian provinces, even the most remote areas. The Fund’s companies have also created 1500 new jobs and raised USD 24 million in co-financing. . In addition, the fund works closely with the government, the renewable energy industry and other development partners in its efforts to build a thriving market for off-grid energy services.  The fund is now being expanded to more countries in Sub-Saharan Africa. BGFZ has exceeded the expectations regarding access to basic electricity services. This contribution is specifically for the services provided by REEEP during the first phase of the BGFZ.  REEEPs role in the programme has been essential. Sida kept overall control of the programme development while  REEEP provided competent support in key areas such as monitoring and follow up of the contracted companies, as well as market scoping, and dialogue with market actors, public and private. The services covered  the design of the procurement round (in dialogue with Sida and with support from e.g. the USAID Power Africa); support to the embassy in the due diligence and contract award process and during implementation and follow up of the contracts. REEEPs assignment also included support to the off grid energy coordination platform in Zambia (Off Grid Task Force).  

(For Open Aid) The intervention aims to design and set up of a new fund for large-scale funding of renewable off-grid energy ventures in Zambia that offers access to renewable energy services to households, businesses and public institutions. Sweden through Sida wants to promote investments in off-grid electricity supply in Zambia by promoting ventures that can cater to the needs of poor people and pave the way for further investments in sustainable energy. A focus on Energy Services, should take into account that access to energy is not an end itself. Arguably it is how you put the energy to use that really matters – perhaps reading under a LED light at night to further your education; chilling your milk to be able to sell it on to the market; cooking from biogas instead of collecting firewood, or starting your very own local IT-business. As much as needs are likely to differ, various quantities and qualities of electricity can be supplied to consumers at varying levels of affordability. As part of its development cooperation portfolio, Sida and the Embassy of Sweden in Lusaka is launching a funding facility to increase access to secure and sustainable energy in Zambia by spurring innovation and leveraging private and public investments in renewable energy outside the national grid. The facility will be open to all relevant industry actors. The envisioned approach is to stimulate the emergence and entrance of new business ventures beyond the grid, while at the same time demonstrating their sustainability over time. The selected ventures may include power generation, distribution and service provision from renewable sources of energy, or investments in efficient use of energy. Barriers for market entry to the Zambian energy sector remains high and are compounded by lack of adequate planning for generation and distribution of electricity. Regulation in the sphere of off-grid energy is unclear an may hinder market development. A sparsely populated countryside and high levels of poverty require pro-poor business models to reach substantial scale before being able to turn a profit. The main outcomes of the intervention are expected to be: - Increased access to modern renewable energy and electricity off-grid. - Reduced dependence on fossil fuels and avoided greenhouse gas emissions through a shift to renewable energy sources in Zambia. - A growing confidence with banks to extend credits to off-grid business ventures - Technology and knowledge transfers that develop the energy sector of the country.