For many of us, it’s difficult to imagine life without access to electricity — and harder still to consider the many ways that energy transforms our daily lives.
First, energy is essential for economic activity — whether it is food processing, manufacturing or other forms of industry. Today, most of Africa relies on inefficient and environmentally unsound diesel generators to meet energy requirements for economic activity. For most Africans, this extra energy cost means that they cannot manufacture competitively in a global market. But it’s not just about economic activity. Health facilities need electricity, as do schools, libraries and homes. Electricity is also essential for communications. Yet, according to the International Energy Agency, in 2009 there were 590 million people living without access to energy. In some countries, like Malawi, 80 percent of the population is in the dark.
The common response to this energy challenge is to focus on building large power plants that will supply energy to the national gird, operated by the publicly controlled utility company. This model, drafted wholesale from the U.S. or Europe, might be only part of the best answer for today’s Africa.
More than 600 million of Africa’s population are small-holder farmers living in rural areas. These rural communities — the majority of all Africans — are not likely to be served by the public utilities in the near future…if ever.
What these communities need are “off-grid solutions”… and the good news is that:
• These off-grid solutions often use renewable energy — like solar or hydro or biogas — and the cost of these technologies is quickly coming down, so that off-grid renewable energy is increasingly affordable, even for the very poor;
• Off-grid energy requires less upfront capital investment and can deliver energy quickly; and
• Across Africa, there are literally hundreds of small businesses and community enterprises that are eager to develop affordable, renewable off-grid energy to meet the needs of these underserved communities.
In some cases, these companies are selling household-level solutions — solar-charged lanterns or solar-powered kits that can light up homes and charge cell phones. Others are developing mini-grids so that a small hydro, biogas or solar operation is generating enough electricity to light up the homes and schools and clinics of a community.
What is most striking is that these companies are finding ways to both generate and distribute energy and to collect payment for their services…even in the most remote corners of Africa. And, these companies are using new kinds of technology — to meter use, manage energy distribution, spawn a network of “pay-as-you-go” energy vendors and to collect payments through mobile money.
The U.S. African Development Foundation (USADF), a small, independent federal agency, has taken an important lead in supporting African-owned and managed off-grid energy solutions. USADF supports the economic development of marginalized communities in rural Africa and was quick to recognize that today’s push to build power plants, while laudable, would not reach these rural households today, or anytime soon.
So, USADF teamed up with GE Africa last year to launch the Off-Grid Energy Challenge, part of the Beyond the Grid program included within President Obama’s Power Africa initiative to increase access to energy on the continent and enhance regulatory systems. Initially focused on Kenya and Nigeria, USADF received more than 150 applications in its first round in fall 2013 and provided $100,000 awards to six companies generating and distributing energy to rural communities. These African energy entrepreneurs were using renewable energy to meet a broad range of energy needs.
• Mibawa Supplier Ltd. will expand its delivery of “pay-as-you-go” lighting and chargers to households in rural western Kenya.
• Afrisol Energy Ltd. will utilize bio-digesters to produce electricity to light up a school and neighboring community in a Nairobi slum.
• Solar World (E.A.) Ltd. Is operating solar-powered water points for pastoralists to support the needs of livestock and communities in Kenya’s semi-arid north.
• Transafrican Gas and Electric will power stand-alone cold storage facilities using solar photovoltaic systems for farmers and fisherman in Jos, Nigeria.
• GVE Products Ltd. will electrify 24 off-grid communities using metered solar micro-grid and portable rechargeable battery system.
• Afe Babalola University will investigate a hydro-electric system to light up the university and neighboring community of 10,000 households who currently rely on diesel generators.
In 2014, USAID has joined USADF and GE Africa to launch Round II of the Off-Grid Energy Challenge extending this initiative to Tanzania, Ethiopia, Ghana and Liberia. With more than 300 applications received from African entrepreneurs, the Challenge is on its way to award nearly 20 more awards of $100,000 each to local energy providers — with awards to be announced later this summer!
There is no doubt — much of Africa needs access to affordable energy. Local entrepreneurs, with a bit of support, are inventing new ways to deliver energy solutions to meet these needs. The future is now!
Shari Berenbach is the President and CEO of the United States African Development Foundation. She previously directed the Office of Microenterprise & Private Enterprise Promotion at the United States Agency for International Development, and was President and CEO of the Calvert Foundation.