Improving Livelihoods through Clean Energy
Power Africa sees renewable energy as the most promising approach for meeting the energy needs of people who live beyond the reach of national grids. More than just a means to generate electricity for lights, clean-energy technology can power appliances for work, leisure, and healthcare in places where grid power is unreliable or unavailable. Like a growing number of investors, businesses, and donors that aim to improve energy access, Power Africa is prioritizing productive uses of energy — or PUE — as a pillar of our electrification initiatives.
PUE refers to activities in which people use electricity to produce goods or offer services that generate income. Recognizing solar energy as key to powering low-carbon development, Power Africa is helping off-grid solar companies pilot a range of business models and products that enhance productivity through solar power. Devices like solar-powered water pumps, mills, dryers, and refrigerators can become capital for businesses operating beyond the grid, enabling more people to earn an income, work efficiently, and eliminate expensive and polluting diesel generators. In helping to increase the availability of renewable energy — and the technology that can use it productively — Power Africa shores up local economic development by diversifying the types of commercial activities that clean energy can power.
Solar-powered devices promise to be especially transformative for farmers, enhancing their productivity and income while saving labor. Smallholdings account for around 80 percent of all farms in sub-Saharan Africa and employ 60 percent of people in this region, most of whom live rurally.
Off-grid solar products can be deployed quickly where farmers live and work, helping them increase their yields and deliver greater volumes of food to often distant markets — through mechanized processing, preservation with cold storage, and electrified transportation — without needing a grid connection.
To introduce off-grid technology where it is not readily available, Power Africa helps governments, off-grid energy suppliers, professional associations, clean energy investors, and financial institutions to understand actions that each can take (or work together) to develop the market for specific products.
Lighting Global estimates that the value of the market for productive appliances in sub-Saharan Africa is at least $734 million, with irrigation, cooling, and agri-processing equipment (like crop dryers) in highest demand.
With the availability of financing, this market value can increase by orders of magnitude. To serve and grow this market, Power Africa offers a suite of technical assistance to organizations promoting productive uses of energy and issue grants to pilot relevant technology.
Serving women’s demand for productive devices is good business
Gender equality cuts across all of Power Africa’s electrification initiatives. Different patterns of asset ownership between women and men, unequal distribution of labor, and distinct product preferences require strategies to deliver the benefits of clean energy to women and men equally. Power Africa advises off-grid energy companies and national electrification agencies how to develop such strategies.
Simusolar, which supplies technology to farmers and agribusinesses in Tanzania and Uganda, sought advice to get a more balanced understanding of its market. Power Africa helped Simusolar assess the market and develop a bespoke gender strategy to increase the share of female farmers who engage in productive uses of energy. Power Africa also published a roadmap that clean energy companies can use to promote gender equality through their business strategies. Power Africa’s research shows that gender inclusivity in off-grid energy services can increase women’s income up to 11 times, extend a company’s market reach, improve sustainability, and enhance financial performance. Our analysis of off-grid solar companies in the Democratic Republic of Congo and Kenya shows that gender inclusivity improves customers’ satisfaction with off-grid solar products and unlocks new sales avenues.
Power Africa is also assisting productive use initiatives involving women in the Sahel region. Because female and male farmers in Africa often work with distinct types of crops, solar water pumping is emerging as a product that helps female farmers adapt to climate change.
In Niger in 2022, Power Africa helped Benalya Group develop a business model to design and install solar greenhouses adapted to the Sahel’s climate. Thanks to more than $100,000 in funding from the Energy Saving Trust that Power Africa helped Benalya to secure, the company installed its greenhouses equipped with solar-powered irrigation in the arid Tillabéri region, and trained local women’s groups to produce and market crops efficiently.
In Niger more widely, Power Africa is supporting the Federation of Market Gardening Cooperatives of Niger (Fédération des Cooperatives Maraîchères du Niger [FCMN-NIYA]), one of the country’s largest horticulture federations comprising 42,055 farm managers, including 14,410 women making up 34 percent of its members. Power Africa is connecting the federation’s members to PUE suppliers like Ecozen to help them obtain solar pumps, dryers, and refrigerators.
Also in West Africa, Power Africa is supporting the Government of Senegal to incorporate PUE into its agricultural development programs. With Power Africa’s assistance, Senegal’s Delegation for Rapid Entrepreneurship of Youth and Women has piloted solar irrigation and agri-processing in 53 off-grid villages in the commune of Medina Cherif, where women’s farmers’ groups will use the new equipment to boost crop yields and improve livelihoods.
In Mboro, in western Senegal, Power Africa advised a public-private partnership between the Ministry of Agriculture and DiamaTech how to outfit a vocational training center for young agri-preneurs with solar irrigation, processing equipment, and a cold room. Each year, the center aims to support up to 1,000 trainees comprising women and young people. Both initiatives enable those living rurally to add value to their harvests, understand best practices in agriculture, and use agricultural appliances powered by renewable energy.
Power Africa’s publications equip companies promoting PUE with the knowledge they need to become champions in African markets
- Catalogs of PUE products in 12 African countries
- Comprehensive market assessment of PUE in Liberia (with more countries coming soon!)
- Off-grid solar market assessments for 12 African countries
- Off-grid market-assessment briefs
Promoting PUE adoption in Africa requires more investment, appropriate business models, and sound financial projections
Supplying solar-powered devices for productive use is a capital-intensive business and companies in this industry often need external funding to stock their inventories and distribute their goods to the last mile. Equity investors are selective about the businesses they work with, particularly as the cost of debt increases internationally. Our technical assistance to off-grid solar companies focuses not only on helping them secure financing, but aims to ensure that they introduce the right products into the market and win investors’ confidence in their business case.
Looking to offer productive appliances through PAYGO?
Take advantage of Power Africa’s financial-modeling tool for off-grid companies, and 12 lessons how to optimize your financial models and unit economics.
Recognizing PUE companies’ need for capital to discover business models that work, Power Africa disbursed $669,330 in grants to five solar energy companies operating in Liberia. In 2020, Power Africa awarded more than $1 million in grants to deploy investment products and financial structures for off-grid energy. This grant helped Mirova SunFunder, a Power Africa partner, organize investments worth $11.5 million for SunCulture, which supplies solar-powered water pumps. As Africa’s first syndicated and largest debt facility for productive devices powered by off-grid solar, this investment deployed more than 8,000 solar water pumps in East Africa.
A productive use of energy that offers social benefit and promising returns for investors is electric transportation (or e-mobility). Power Africa and Open Capital Advisors played our part to help Zembo — a Ugandan company whose electric motorcycles run on renewable energy and produce no carbon emissions — raise $3,689,953 in equity from InfraCo Africa (part of the PIDG Group, a Power Africa partner), DOB Equity, and Mobility 54 Investment. The company has sold and leased 200 e-motorcycles using a PAYGO model and set up 20 solar charging stations in Kampala. These charging stations allow riders of Zembo’s motorcycles to swap their batteries quickly, getting them back on the road almost immediately. Zembo’s successful business model serves drivers of boda-boda, the motorcycle taxis present in many other urban centers across the continent.
Powering social services and industry without emissions
With no harmful emissions at the point of use, off-grid solar power combines flexibility, cleanliness, and economic utility to create hubs where people come together to enjoy different services. OffGridBox, a Power Africa partner, demonstrated these advantages when it electrified rural clinics as part of our $2.6 million healthcare facility electrification grant. The company’s containerized solar energy system generates not only power and clean drinking water for the clinics, but also extra energy. OffGridBox allows local entrepreneurs to use its excess electricity to manufacture crafts and clothing. These entrepreneurs take equipment such as welding torches and sewing machines to the facilities and gain access to power from the solar energy systems.
To bring such innovation to more people in Africa, Power Africa will keep aiding companies and governments to invest in PUE to improve livelihoods.
