Reeep Annual
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  1. REEEP Annual Report 2022
  2. Beyond the Grid Fund for Africa

Programme

Beyond the Grid Fund for Africa

Establishing up to 1.44 million energy connections by 2028 to benefit more than 6.5 million people in Burkina Faso, the Democratic Republic of the Congo, Liberia, Mozambique, Uganda and Zambia.

  • Location: Sub-Saharan Africa
  • Status: Ongoing

Clean energy access in Zambia: VITALITE

About BGFA

Over 600 million people in sub-Saharan Africa live without access to electricity. The Beyond the Grid Fund for Africa (BGFA) aims to reduce this gap by stimulating and accelerating new business models to incentivise the private sector to offer affordable and clean energy access at scale to people living in rural and peri-urban areas. BGFA was established in 2019 as an initiative of the Swedish Government – building on REEEP’s successful, award-winning pilot in Zambia, the Beyond the Grid Fund for Zambia (BGFZ) – and is facility managed by the Nordic Environmental Finance Corporation (Nefco).

Today, BGFA is a multi-year funding facility aimed at expanding BGFZ’s approach into new sub-Saharan African countries and kick-start markets for clean off-grid energy. By enabling the scale-up and greater deployment of energy access solutions in different markets, the programme aims to create long-lasting change. It works through a combination of an innovative results-based financing mechanism for energy companies, close cooperation with governments and real-time data collection and analysis. The BGFA programme aims to establish up to 1.44 million energy connections by 2028, benefiting more than 6.5 million people.

It is currently operating in six African countries

  1. Burkina Faso
  2. Democratic Republic of the Congo
  3. Liberia
  4. Mozambique
  5. Uganda
  6. Zambia

KEY ACHIEVEMENTS IN 2022

In 2022, 13 companies were contracted in 4 sub-Saharan countries. Their projects are expected to establish 953,000 new energy service subscriptions in the coming four years, which have the potential to provide clean energy access for 4.8 million people in rural areas of Burkina Faso, Liberia, Uganda and Zambia. The BGFA programme has committed EUR 25 million in results-based financing to these 13 investees, which in turn are seeking to mobilise EUR 80-100 million in additional funding over the lifetime of the agreements, scheduled to end in 2027.

REEEP’s work on BGFA

REEEP’s work on the BGFA programme falls primarily under the five mandates of market scoping, window design, shadow evaluation, due diligence and technical assistance

John, who works VITALITE Headquarters in Lusaka, speaks with, a VITALITE sales agent and customer in the rural area of Kafue, Zambia.

Credit: Jason J Mulikita

In 2022, REEEP supported the launch and implementation of EUR 20.7 million funding window in Uganda (BGFA3) by conducting shadow evaluations and due diligence of companies shortlisted for a potential contract. Similarly, REEEP supported the launch of the EUR 15 million BGFA4 funding window in DRC by conducting market scoping, developing the design of the funding window and contributing to the development of the BGFA guidelines and tailoring the awarding process and design appropriate for the DRC market. We also continued the preparation of the EUR 6.7 million BGFA2 funding window in Mozambique by liaising with government stakeholders and identifying mini-grid clusters for bidding under the funding window.

With the additional funding by Norway in 2022 and resulting shortlisting of additional companies for funding under BGFA1 in Zambia, Liberia and Burkina Faso, REEEP conducted due diligence on these companies including standalone, mini-grid and productive use players. REEEP also designed and mobilised the technical assistance component of BGFA and continued to support Nefco on programme advisory regarding various aspects of design, market developments and technical components supporting the implementation of the programme.

BGFA 1

The village Headwoman and her husband display their RDG solar home system power unit in Chimombo, Zambia.

Credit: Jason J. Mulikita

Burkina Faso, Liberia and Zambia

 

Technical Assistance

Last year, REEEP commenced the BGFA technical assistance component by structuring the approach, setting up processes and establishing an institutional framework for the implementation of technical assistance between BGFA partners. BGFA technical assistance (TA) will support the companies throughout the whole implementation period. TA is need-based and adaptive to changing circumstances of the company and the market. The first needs assessments were conducted for ten companies contracted by the end of 2022, and the first assignments focused on gender, environmental management, integrating IFC performance standards into company policies as well as support with improvement of financial models.

Going forward, REEEP will support the companies with, among other things, aspects of strategy, recruitment, performance management, development and implementation of gender action plans, setting up environmental and social management policies and systems (ESMS), fundraising, improvement of operations through SOPs, understanding the policy requirements, implementation of security plans as well to taking on opportunities for productive use of energy. REEEP is also leveraging its capacity as the implementation partner of the Private Financing Advisory Network (PFAN) for supporting the ability of companies to secure additional finance for growing their business and assist in meeting the BGFA co-financing requirements.

Due Diligence

REEEP completed the due diligence process for the 21 companies initially shortlisted under the BGFA1 funding window. Twelve of these were successfully contracted by Nefco and are now under implementation. In 2022 specifically, REEEP conducted due diligence for eleven Energy Service Providers (ESPs) with seven ESPs being successful and contracted by Nefco in 2022. Thanks to Norway’s contributions to BGFA, additional resources were made available to undertake due diligence on high-scoring BGFA applicants under BGFA1.

BGFA 2

Mozambique

In 2022, REEEP continued the preparatory work for the launch of the mini-grid-focused funding window in Mozambique. In collaboration with Greenlight Africa and FUNAE, REEEP identified clusters of mini-grids that will be available for bidding under the funding window, and the ESPS to be contracted under BGFA2 are expected to be granted a concession license under the new policy for off-grid areas (published in 2021 and expected to be operationalised soon).

REEEP also continued to liaise with other programmes on initiatives and market information as part of the private sector coordination group of the Energy Sector Working Group in the country.

 

BGFA 3

A seller from d.light, one of the two companies in Uganda contracted under BGFA in 2022.

Credit: d.light

Uganda

Public Sector Engagement

To ensure that the activities and plans of applicant firms to BGFA3 synchronize and complement national-level strategy, REEEP continued fruitful and collaborative engagement with key regulators and governmental bodies in Uganda throughout 2022. As the activities and deployment of mini-grid companies were of the highest priority, REEEP liaised with the Rural Electrification Agency (REA), which was later reformed as the Rural Electrification Program (REP) and re-absorbed under the remit of the Ugandan Ministry of Energy and Mineral Development (MEMD).

In addition, REEEP continued communication with the Electricity Regulatory Authority (ERA) in Kampala regarding key intersections of their work with mini-grid planning and rollout and collaborated and communicated with donors, implementing organisations and counterpart programs working across the country.

Due Diligence

Due diligence was undertaken on companies under the BGFA3 funding window in Uganda. This process involved analysis of documentation, discussion with company management and, in some cases, visits to sites or facilities. Eleven applicants to BGFA3 went through most, or all, steps of the due diligence process throughout the course of 2022, with one ESP being contracted by Nefco in 2022.

BGFA 4

Although it’s located along on a street with access to the national power grid grid, it is more affordable to use Vitalite solar home systems to light a general store in the 10 mile area of Lusaka, Zambia.

DEMOCRATIC REPUBLIC OF THE CONGO

 

Market Scoping

An in-depth country assessment was undertaken involving interviews with public officials, private sector actors, companies, sector associations, non-governmental actors and international development actors, as well as a hybrid, in-person and online workshop.

The market scoping covered the standalone solar and mini-grid sub-sectors and aimed to identify the level of maturity and readiness of the private sector off-grid players, challenges and opportunities of the market, and an analysis of ongoing and planned market support mechanism to ensure that BGFA activities were complementary and not duplicative. The study informed the BGFA4 funding window design in terms of sector focus as well as programmatic aspects embedded in the programme guidelines.

 

Window Design

A joint workshop with Nefco was held in Vienna to design the funding window based on the conclusions and findings of the market scoping exercise. This resulted in defining a single funding lot where technologies would compete with each other, in contrast to earlier BGFA funding windows that have separated funding lots. This is expected to offer valuable insights into the maturity, competitiveness and efficiency of the variety of technologies, business models and players on the market as well as direct the use of public funds to those models and technologies offering the best value for money in a market where the potential for impact and need for incentives for all the range of technologies is high.

Call Launch

BGFA4’s Pre-qualification stage was launched in June 2021, and a follow-up launch of the final application stage was held in Kinshasa in November 2022. The mission to Kinshasa in November was also an opportunity to launch the initial conversations to set up an Off-grid Task Force with local market players and governmental authorities.

Supamoto clean energy stove ellers the outskirts of Lusaka, Zambia.

Credit: Jason J Mulikita

PROGRAMME-WIDE

REEEP contributed to BGFA with a variety of programme advisory actions including setting up standards and requirements for gender, monitoring, reporting & verification (MRV), market stakeholder engagement, policy advisory as well as sharing lessons learned on setting up institutional frameworks and processes for replicating the Off-Grid Energy Taskforce concept from Zambia in other BGFA countries.

REEEP also contributed to an evaluation conducted on BGFA’s offer to the market as well as on the efficiency of the process from launch to contracting. Furthermore, REEEP participated in the two BGFA Steering Committee meetings held in May and November 2022 respectively, engaging with Nefco, donors and other programme partners on the status, progress and next steps for the programme.

Events

BGFA Annual Report 2022

The inaugural Beyond the Grid Fund for Africa Impact Report highlights the key achievements of the facility in 2022 in accelerating off-grid energy services by providing results-based financing for energy service providers in sub-Saharan Africa.

Download Report

Donors