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

Programme

Beyond the Grid Fund for Zambia

The Beyond the Grid Fund for Zambia (BGFZ) reached its successful conclusion – the delivery of energy service subscriptions to over 1 million Zambians.

  • Location: Zambia
  • Status: Completed

One MIllion Lives Lit Up

The Beyond the Grid Fund for Zambia (BGFZ) reached its successful conclusion – one million lives lit up. Launched in 2016, the pilot programme was funded by Sweden and implemented by REEEP as an ambitious results-based financing multi-year programme aiming to increase energy access, accelerate private-sector growth in energy generation and distribution in the country, improve livelihoods and catalyse economic activity in rural and peri-urban areas.

BGFZ’s objective was to bring modern affordable energy services to at least 192,000 households – translating to one million Zambians – by 2021. This target was achieved in September 2021, and the results were acknowledged by public and private stakeholders at an acknowledgement event in Lusaka in March 2022.

Building on the success of this pilot, the programme was expanded into the Beyond the Grid Fund for Africa (BGFA) in 2019, which brings the concept to five additional countries along with more financing to further improve energy access in Zambia.

SUCCESSFUL OUTCOMES

BGFZ had four companies in its portfolio including two offering services through solar home systems – Fenix International Zambia Limited (currently part of Engie Energy Access) and VITALITE Zambia Limited, an improved cooking company – Emerging Cooking Solutions Zambia Limited (ECS) and a micro-grid company – Standard Microgrid Initiatives Limited (Zambia). Programme implementation began in July 2017, and by the end of 2022 all companies had concluded their contracts with encouraging results – the BGFZ programme target was overall exceeded, and 71% of the total contracted connection targets were delivered by the four energy service providers.

The EUR 20 million fund was financed by the Swedish Government through the Swedish International Development Cooperation Agency (Sida) and designed as well as managed by REEEP on behalf of the Swedish Embassy in Zambia. BGFZ was comprised of three pillars: i) incentivizing and procuring affordable, sustainable high-quality energy services, ii) the platform for market change executed through the national Off-Grid Task Force that enables close cooperation with the government of Zambia and iii) real-time and data collection and analysis that was handled through REEEP’s custom-built Edison platform.

A SupaMoto sales agent at a demonstration of their clean cookstoves in Lusaka, Zambia.

Credit: Jason J. Mulikta

Young boys watch educational TV powered by their VITALITE solar home system in Kafue, Zambia.

Credit: Jason J. Mulikta

Data from the Edison platform automated much of the key reporting and analysis supporting the results-based payments, including data for business performance and impact monitoring. It allowed for cost-effective real-time snapshots of the market and analysis of market dynamics and trends, as well as understanding customer behaviour over time including sustainability of the energy service provision by the supported companies. The companies would only be compensated for sustained energy services and with the daily data collection enabled by Edison, so the programme was able to ensure that the companies received incentives only for the portion of their portfolio with active sustained service.

The data on improved energy access has also been leveraged for investor engagement and government planning as well as design of additional market-supporting measures in Zambia. Edison is now open source since 2022 and is scaled as a revised version (Prospect) with funding from Sida and GIZ and continues to contribute to improved energy access.

BGFZ Results

BGFZ reached a successful completion and provided quality clean energy access to over one million Zambians by connecting 194,000 households by 31 December 2022 with >50% of the customers living in rural areas and 30% of the primary customers being women. The four companies in the portfolio reached 72% of the total contracted energy service subscriptions, despite considerable disruption and negative impact of the Covid-19 pandemic during 2020 – 2022 which disrupted supply chains, sales activity and increased risk-aversion of funders, particularly in challenging markets such as Zambia. By enabling access to clean energy, the programme also contributed to GHG mitigation with an estimated total annual mitigation of 12,300 tonnes of CO2 equivalent.

Through de-risking, incentivizing and promotion of successful business models for scale-up, BGFZ facilitated long-term sustainable operations and contributed to market development and improvement of sector standards and gender equity. By the end of 2022, Sida had released 91.5% of the allocated BGFZ funds to the four companies which has leveraged a total of USD 50.4 million of finance from the companies themselves as well as from over 25 third-party financiers.

Employment by gender over a six-year BGFZ implementation period (01 July 2017 – 31 December 2022)

EMPLOYMENT

BGFZ enabled the creation of new income-generating opportunities. Within six years, the total number of people employed by the BGFZ companies increased by 555% from the beginning of the programme in July 2017 to December 2022. Special attention was paid to improving the gender balance during recruitment, which increased the share of female employees in direct employment at the companies (full and part-time) from 27% in 2017 to 40% in 2022.

The share of women in management positions of the companies was also improved throughout the BGFZ programme, increasing from 31%  in July 2018 to 41% as of December 2022, while the rise of women in other roles has been slowly but steadily increasing from about 33% to 36% over the course of BGFZ.

Many people have the opportunity to also earn an income as agents for the BGFZ companies by selling solar home systems, improved cooking stoves or Power Time packages to households powered by a micro-grid. Agents typically earn a commission for each sale made as well as for maintaining steady payments from their customer portfolio along with sales training and opportunities for skills and career development.

An aerial view of Bisanti Village, Katcha LGA, Niger State Nigeria. PFAN supported Green Village Electricity (GVE) provides 7,400 households in thirteen rural communities including Bisanti with reliable access to electricity.

Credit: ARDA for REEEP

SOCIAL IMPACT

A 60 dB verification and customer survey published in May 2020 shows that the companies in the BGFZ portfolio are reaching underserved and low-income population of Zambia with 60% of customers living below USD 3.1/person per day. BGFZ has proved to be addressing a gap in the market as 86% of the surveyed customers reported that they could not easily find a good alternative to the companies’ products and services while 85% of the customers were accessing the service for the first time with candles and torches being the most common prior sources of lighting.

BGFZ companies with their products and services have contributed to improving the livelihood of the Zambian people with 96% of the customers responding to have had experienced an improvement in their quality of life while 83% of the respondents said that their life has “very much improved”. The services provided have also created some income-generating opportunities with 9% of customers indicating that the services enabled them to generate income. 95% of these customers make additional income at their homes, and others in shops, bars, poultry and a hospital.

The OFF-GRID TASK FORCE

The platform for market change was designed to amplify learning between stakeholders in the off-grid energy market and coordinate with relevant stakeholders such as government, donors, financiers and private sector actors to promote synergies and avoid duplication of efforts, provide market information, coordinate capacity and awareness building and meet specific needs of the private sector providing off-grid energy solutions to rural and peri-urban areas in Zambia. With support from REEEP, the platform for market change in Zambia was formalised as the National Off-grid Task Force (OGTF) in February 2018 to provide a focus for coordination and oversight of initiatives designed to raise the profile of the potential of the off-grid sector in Zambia and deliver increased energy access, particularly in rural areas, in line with the objectives of the Zambian Government.

The Task Force aims to ensure that investments – both public and private – achieve transformational change in the lives of the rural populace by expanding access to clean and sustainable energy and growing the markets. It serves as a hub for the exchange and dissemination of experience and information from programme implementation, policy developments and a forum in which participants come together to share information on interventions, opportunities and barriers to market growth. Furthermore, it is action-oriented and helps ensure that the various activities of government and the donor community are properly coordinated and that private sector investments are optimally targeted and structured, to leverage the available resources and increase the growth of the market and promote investment opportunities. The Rural Energy Agency (REA) in Zambia was also supported by REEEP to adopt Edison for programme monitoring and data management as it has increasingly cooperated with the private sector towards increasing energy access. Pilot implementation is now being continued by the Prospect team.

In 2022, the Zambian OGTF serves as a model for the eventual replication of the concept in all countries of operation for the Beyond the Grid Fund for Africa (BGFA), with the implementation partner NIRAS launching the stakeholder engagement activities this year towards structuring similar platforms in Burkina Faso, the Democratic Republic of the Congo, Liberia, Mozambique and Uganda. We expect the Zambian government to stand as a role model and be able to share their experience and best practice with peers in other countries in the coming years.

The 8th Task Force meeting was held on 15 March 2022 which set up the action items for the year ahead and provided an update on ongoing efforts in the off-grid sector by the OGTF members.

BGFZ Verification & Customer Insights

60 Decibels, a global, tech-enabled impact measurement company conducted an independent verification of the Beyond the Grid Fund for Zambia (BGFZ). In April 2021, the team completed over 600 phone surveys with randomly selected customers of four participating Energy Service Providers (ESP) across Zambia. In addition, for 12% of the total sample, 60 Decibels commissioned in-person surveys through a partner. The objective was to verify the Energy Service Subscriptions (ESS) offered by the providers under the fund and to capture customer insights, including profiles, feedback, impact, satisfaction and experience.

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