Pepukaye Bardouille - Market-Based Approach to Catalyzing Energy Access Lighti

7/31/2019 Pepukaye Bardouille - Market-Based Approach to Catalyzing Energy Access Lighti

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Market-based approach to catalyzing

energy access: Lighting Africa

Pepukaye Bardouille

4th June 2012 / Manila


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Over the next 20 years, Africa will rapidly surpass Asia to

become the largest un-electrified market in the world

2009

2030

13

34 589

698

80921

5

561

Un-electrified

population,millions


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Province Electricity Lantern Tin Lamp Solar Total

KENYA 273,352 5.1% 1,847,613 34% 2,617,593 49% 118,412 2.2% 5,361,334

Household lighting data Rural HH in Kenya

Number of households Kenya 2009 census


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African BOP households and small businesses spend over

$10 billion on lighting p.a - growing to over $11bn

Total annual spend on lighting($,billions)

Average rural HH spends $10 12 per month and $ 120 140 per year


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Significant, unexplored potential in low cost solar lanterns

49%

26%

14%7% 4%

1-5W solar lanterns account for at least 50% of the potential off-grid solar

system lighting market based on the expense of larger solar systems

Price range from $25 - $110

Source: GTZ, SEF, Newenhout surveys across Kenya, Tanzania, Rwanda, Ethiopia, and Uganda. (1) Average market segmentation projections based on purchasingability and on-the-ground expert assessment.

Segmentation of potential market for solar lighting devices


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Technology/business model advancement

Profitability

Business Model Development

Catalyzing mainstream

investment withFinancial Institutions

CONSUMER EDUCATION

MARKET INTELLIGENCE

Proof of concept Maturity

BUSINESS SUPPORT

Break-even

Advisory services Investment

Addressing regulatory constraints

Catalyzing venture

financing

8

Catalyzing market development

QUALITY ASSURANCE


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Lighting Africas approach

The overall approach of the program is to accelerate thedevelopment of off-grid lighting markets by:

1. Demonstrating the viability of the market to companies

and investors

2. Improving the enabling environment for the sector

3. Supporting the scale up and replication of successfulbusinesses


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Programmatic Response

10

Firm

Sector

Standards &

Practices

Policy &

Awareness

Market intelligence

Training

Mobilization of commercial and concessional financing

B2B linkages

Technical assistance

Product quality standards

Best practices and business models for serving the poor

Policy: undertaken by WB

National consumer education and communication

programs


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Results to date:

Number of people in Africa with access to better

Lighting from using solar lanternsEnergy Access2.5m

July Dec 2011 growth rates over Jan June 2011 in

AfricaGrowth rates113%

Number of countries in Africa that manufacturers

have established importers/distributorsEnergy Access14

Number of good quality products available in the

market in Africa

Quality

products14

Number of solar lanterns sold by manufacturers

that have passed LA min quality standardsEnergy Access502k

Replicated the program in India launch 31st May

2012Replication1


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Quality Assurance Highlights

LA invited to sit in an IEC tech committee that is looking to

institutionalize LA standardsPath to standardization1

Ever-expanding coverage of the marketproducts tested94

Allowed to use Standardized Specifications Sheets;

differentiated from other products.

products passed

quality standards29

UNFCCC harmonized with Lighting Africa QTM for carbon

finance (CDM) compliance

institution referencing

test method1

Nairobi, Kenya / California / Germany / New York/ Beijingtest labs5

2012 awards underway now, built on success of 2010product awards

competitions2

Part of the technical assistance to the markettechnical briefing notes7

Ethiopia requires products meet the standards and targets

for import.

government using

standards and targets1


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Key challenges:Lack of finance impeded market growth and expansion:

Manufacturers (based in China/India)

Do not meet IFC investment criteria

Perceived as high risk and suited for impact/social PE

Too small/young for mature PE funds/mainstream FIs

Local distributors Lack collateral to finance additional growth

Unwilling to invest upfront and tie funds for 90 120 days

Ghana low uptake of solar lanterns

High grid electrification/subsidised connections (low marketattractiveness)

Other competing initiatives e,g WB GEDAP & JICA


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Key priorities going forward1. Develop an A2F facility for the supply chain

Developing a $20m inventory facility with FM (Global) Working with BOA Kenya/FM to development a risk guarantee for

local importers

2. Develop a sustainability plan ; includes waste disposal/collection andGreening the products

3. Expansion /replication of the Lighting Africa program in Africa and India

4. Pricing of all our AS provided at firm level (gradually phase out ofsubsidies)

5. Institutionalization of LA standards with IEC

6. Development of a replication/best practice tool kit for other Dev Inst,NGOs etc


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www.lightingafrica.org

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Pepukaye Bardouille - Market-Based Approach to Catalyzing Energy Access Lighti