Access to energy not only provides more hours of daylight, with the option of converting them into productive hours, study hours, or security for the entire family. Access to energy also allows you to charge your mobile phone, which in turn opens up the possibility of paying for essential products in small installments, making them affordable, or access to distribution systems for products such as improved stoves, which improve the domestic economy and health. In addition, it makes it possible to purchase solar-powered products as critical as solar irrigation pumps or refrigerators, which in turn improve the productivity of agricultural and food systems, again increasing income generation and impacting quality of life. A virtuous chain that is only possible with access to energy, to which a few years ago more than 1.2 billion people did not have access.
Things have improved a lot and companies marketing solar energy generation products have managed in the last 15 years to establish an industry capable of serving almost 500 million people and create 500,000 jobs. This has represented a huge leap towards achieving sustainable development goal number 7: accessible and clean energy for all. A great achievement for the social entrepreneurship sector that I doubt would have been achieved so effectively, efficiently and quickly without being led by the private sector.
Today, still 675 million people They live without access to this essential resource. 75% of them are found in just 16 countries, and 80% are in sub-Saharan Africa. Their lives are out of the spotlight and they lack the opportunities that electricity could provide them. These countries, the least developed economies, with electrification rates at or below the sub-Saharan African average and high poverty rates, still rely on kerosene, charcoal, wood, oil and diesel for poor, expensive generation. and polluting, essential energy for your life, which also contributes to deforestation and global warming.
Given the lessons learned in these 15 years, an increase in investment could illuminate their future and forge paths out of poverty. The risks are many: very challenging, always changing operating environments, with high uncertainty, poor infrastructure (with more than half of the population without access to a practicable road), very weak currencies and unstable governments and policies. But we can't wait any longer.
Therefore, actors like Acumen and the Green Climate Fund (GCF), together with other allies, have dared to launch the Hardest-to-Reach Fund, a fund of 250 million dollars (about 230 million euros) to generate access to clean and affordable energy in underserved markets in sub-Saharan Africa . A boost not only to the development of these countries and tackling poverty, but also to the fight against climate change. The fund will draw on the experience of Acumen (a non-profit venture capital firm), which has already invested in 40 companies that provide energy access to low-income communities, positively impacting more than 223 million people and avoiding the emission of 58.5 million tons of CO2.
Hardest-to-Reach is the first blended finance initiative dedicated exclusively to expanding access to clean, affordable energy for low-income people in underserved markets in Africa. It also does so through flexible financing that prioritizes impact.
These investment initiatives also generate important lessons for the global energy industry. Demand in Africa has doubled in the last 15 years and according to this firm, could grow almost eightfold by 2050. According to Benjamin Attia, Energy Transition researcher at consultancy Wood Mackenzie: “The evolution of sub-Saharan Africa's energy business model, both on-grid and off-grid, will fundamentally reshape the trajectory of global electricity demand and will be essential for the energy transition. , providing important lessons for the next iteration of utility business models globally. The future of energy can be forged there.”
Add Jacqueline Novogratz, founder and CEO of Acumen: “There is currently a planet-sized market failure impeding the future of clean energy in Africa.” “That's not just a loss for the hundreds of millions of people directly affected by limited access to electricity; the entire world loses by leaving Africa behind. Bringing clean energy to those who do not have it today is one of the most powerful things we can do, both for adaptation and long-term mitigation.”
In 2017, some 1.2 billion people did not have access to electricity. Today there are 675, a little more than half, thanks mainly to private investment. Do we continue to question the market or do we rely on it?
You can follow Future Planet in x, Facebook, instagram and TikTok and subscribe here to our newsletter.
#future #energy #Africa39s #forgotten #countries #depends #market #failure