How can we harness business to close the energy gap in Africa?


(Christopher Camponovo) #41

Business has to be part of the solution. Closing the energy gap absolutely, without any doubt requires private investment - state-owned utilities are clearly not only up to solving the problem, but many would argue that they're actually a big part of the problem....inefficient, ineffective and often rent-seeking in all of the worst possible ways.


(Rodger Chali) #42



Christopher Camponovo said:

There are so many ways that the energy gap impacts life - and business - in Africa, that it's almost the wrong question to ask. The better focus is on what development advancements could be made by increasing access to reliable, cost-effective power to Africans - or more a propos to this forum. How will closing the energy gap reduce poverty...?

I think its important to hear the full impact of energy shortage in Africa- yes we know its there but how? Hence the question is relevant.


(Robert Laporte) #43

If u eliminate political participation then u eliminate the red tape and most of the obstacles. Business to business is faster and more productive




Christian Spano said:

One of the challenges I see for African countries in closing their energy gap is the momentum that needs to be maintained in terms of political drive and investment to keep the physical infrastructure being built continuously both in transmission and generation capacity. One response that is usually suggested is to complement that big centralised effort with decentralised energy projects e.g. solar but that also shows other challenges such as maintenance costs, scale, etc…what’s your take on that?


(Christian Spano) #44

For large companies their role as core clients providing the cash flow supporting new generation capacity is key, however for that to happen a strong institutional infrastructure is needed in advance...

For smaller SMEs commercialising decentralised low carbon technologies leveraging their knowledge of local markets and local networks (people) could make a significant contribution...


(Tim McNeill) #45

We see that businesses increasingly tend to see the energy gap as a new market and an opportunity. The almost $40billion spent on expensive, low quality product can offer a considerable market.

There are 3 main channels businesses can be a part of closing the energy gap… either at the (i) household level with small products offering a robust, affordable and value proposition; (ii) at the community level with mini-utilities/grids or at the (iii) grid level (but in sub-Saharan Africa still serving only circa 30% of households).


(Zahid Torres-Rahman) #46

Conall - that's a powerful example - thanks for sharing.

Conall O'Caoimh said:

Last Fri at a Virgin Unite event in London Claire Reid founder of Reel Gardening, SA, said that because she faced so many power outages (in J'berg) she had taken some of her production processes back to manual labour.

http://www.reelgardening.co.za

(Robert Laporte) #47

Thanks, i found myself on the type of page i was seeking, this is great!




Zahid Torres-Rahman said:

Hi Robert. The easiest way to stay on top of the discussion is to track the feed on the right hand side of this page. Click on the the word “replied” after the name of the person commenting to be directed straight to their comment. The comments in this central panel are in time order. Also - we’ll be doing a summary of all this afterwards!


Robert Laporte said:

First time user, and just cannot seem to figure out how to follow and participate in the discussion. Looks like every time a person says something u need to click on their reply and be redirected to their site. Is there not a single pane where we can follow and enjoy all conversations?

(Rodger Chali) #48



Christopher Camponovo said:

Christian - I'm one of those people who argues that central utilities are not the sole solution...and, as you say, there are a number of challenges with smaller distributed generation projects. One of the biggest problems is one you haven't mentioned -- that is, coming up with commercially viable models that can be financed. The challenge is that the traditional project finance model isn't working for these smaller projects in Africa -- due largely to actual and perceived risk on the part of lenders....

I guess this is where business can be part of the solution...by developing innovative financing models and promoting distributed generation to close the Africa energy gap.

" I'm one of those people who argues that central utilities are not the sole solution" This is where the major problem of African energy shortage lies. Central Utilities are usually government controlled and suffer from dis-investments.


(Zahid Torres-Rahman) #49

Great - thanks for joining the discussion today, Robert!

Robert Laporte said:

Thanks, i found myself on the type of page i was seeking, this is great!


Zahid Torres-Rahman said:

Hi Robert. The easiest way to stay on top of the discussion is to track the feed on the right hand side of this page. Click on the the word "replied" after the name of the person commenting to be directed straight to their comment. The comments in this central panel are in time order. Also - we'll be doing a summary of all this afterwards!


Robert Laporte said:

First time user, and just cannot seem to figure out how to follow and participate in the discussion. Looks like every time a person says something u need to click on their reply and be redirected to their site. Is there not a single pane where we can follow and enjoy all conversations?

(Charlotte Minvielle) #50

Thanks for an interesting discussion. Mercy Corps is launching an important access to energy programme in Liberia 'Light Up Liberia' and we'll be discussing this at the Just Festival: http://just-festival.org/events-at-just-festival-2015/2015/5/29/light-up-liberia-i-mercy-corps-i-talks


(Tim McNeill) #51

...(i) at the household level, it's worth noting that a big potential market does not necessarily equal a big market. Excellent marketing is often vital to build consumer confidence, a solid and viable last mile distribution network and financing is important and of course a conducive regulatory environment.

(ii) some of this also stands to reason at the mini-grid level. Most important though is that conducive legal and regulatory environment.

(iii) and again for larger scale grid projects - the projects are there and the reasons to invest, but again the right policy framework must be in place.


Tim McNeill said:

We see that businesses increasingly tend to see the energy gap as a new market and an opportunity. The almost $40billion spent on expensive, low quality product can offer a considerable market.

There are 3 main channels businesses can be a part of closing the energy gap… either at the (i) household level with small products offering a robust, affordable and value proposition; (ii) at the community level with mini-utilities/grids or at the (iii) grid level (but in sub-Saharan Africa still serving only circa 30% of households).


(Andrew Scott) #52

To answer the second question we first need to recognize that there are differences in energy markets. For thermal energy there is a household market for fuels and cook stoves, which can be quite different from the market for fuels and equipment for commercial thermal energy, e.g. for agro-processing.

The markets meeting the demand for energy services from electricity are also segmented: for off-grid stand-alone systems the market is for appliances or devices; for mini-grids the market is both in the generation and distribution of electricity. The markets for small, medium and large-scale grid electricity have differences.

We also need to recognise existing expenditure on energy devices and fuels, and the extent to which the businesses will be substituting existing energy suppliers and the extent to which new markets (due to increased incomes and population). The expenditure of low income households in sub-Saharan Africa is tens of billions of dollars a year.


(Zahid Torres-Rahman) #53

Thanks for joining the discussion, Charlotte - and for sharing details of what sounds like a great event.

Charlotte Minvielle said:

Thanks for an interesting discussion. Mercy Corps is launching an important access to energy programme in Liberia 'Light Up Liberia' and we'll be discussing this at the Just Festival: http://just-festival.org/events-at-just-festival-2015/2015/5/29/lig...


(Robert Laporte) #54

Energy, water, and resource conversion loans are the most viable and economically rewarding solutions to most of the world’s problems. In Canada we are proving the business model and will be expanding this to Africa in the coming months. We work through the Cdn Embassy, we eliminate corruption by focusing on the non-corrupt opportunities (yes even in Canada and US the corruption and kickbacks are shocking!) and we partner with educational institutions to expand the network and offer experience to those who want employment in this area


(Christian Spano) #55

Thanks Christopher, I think you are right, business models that attract funding are key.

We did an assessment for an African country and there was so much regulation and subsidies that was very hard to put together a commercially viable business model for decentralised generation serving low income families.

One way to look at this is via a systems lens...many participants in this conversation see the benefits of accessing energy in health, education and other...should we build the business case taking into consideration those benefits too? or, would be overcomplicating things even more?


(Conall O'Caoimh PMIA) #56

I am surprised noone has replied to this. There are many many ways business is essential to solving the problem.

Firstly the energy has to be generated. So business has a big role there. Hopefully through sustainable means.

And then every business in Africa, and every home, will benefit from the reliable availability of energy. It will enable more efficient production, greater competitiveness. Energy production will be less wasteful (not small diesel generators) so less polluting, but also cheaper for the companies that make and buy it. This will all mean more markets can be won at home and abroad,

With energy available Africa’s rich resources can be processed at source - adding value locally - e.g. turning African cotton into African made garments. E.g. Madecasse chocolate earns 4 times more for Madagascar compared with selling raw cocoa beans.

This will in turn lead to greater employment - for the workers to take home to their energy connected homes.


(Robert Laporte) #57

We have established a financial model that works in Canada and can be easily applied anywhere in the world. The risk factor lies in the technology rather than the borrower. It is such a simple solution and we are now applying it across the country. We need to expand our network in Africa in the coming months and seeking like minded partners.




Christopher Camponovo said:

Christian - I’m one of those people who argues that central utilities are not the sole solution…and, as you say, there are a number of challenges with smaller distributed generation projects. One of the biggest problems is one you haven’t mentioned – that is, coming up with commercially viable models that can be financed. The challenge is that the traditional project finance model isn’t working for these smaller projects in Africa – due largely to actual and perceived risk on the part of lenders…

I guess this is where business can be part of the solution…by developing innovative financing models and promoting distributed generation to close the Africa energy gap.


(Christopher Camponovo) #58

You're right that a systems lens helps with the risk-benefit calculation, but only if you're an investor that recognizes the value in that kind of a consideration factored into the business case -- i.e., an impact investor. The problem, of course, is that the vast majority of lenders in today's world (particularly on the debt side) aren't impact investors -- they're looking at risk far more than they're looking at the strictly non-economic benefits...


(Mitra Ardron) #59

Finding business solutions is key, we (Lumeter Networks) work on addressing the payments challenge, so that if you are working with either of TIm McNeil's first two categories (Individual appliances, or Mini-grids) the payment can be collected from the customer over a period of time. Getting paid - along with finding the working capital while getting paid, are IMHO far higher challenges than the energy generation/distribution technicalchallenges now.


(Rodger Chali) #60

Robert i am in Calgary , Canada lets talk.

Robert Laporte said:

We have established a financial model that works in Canada and can be easily applied anywhere in the world. The risk factor lies in the technology rather than the borrower. It is such a simple solution and we are now applying it across the country. We need to expand our network in Africa in the coming months and seeking like minded partners.


Christopher Camponovo said:

Christian - I'm one of those people who argues that central utilities are not the sole solution...and, as you say, there are a number of challenges with smaller distributed generation projects. One of the biggest problems is one you haven't mentioned -- that is, coming up with commercially viable models that can be financed. The challenge is that the traditional project finance model isn't working for these smaller projects in Africa -- due largely to actual and perceived risk on the part of lenders....

I guess this is where business can be part of the solution...by developing innovative financing models and promoting distributed generation to close the Africa energy gap.