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Energizing Finance: Taking the Pulse 2021 - Ghana, Mozambique and Vietnam
- Achieving universal Tier 1 electricity and Tier 4 clean cooking access will cost USD 38-48 billion across Ghana, Mozambique and Vietnam; a more incremental pathway of Tier 1 electricity and Tier 2 / Tier 3 clean cooking access will be considerably less costly at USD 2.1 billion
- About USD 1.1 billion will be needed in affordability gap financing across Ghana, Mozambique and Vietnam for Tier 1 electricity and Tier 2 / Tier 3 cooking access.
- Mini-grids will make a relatively small contribution to universal Tier 1 electricity access in the Business-as-Usual scenario.
- Standalone solar solutions will deliver access to all transition households not served by the grid or mini-grids.
About the report
This report updates and extends the biennial Taking the Pulse report, first published in 2017 by Sustainable Energy for All (SEforALL) as part of its Energizing Finance research series.
It seeks to (i) estimate the total volume and type of finance needed by decentralized energy (clean cooking and electricity) enterprises, (ii) estimate unmet finance needs (the affordability gap) for end-use customers, (iii) provide high-level recommendations on the use of funding to unlock private sector capacity and deliver energy access solutions at scale, and (iv) suggest enabling policies and regulations for governments.
Like previous editions, Energizing Finance: Taking the Pulse 2021 relies heavily on an empirically based model to estimate future finance needed in three countries: this year, Ghana, Mozambique and Vietnam, which represent three distinct levels of electricity and clean cooking access and market maturity. The report uses the World Bank’s widely recognized Multi-Tier Framework (MTF) to classify different levels of electricity and clean cooking access for households. For electricity, it measures the gap to achieving universal Tier 1 access; for clean cooking, it estimates the deficit to both universal Tier 2 / Tier 3 levels through industrially manufactured improved cookstoves (ICS) (which rely on traditional biofuels but are cleaner and more efficient than artisanal cookstoves) and Tier 4 modern energy cooking services (MECS) (through liquefied petroleum gas (LPG), ethanol and electricity).
Key findings
Achieving universal Tier 1 electricity and Tier 4 clean cooking access will cost USD 38-48 billion across Ghana, Mozambique and Vietnam. A more incremental pathway of Tier 1 electricity and Tier 2 / Tier 3 clean cooking access will be considerably less costly at USD 2.1 billion. Achieving universal Tier 4 cooking access across all three countries will cost about USD 37-47 billion, depending on the technology used. Achieving universal Tier 1 electricity access by 2030 in Ghana and Mozambique will require about USD 1.1 billion in additional capital.
About USD 1.1 billion will be needed in affordability gap financing across Ghana, Mozambique and Vietnam. Unsurprisingly, given its high poverty levels (46 percent compared with 23 percent in Ghana and 7 percent in Vietnam) (World Bank)), Mozambique will account for the overwhelming share (82 percent) of the need across the three focus countries, mostly to drive standalone solar uptake in poor, rural households. Most of Ghana’s affordability gap financing (92 percent) will be needed in the service of household ICS purchases, with only USD 12 million needed to support standalone solar purchases. Vietnam will require about USD 40 million to support household purchases of ICS solutions.
Mini-grids will make a relatively small contribution to universal Tier 1 electricity access in the Business-as-Usual scenario. They will provide electricity to up to 3 percent of the population in Mozambique and only about 1 percent in Ghana by 2030. High-connection costs (relative to SHSs) combined with a lack of policy and regulatory clarity around licensing, land acquisition, concessions, tariffs, and subsidy schemes, limit private participation in mini-grids.
Standalone solar solutions will deliver access to all transition households not served by the grid or mini-grids. Achieving this will require a substantial increase in public and private financing above current levels, especially in Mozambique.
Recommendations
COUNTRY | MAIN RECOMMENDATIONS |
Ghana |
Electricity
Clean cooking
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Mozambique |
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Vietnam |
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Cross-cutting |
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Energizing Finance 2021 official virtual launch
To help countries close their energy access gaps, we need a clear picture of the finance required. That means understanding how much finance they are already receiving, in what forms, how quickly committed funds get paid and which energy solutions are being financed.
The Energizing Finance research series is recognized as a valuable source of energy finance analysis and advice to policymakers, the finance sector, industry and civil society. It consists of in-depth primary research and analysis by Sustainable Energy for All (SEforALL) and partners.
On 14 October, SEforALL will release two new reports under the series:
Energizing Finance: Understanding the Landscape 2021 tracks finance for electricity and clean cooking committed in 2019 to 20 Sub-Saharan African and Asian countries – known as the high-impact countries (HICs) – that together are home to more than 80 percent of people globally without energy access. This report was developed in partnership with Climate Policy Initiative.
Energizing Finance: Taking the Pulse 2021 presents findings on the estimated volume and type of finance needed by enterprises and customers to achieve universal energy access for both electricity and clean cooking by 2030 in three focus countries: Mozambique, Ghana and Vietnam. This report was developed in partnership with Dalberg Advisors.
Join us as we launch this year’s research. In addition to sharing key findings, the event will feature panellists who will shed light on what is needed to unlock greater finance for energy access in the push to achieve Sustainable Development Goal 7 by 2030.
Watch the event here
EDP supporting local energy access projects across East Africa
Sustainable Energy for All (SEforALL) delivery partner and multinational utility EDP - Energias de Portugal is exemplifying the role the private sector can have in supporting Sustainable Development Goal 7 (SDG7) – affordable and clean energy for all by 2030.
EDP’s first edition of the Access to Energy Fund was launched last fall, with 450,000 Euros earmarked for promoting access to energy in remote areas without access to the electricity grid.
Now, EDP has announced that this money will be allocated to six sustainable and clean energy projects across East Africa, notably in Kenya, Tanzania, Mozambique and Malawi.
According to the 2018 Tracking SDG7: The Energy Progress Report report, 600 million people across Africa do not have any electricity, with millions more having only intermittent access to power. The consequences of these access gaps are far-reaching, limiting opportunities for quality education and health care.
"Access to energy has the potential to play a revolutionary role in emerging countries, being an essential tool for a society to foster opportunities and equality", António Mexia, president of EDP, explained in announcing the Access to Energy Fund’s recipients.
Building partnerships across the spectrum of stakeholders is at the heart of all that SEforALL does to 'change the game' on sustainable energy and accelerate the pace of progress towards SDG7. This includes supporting private sector partners, like EDP, in developing innovative solutions that close energy access gaps.
EDP’s Access to Energy Fund places the company’s financial support behind a series of initiatives that will impact upwards of 55,000 people, of whom ten thousand will be impacted directly. Co-operative Bank Foundation, SAVIC Africa, UN-Habitat, Girl MOVE, Energía Sin Fronteras Foundation and Sustainable Investments and Development Initiatives were selected from a list of 108 entities who applied for the first edition of the fund.
In Kenya, Co-operative Bank Foundation will install solar greenhouses to power irrigation systems in 12 schools to ensure that there will be adequate supply of food throughout the year while providing energy access for 6,000 people. Meanwhile, SAVIC Africa's OKAPI Green Energy project will build a 12 kWp photovoltaic mini-grid at Kakuma Refugee Camp with smart metering technology to provide electricity to 150 homes and 50 business clients.
In Mozambique, the Girl MOVE Academy's "Energy for a Better Future" program will create a 30 kWp solar energy plant for an ECOCampus and IT center for training a new generation of female leaders. UN-Habitat will build solar energy systems to supply 12 classrooms at two schools affected by natural disasters. In addition to promoting access to education for 1,300 people, the initiative also covers the installation of emergency alert systems, internet access and charging stations, which could generate revenue for schools.
Energía Sin Fronteras Foundation will offer 25.9kWp photovoltaic panels to provide electricity at St. Mary's Rehabilitation Center in Malawi so that it will be able to provide 24-hour medical care and clean water to patients.
The Sustainable Investments and Development Initiatives (SIDI) will also allow 1,500 fishermen and commercial and public facilities to access energy through a 10 kWp photovoltaic mini-grid that will enable the generation, storage and distribution of power to a remote island in Tanzania.
These recipients were selected according to criteria such as social impact, partnerships, sustainability, potential for expansion and number of beneficiaries, work in the areas of education, health, water and agriculture, business and community. Each one received financial support ranging from 25,000 to 100,000 Euros based on their commitment to implement their projects by the beginning of next year.
Read more about the selected initiatives.
*EDP President António Mexia is the Chair of the Administrative Board of Sustainable Energy for All
EDP launches clean energy access fund for developing countries
Energies de Portugal (EDP), a Sustainable Energy for All Delivery Partner, has announced the launch of an energy access fund that will allocate about €500,000 annually to promote renewable energy projects in developing countries.
The application process for the inaugural program is open from October 22 to November 25, 2018.
The fund invites organizations from around the world, both profit and non-profit, to help develop projects in Kenya, Tanzania, Mozambique and Malawi. The selection of these four countries reflects the Group’s strategy this year to prioritize investments in East Africa due to the region’s greater political stability and dynamic economic development.
The initiative is part of EDP’s announcement in May that it would provide €12 million under its long-standing access to energy (A2E) program over the next three years to promote universal access to sustainable energy in developing countries, with 200,000 people expected to benefit.
“Access to energy must be a concern and priority for all of us. As part of our energy access strategy, which aims to benefit more than 200,000 people over the next three years, we have launched an investment fund for renewable solution projects with a relevant impact in developing countries,” said EDP Group CEO António Mexia, who is also Chair of the Administrative Board of Sustainable Energy for All.
The A2E CSR Fund Program will focus on five areas in which energy plays a crucial role: education, health, water and agriculture, income generation and community projects. The projects will be selected according to criteria such as social impact, partnerships, sustainability, scalability, and the number of beneficiaries.
Funding for each project will range between €25,000 and €100,000, with the fund covering up to 75% of total project costs for non-profit entities and up to 50% of total project costs for for-profit entities.
The project selection process will be concluded on December 21, 2018. The allocation of the funds will be formalized in January and all the projects must be implemented during 2019.
EDP is committed to contributing to the achievement of the United Nations Sustainable Development Goals to help transform the way energy is produced, distributed and consumed. Access to energy is a necessary condition to break the poverty cycle and allow the social and economic development of remote rural areas.
Lisbon-based EDP is the world’s third largest electricity production company, providing electricity to 10 million customers in 14 countries on four continents, with almost 70% of its energy produced from renewable resources.
More information, including regulations and application forms, are available here.
Photo credit: EDP