2024 KCP Application
Renewable Energy and Energy Efficiency Partnership (REEEP)
Customers & Partnerships
Primary Project Category:
Project Summary / Description:
73% of Zambians, around 13 million people, lack energy access. Grid extension to rural areas, where 96% of people lack electricity access, is unfeasibly expensive. Off-grid solutions offer a reliable, clean and affordable alternative, and people are willing to pay for them. However, companies selling these solutions face many challenges establishing themselves in markets like Zambia, due to a lack of investor confidence, market intelligence and enabling policies. BGFZ provides incentives to de-risk companies‚ entry into or expansion in the Zambian market, and works with the Zambian government to build a friendlier regulatory environment.
Regions of Operations:
Best Estimate of GHG Avoidance/Reduction of This Project (Tonnes CO2 Equivalent/Year):
Impact on Underrepresented Groups:
BGFZ targets household, productive use and institutional customers in rural and peri-urban areas, where the economy and infrastructure are still underdeveloped. Currently, the four companies sell ESS in all ten provinces of Zambia, whereas before the start of BGFZ, they were only present in five provinces. They are also steadily moving deeper into remote rural areas. 13 Million Zambians still lack access to electricity. According to the World Bank, in 2015, 57.5% of Zambians, or 9.3 million people, lived below the international poverty line ($1.90 a day). The companies supported by BGFZ target the poorest people as their main customer base, giving them the chance to replace dangerous candles and kerosene lamps with safe lighting sources, as well as charging their mobile phones at home. All companies have entry-level systems that, through PAYG, are affordable even to the poorest people. Customers are given the option to upgrade, adding energy generation capacity and appliances such as televisions, as they go along. In the first year of BGFZ implementation, 32% of primary customers were women, which is higher than expected. One of the companies reported that 50% of their primary customers are women. An Impact Study by an independent research institute has shown that 25% of customers had initiated new, income generating activities since purchasing a system from one of the companies. Women in particular commented that the systems had led to cleaner indoor air and fewer eye complaints, and that they felt safer now that they had in- and outdoor lighting.
Research or Economic Modeling
Measurement, Reporting & Validation
The Beyond the Grid Fund for Zambia is an innovative incentive scheme which encourages off-grid clean energy businesses to move into/expand within Zambia and deliver reliable, clean, affordable and high-quality off-grid clean energy services to people in peri-urban and rural areas. The scheme aims to fill a 'viability gap' in a market with high potential but which, for commercial investors, is still too risky to move into. This lack of investment meant that prior to BGFZ, companies were unable to raise the financing to set up operations in the country. Funded by the Government of Sweden, this $22 m programme currently supports four companies, which have been contracted to bring energy access to over 300,000 households, or 1.6 million people, by 2021. After 15 months of operation, the companies under BGFZ have reached nearly 65,000 customers, or more than 335,000 beneficiaries in total. In order to monitor the rollout of energy connections, we have developed a custom-built data hub which records each new connection and all payments made via PAYG systems in real time, and allows for close monitoring of impact. In collaboration with the Zambian Government, specifically the Ministry of Energy and the Office of the Vice President, we have also launched the Off-Grid Energy Task Force, which brings together stakeholders from the government, private sector and donor community to identify and address barriers to market growth in the sector.