USAID injects $4 million to African off-grid solar

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At the recent COP 22 in Morocco, USAID announced $4 million funding to eight companies that are revolutionizing household solar power across Africa through the ‘Scaling Off-Grid Energy: Grand Challenge for Development’ scheme.

Andrew Herscowitz, President Barack Obama’s coordinator for Power Africa and Trade Africa, said the ‘Grand Challenge for Development’ is a platform that aims to accelerate off-grid energy in sub-Saharan Africa through supporting innovators “who are scaling up their inventions."

USAID added that the platform provides "seed funding to solar start-ups to support geographic expansion throughout Africa, test new business models and tap into private and public financing", and that the new $4 million fund is expected to create up to 120,000 additional connections in off-grid communities.

Deciding which companies are to receive funding involves a competitive process, and applications are evaluated based on cost effectiveness relative to traditional alternatives; the plan for collecting rigorous evidence of success, and proposed pathways to scale if proven effective.

Funding of this sort is crucial for the deployment of off-grid solar energy in Africa. Off-grid energy is often pictured as a game-changer across the African content. The argument is mainly justified via solar PV’s stellar price drop, the modularity of the technology, and the vast resource and power needs required throughout Africa.

However, a common problem among off-grid applications is the project off-taker. In other words, investors who want to build PV projects in communities and sell them power off the grid can often struggle to make their projects bankable, and the business models that apply to grid-connected projects are often challenged.

The projects awarded the USAID’s $4 million funds will enable recipients to improve payment and distribution processes and improve their business models so that their operations are feasible, allowing the expansion of off-grid solar power solutions.

The list of the awarded businesses is following:

· Greenlight Plant (Nigeria,Uganda) is expanding sales of low-cost solar home solutions through state of the art pay-as-you-go technology and deep distribution networks.

· D.Light (Kenya) is developing and expanding on software, training materials, and a call center to support a direct distribution model.

· Fenix (Zambia) is expanding energy access through its expandable solar solutions kits that include options to power phones, lights, radios, televisions, and other appliances.

· Orb Energy (Kenya) is establishing partnerships with banks and microfinance institutions to finance consumer solar system purchases.

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· Vitalite (Zambia) is distributing pay-as-you-go solar home systems, televisions, solar lamps, and appliances for rural, off-grid communities.

· Peg Africa (Ghana) is testing new digital payment tools that will help rural customers more easily pay for their solar home systems using mobile money.

· Shinbone Labs (Benin, Ghana) is directly selling pre-packaged, expandable, low-cost solar kits that can be remotely activated, monitored and, in the future, paid by mobile phones.

· Village Energy (Uganda) is building a last-mile solar distribution and

servicing network in rural Uganda by training young men and women to become technicians and retail shop managers in their communities.

Overall, the ‘Scaling Off-Grid Energy: Grand Challenge for Development’ scheme manages funds totaling $36 million and has been launched by Power Africa, USAID, the U.K.’s Department for International Development (DFID), and independent charity Shell Foundation. At the COP 22, Microsoft, Acumen, and the United Nations Foundation also joined the platform.

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