Power Africa: Beyond the Grid
9 June 2014
The White House Blog
Congratulations to the 27 private-sector partners of "Beyond the Grid" - a new Power Africa initiative to unlock investment and growth specifically for off-grid and small-scale energy solutions - announced today by Secretary Moniz at the U.S.-Africa Energy Ministerial in Addis Ababa, Ethiopia.
President Obama launched Power Africa nearly one year ago to double access to electricity in sub-Saharan Africa - electricity needed for students to succeed, businesses to thrive, and African economies to grow.
The challenge is greatest beyond the electric grid serving dense urban populations. More than 240 million people live without electricity in rural and peri-urban communities across the six Power Africa focus countries. Too many do not even show up on government plans to expand the grid over the next decade.
But, bolstered by the falling cost of renewable energy generation; rapid advances in energy storage, smart meter, and mobile payment technologies; and innovative business models, new distributed energy companies are now delivering clean, reliable energy in Africa at a competitive price point. While the market is still young, it holds great promise to follow the mobile phone in leapfrogging centralized infrastructure across Africa.
Beyond the Grid will double down on Power Africa's support for this potentia lly game-changing sector, building on more than 25 small-scale energy projects already in the Power Africa pipeline.
Beyond the Grid's 27 founding partners - including impact investors, venture philanthropists, clean-energy enterprises, and practitioners - have committed to invest over $1 billion over the next five years to seed and scale distributed energy solutions for millions of African homes, businesses, schools, and other public facilities.
Examples of commitments to date include:
- Acumen commits to invest up to $10 million in 5-10 enterprises serving off-grid markets in multiple Power Africa countries.
- Capricorn Investment Group commits to invest in companies providing solar power, hybrid power systems, mini-grid installations, energy storage systems, and mini-hydro power systems, expanding from Tanzania and Nigeria to two additional Power Africa countries.
- Gray Ghost Ventures commits to raise $50 million for early-stage equity investments, to build on current investments including in Beyond the Grid partner d.light, which independently commits to deliver solar-powered lighting and energy products to more than 100 million Africans over the next five years.
- Khosla Impact commits to build on equity investments in Beyond the Grid partners BBOXX and SunFunder with investment, strategic assistance, and connections for two-three additional businesses that expand the access and affordability of solar products for African consumers; catalyze at least $10 million in debt from co-investors; and take investee companies to profitable scale within five years.
- Mosaic commits to crowdsource $125 million in debt for small-scale energy service providers in Power Africa countries over the next five years, delivering power to 10 million users and a financial return to investors.
- Schneider Electric commits to train 1,000 Africans in energy-related trades every year. Building on the Schneider Electric Energy Access fund - which included an investment in Beyond the Grid partner Fenix International - Schneider Electric also aims to raise up to $80 million for a new impact investment fund dedicated to off-grid energy SMEs in sub-Saharan Africa over the next five years.
- Solar Sister commits to expand its last mile distribution network of women entrepreneurs with successful clean energy micro-businesses in order to provide energy access to over 400,000 African households over the next five years.
Leveraging the full tools and resources of the 12 Power Africa agencies, Beyond the Grid will take steps identified by the initiative's partners and other experts as most critical to unlock further investment and growth in the off-grid energy sector.
Beyond the Grid will strengthen the enabling environment and foster the clear, predictable rules needed for investment and operations. It will also catalyze private-sector investment through pre-investment technical assistance, risk mitigation, and new financial tools that strategically blend donor and private capital as well as aggregate small energy projects for investment at scale.
Original article by John Podesta