All eyes will be on the U.S.-Africa Leaders Summit in Washington next week with one question in mind -- will those gathered take steps to move investment beyond the grid?
Just this week, Politico reported that former New York City Mayor Michael Bloomberg and former President Clinton are set to attend. With a long list of U.S. Government dignitaries also expected, the event will send an important signal for the future of President Obama’s Power Africa Initiative. Now’s the time for that signal to be loud and clear - Power Africa is doubling down on investment in solar markets beyond the grid.
Earlier this summer, Energy Secretary Ernest Moniz announced at an event in Addis Ababa Ethiopia, a groundbreaking new $1 billion initiative as a part of Power Africa dubbed “Beyond the Grid.” The initiative builds on more than 25 small-scale energy projects already in the Power Africa pipeline to catalyze a distributed clean energy deployment. To build the initiative and drum up investment, the Administration pulled together 27 founding partners – including impact investors, venture philanthropists, clean-energy enterprises, and practitioners – who 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.
That announcement was a big deal. By shifting policy focus and investment towards the cheapest, fastest, most effective energy access solutions - distributed off-grid solar - the Obama administration is poised to unlock between a $12 billion and $50 billion clean energy opportunity.
Underneath those numbers lies an even more exciting idea -- that energy access can develop just like communications have. All across the developing world -- but especially in Africa -- mobile phone technology has leapfrogged land line telephones entirely. In fact, three out of every four new mobile phone subscribers are now in the developing world. The same cannot be said of energy access.
Research from Group Speciale Mobile Association (GSMA) shows how both energy and water access lag far behind the penetration of cell phones in Africa. In total, 411 million people worldwide, the vast majority in sub-Saharan Africa, have a mobile phone but no way to charge it. It’s this convergence of un-electrified populations and mobile phones that is creating a tremendous new opportunity for solar power.
All across Africa, solar entrepreneurs are working with communities who live beyond the grid to put power directly into their hands. Thanks to the explosion of cell phones, these communities are now able to take advantage of mobile money platforms like M-Pesa in Kenya to pay for solar energy from companies like M-Kopa. This is unlocking a solar revolution for energy poverty that could fundamentally alter the evolution of energy infrastructure across the continent.
But while this market is growing rapidly -- 77 percent in 2014 according to the Global Off Grid Lighting Association -- it’s cash-starved and needs support. That’s why the industry has been demanding a new $500 million fund from the World Bank (join them and sign our petition). Here are a few steps the summit can take to further back this vital industry:
1) Announce a goal to phase out kerosene based lighting by replacing it with clean solar power;
2) Leverage investments in solar that help achieve that goal by using loan guarantee authority at USAID or OPIC;
3) Work to reduce and eliminate harmful VAT taxes on solar products for the off-grid rural populations; and
4) Set a baseline and measure progress in increasing public investment in beyond the grid solar markets.
The President’s new Power Africa Initiative and the Energize Africa Act in Congress both touch on these important goals. That’s why they now represent historic opportunities to shift resources and investment beyond a failing business-as-usual approach towards 21st century solutions. As the world’s biggest leaders come to town for the U.S.-Africa Leaders Summit, the innovative companies and investors building a future we all want to see will be waiting to hear one message: It’s time to move investment Beyond the Grid.
-- Justin Guay, Associate Director Sierra Club’s International Climate Program