
What is Lighting Africa?
Lighting Africa is a World Bank Group initiative aimed at supporting the industry to create a commercial, functioning off-grid lighting market in Sub-Saharan Africa, thereby supporting human and economic development and poverty alleviation by making sustainable, reliable, affordable, safe, lighting products available to African consumers. The market is intended to deliver a robust array of modern off-grid lighting products to the millions of Africans who lack access to electricity, providing alternatives to the current market , one dominated by fuel-based lighting, a costly, unsafe, environmentally unsustainable and inefficient lighting source. Some key facts about the Lighting Africa:
- The Lighting Africa Program, often referred to solely as “Lighting Africa” was officially launched in September of 2007. Lighting Africa is jointly managed by the World Bank and the International Finance Corporation (IFC), and addresses the lighting needs of rural, urban, and peri-urban customers without connection to the utility grid—predominantly low income households and businesses.
- Lighting Africa supports the industry to deliver alternatives to the current range of lighting options, which are dominated by costly, inefficient, poor quality, and often hazardous fuel based products, such as kerosene lamps and candles.
- Lighting Africa seeks to assist the industry in creating a market which will have the capacity for rapid scale-up and replication across Africa. The program seeks to support the industry to deliver modern off-grid lighting at prices that average African consumers can afford, and induce dramatic cost reductions where possible. It builds upon the institutional capacities already existing in Africa and globally, with a bottom-up focus on consumer needs.
- Lighting Africa is a participatory and evolutionary program, informed and designed through a consultative process with the industry and end-users of the technology. The program assists in establishing connections along the value chain that help to ensure that products are designed to meet the needs of African consumers at an appropriate cost, meet acceptable levels of quality, include a broad array of technological solutions to meet a diversity of lighting needs, and that a level playing field is created among the industry (no one company or product is endorsed by the program), supporting any company looking to enter the off-grid lighting market in Africa.
- Currently we are in what we call the “pilot phase” which includes preliminary work in multiple areas in the following countries: Kenya, Ghana, Tanzania, Zambia, Ethiopia (soon to expand to Senegal), but the project design and implementation strategy are being developed for replication across Africa and beyond.
- The IFC and World Bank, acting as the World Bank Group, plan to continue to utilize the Lighting Africa program to support the industry develop the off-grid lighting market in Africa until the market is sufficiently saturated with an array of modern lighting products that sufficiently meet the needs of African consumers.
Why do we need the Lighting Africa program?
Currently, 1.7 billion people worldwide are without electricity, of which nearly half a billion live in Sub-Saharan Africa. Among the poor, lighting often costs the most, typically accounting for 10-15% of total household income. Light from kerosene lanterns, batteries, candles etc. is of low quality and cause of serious indoor pollution.
- Lighting Africa seeks to develop alternative lighting options for the poor in rural and urban areas.
- The Project seeks to leverage the World Bank Group and other development partner resources to create enabling conditions for a large number of lighting companies to enter and service this lighting market.
- The program seeks to identify and mitigate barriers that prevent the private sector from engaging in this new market area, for example in the areas of technology, policy, finance, information provision, etc.
- It is the aim of Lighting Africa is to reduce these market barriers through close collaboration between the international lighting industry, local businesses and entrepreneurs, governments and other partners to accelerate the development of the modern off-grid lighting market in Africa.
Why does the World Bank Group only address lighting in this program in lieu of other services?
People who live in lighting poverty are not without access to light, they are without access to the kinds of light that promulgate human development. Currently, the majority of Africa relies on traditional lighting sources such as biomass, candles, and kerosene to satisfy their lighting needs. Of these, as many as 500 million people use fuel-based products such as kerosene wick lamps to meet their basic lighting needs. Yet, while these products consume a large share of their scarce incomes, users receive little in return. Moreover, the quality of light is very low – rendering many activities impossible or inefficient after dark. At the same time, it causes heavy indoor air pollution and fire hazards.
How should modern lighting in rural Africa be prioritized against other energy services, including modern cooking fuels and mechanical energy for income-generating activities?
- Clearly, all types of energy services play a very important role in advancing social and economic development and it is important that all of them are addressed. Lighting Africa’s focus on lighting complements a large number of other efforts by the World Bank Group and other donors to improve access to a whole range of different energy services in rural Africa. However, the 17 billion spent on fuel-based lighting by African households and small business every year are evidence of the fact that lighting is a high priority for consumers (up to 50% of total energy expenditures in the household are spent on lighting, consuming as much as 33% of annual household earnings). The high oil prices of the past years are further increasing the costs for kerosene-based lighting and therefore directly hurt poor consumers.
- With the introduction of new cross-cutting lighting technologies, a lighting industry looking for new growth opportunities, and millions of Africans paying substantial sums for kerosene, we sit at an opportune time in history and it is our responsibility as a global institution working to alleviate poverty that we take advantage of the moment at hand.
Why does the World Bank get involved in the lighting market? Isn't the private sector better equipped to do this and if not, what barriers are hindering market entry?
Spending on fuel-based lighting is estimated to be worth US$ 38 Billion per year. While in theory this could offer a large incentive for private companies to get involved, in practice the off-grid lighting market has remained largely untapped, largely the result of a number of barriers, as identified by the industry. Some of these barriers include:
- Lack of information about the size of the market in volume and value terms, customer needs and preferences, potential distribution channels, etc.
- Real and perceived risks of entering African markets
- High upfront costs of new product development and market entry
- High transactions costs: due to weaknesses in infrastructure as well as legal and regulatory frameworks
- Policy barriers including subsidies for kerosene lanterns
- Institutional barriers in identifying capable partners for all aspects of project and program design, development, and implementation.
It is the aim of Lighting Africa (LA) is to reduce these market barriers through close collaboration between the international lighting industry, local businesses and entrepreneurs, governments and other partners to accelerate the development of the modern off-grid lighting market in Africa.
Has the program been created because rural electrification (both on and off-grid) has failed?
No, Lighting Africa has not been developed because electrification programs have failed in Africa. In fact, we can point to a substantial number of successful initiatives where the World Bank Group and other donors have worked successfully with African governments and the private sector to extend electricity access to rural communities. However, despite these advances, you are absolutely correct that Africa is still largely a “continent of darkness” and many regions have been excluded from the opportunity to receive the benefits of modern energy services. Thus, the fact that as much as 90% of the rural population and 74% of the total population in Sub-Saharan Africa lies outside of grid connectivity is certainly a monumental challenge. We believe that this is less the result of failed electrification programs as it is a combination of a number of factors, namely:
- An inability to keep up with the increasing needs of growing populations (which is apparent in the problem with frequent blackouts and poor quality service);
- The exponential cost of expansion into low population dense regions and areas of rugged terrain;
- The fact that electrification expansion models are often based on creating urban markets first where it is commercially lucrative and achieves the greatest immediate impact and then moving outwards towards the rurally dispersed communities (which is what is beginning to happen now in many places across Africa); (4) private sector reluctance to invest in a market which is often perceived as unattractive from a risk-reward perspective.
The goal of Lighting Africa is precisely to complement ongoing grid and off-grid electrification efforts by mitigating some of these barriers to support the private sector and other stakeholders in creating a robust market for sustainable, affordable, reliable and safe modern off-grid lighting products.
The Lighting Africa initiative is focused on off-grid lighting. Does this indicate that it is a preferred option to grid-extension?
Off-grid lighting is not necessarily “better” than grid-extension. In fact, when grid-extension is possible, it is often the preferred option among consumers. However, the reality remains that the grid has not yet reached millions of people and is not likely to in the near term for the reasons mentioned above. Even the smallest of Solar Home Systems (SHSs) continue to be largely out of reach for the poor in Africa due to their large up-front costs. Although microfinance and subsidization have played an important role in making such systems more widespread, the first cost barriers as well as capacity constraints continue to prevent more widespread deployment.
Lighting Africa acts to supplement ongoing programs to expand grid and off-grid electricity connections by focusing on providing the more than 500 million poor off-grid populations who currently rely on costly, dirty, inefficient and hazardous lighting sources such as kerosene lamps and candles with affordable, clean and efficient lighting services. Particularly in light of the high oil price, the need for alternatives to kerosene is more crucial than ever.
Due to recent technological advances that have enabled the development of smaller, more affordable, and reliable products, in combination with an international lighting industry looking for new growth opportunities, the prospect for the development of a market for off-grid lighting products in Africa has never been more promising, affording millions the chance to attain affordable modern lighting for the first time. Consultations with more than 100 private companies, NGOs and other stakeholders identified areas where WBG interventions would help to accelerate such modern lighting markets for the poor. In response, Lighting Africa is developing a number of specially targeted activities, including reducing high market entry, transactions and information costs, addressing policy and regulatory barriers; improving access to finance along the distribution chain; and addressing quality issues with lighting products.
Thus, rather than a substitute for other on and off-grid programs, Lighting Africa is an ambitious program which seeks to fully complement and support other lighting programs under a common goal of delivering quality non-fossil fuel based lighting to those in need.
What would it cost and how long would it take to extend the grid in Africa in order to meet the same goals?
An estimated one-third of the world’s population, nearly 1.6 billion people, lack access to modern energy services including electricity for lighting, numbers that are only expected to decrease slightly to 1.4 billion by 2030 under business-as-usual scenarios. In Africa, the high costs associated with grid expansion, especially in the rural areas where rugged terrain and disparate populations of low densities are often the norm, make it both difficult and astronomically expensive to extend the grid. As a result, the rate at which the grid is sprawling out to these populations in need is painstakingly slow and even the best estimates do not indicate widespread electricity provision as a possibility any where in the immediate future. With rising fuel prices, the expectation of expanding the grid to these populations is only likely to become less promising.
How will the Lighting Africa program help alleviate poverty?
Evidence demonstrates numerous linkages between human development and increased quality of life and access to energy services.
- For example, a positive correlation has been found between increased access to energy and rises in annual household income-level such that modest increases in electricity or lighting services are associated with much larger improvements in human development.
- Because per capita income levels are unequivocally linked to access to energy services such as lighting, expanding access to modern lighting is directly related to the eradication of endemic poverty.
- Moreover, two of the greatest perceived residential benefits of illumination- lighting for education and extension of producing time- are correlated with increased gender equality and opportunities for women and children.
- Apart from households, evidence suggests that access to modern, clean and affordable lighting is one of the key development challenges for millions of entrepreneurs and businesses who have difficulty operating after dark.
What are the expected outcomes of the program?
Put simply, it is important because Africa cannot wait for electrification rates to rise to the level of other world regions to provide lighting. This is an immediate solution, now made possible due to modern, low cost lighting technologies.
Modern lighting services through the Lighting Africa program are expected to yield the following outcomes:
- Extend the working day for small and medium enterprises (SMEs), thus expanding production, enriching income opportunities, improving working conditions, and increasing customers.
- Enhance safety and security via outdoor lighting for personal, business, and community activities.
- Create conditions to attract teachers, retain students, expand time for student reading and studying, and improve grades and school retention rates.
- Provide opportunities for adult literacy and higher education programs.
- Improve health services delivery and thus reduce productivity loss due to illnesses.
You state that the goal of the Lighting Africa Program is to provide access to modern lighting “for 250 million Africans, about half of the 500 million now without electricity, by 2030.” How will you measure this program's achievements?
The goal of Lighting Africa is to support the industry in developing a market for modern off-grid lighting products which, in turn, we hope will eventually provide affordable, sustainable lighting options for the diverse lighting needs of the millions of people who do not have access to electricity and are currently reliant largely on kerosene to meet their lighting needs. The “250 million by 2030” was formulated to create awareness of the problem at hand - 500 million with out access to modern lighting and rising- and give the program an ambitious target to work towards. The goal of Lighting Africa is provide access to modern lighting for all those who lack reliable, affordable, modern lighting; the objective through which Lighting Africa aims to reach this goal is to create the conditions necessary to facilitate market development which, in turn, will enable African consumers to have access to a range of modern off-grid lighting products to meet their needs.
That said, obviously this overarching programmatic goal does not suffice to measure our actual program impact over the life of the program so, at present, we are in the process of setting tangible indicators which will allow us to monitor and evaluate the impact in our pilot countries (for example, some indicators might include: the # of businesses that stay open at night; the # of households that own modern off-grid lighting products; the # of tons of GHGs reduced by the displacement of kerosene with modern off-grid lighting etc., all of which will be evaluated against a baseline.)
The Lighting Africa Initiative has funding of around $12 million USD, a relatively small budget in relation to its goals, and in comparison to investments in grid infrastructure. How does the Lighting Africa’s funding compare to and/or complement the World Bank's and IFC's other investments and goals in energy services in Africa?
As mentioned above, the goal of Lighting Africa is to catalyze a market for modern off-grid lighting products which, in turn, will make reliable lighting available to African consumers. Thus, the initiative’s budget is smaller than those of other projects which actively invest in grid extensions or off-grid technologies. We believe that in the particular case of off-grid lighting this approach allows the potential impact of the project to be maximized, both in terms of speed of implementation as well as in terms of scope of reaching as many poor people as possible.
In fact, it is not our program budget but the proven demand for modern lighting that can drive the creation of a market capable of enabling millions of people to gain access to modern lighting. Cumulative spending on fuel-based lighting amounts to a staggering US$ 38 billion per year market, of which nearly $17 billion is spent in Africa alone, predominantly on kerosene. Every day millions of Africans purchase kerosene at exorbitant prices, using up a considerable share of their disposable incomes. The Lighting Africa program is based on the assumption that the demonstrably strong demand for lighting and the functioning market for kerosene represents a huge opportunity that can be leveraged to displace fuel-based lighting with more sustainable, dependable, safe, and affordable modern off-grid lighting and thereby improving the lives of poor people.
Thus, our current budget is ample to support the first phase of program implementation, in which we are piloting a variety of approaches through which to mitigate market barriers and accelerate the provision of modern lighting services to off-grid populations. Once these approaches have been validated and refined, additional funding will be required to expand the initiative more actively across the continent.
What is Lighting Africa's position on subsidies for rural lighting, electrification, and other modern energy services?
Subsidization for energy services is a complex issue that must be evaluated on a case by case basis. As a program, Lighting Africa does not take a solitary stance on the issue, first and foremost because rural lighting, electrification, and other modern energy services are very different things and each requires a different financing structure to be successful. Rural electrification, for example, has always been achieved through some form of subsidization - by the government or cross-subsidization from urban to rural consumers. Subsidization has also been monumental, for instance, in providing assistance to public institutions (medical clinics, schools, churches, etc.) which provide critical services for the community but lack necessary funds.
Although it is premature to have a distinct position on subsidization until we can adequately measure the impact of our pilot approach, in general, the philosophy of the Lighting Africa program is built on the assumption that modern lighting products can actually be marketed at prices similar or lower to the costs incurred by typical rural households for kerosene. In cases where despite these favorable medium-term economics, the up-front costs would make modern lighting unaffordable to the poor, microfinance could be a promising solution. Thus we believe that a market for modern off-grid lighting products can be developed in the absence of subsidization. This, however, is not to say that Lighting Africa is categorically opposed to subsidization. There may well be market segments (social institutions such as schools and clinics, or the poorest of the poor) which would necessitate from carefully crafted subsidies. Therefore, we constantly monitor available evidence to validate the assumptions that underlie the project to ensure that we can maximize our impact in accelerating a sustainable market for modern off-grid lighting products.
How would you describe the outcome of the Lighting Africa 2008, The first Global Business Conference on off-grid Lighting in Africa?
The outcome of Lighting Africa 2008, the first global business conference for off-grid lighting in Africa was overwhelmingly positive. Noteworthy achievements of the conference included:
- Validation of our overall program design and underlying assumptions on which it is built, including the general programmatic approach and program area development.
- The occasion to consult with the 400+ participants from all over the world and collect invaluable input to inform the program design and development of program areas going forward.
- The opportunity to sensitize a large number of diverse stakeholders, including government representatives, civil society and the private sector of the great prospects for modern off-grid lighting.
- The first face-to-face opportunity for interaction among industry players across the supply chain and the chance to catalyze business partnerships.
- The awarding of the Development Marketplace Grant competition winners and their innovations in product design and unique business models tailored to meet the needs of African consumers.
- A successful trade show and product launch opportunities where entrepreneurs could exchange ideas and become informed on the latest product developments in modern lighting technologies directly targeted at African off-grid consumers.
What is Lighting Africa working on now?
The Lighting Africa team is presently in the process of refining program goals and program areas to respond to the needs that arose from the conference. Based on the positive feedback reinforcing our role in promulgating our existing program areas, a work plan is being formed to respond to needs highlighted in the conference and advance our work in each program area. For example, we are working on developing a standardized set of tools to conduct market research in additional countries; a product quality assurance program is underway; a plan is in place to provide Development Marketplace Grant Winner support; and the new website has been launched to better meet the needs of the industry and allow for greater interaction among users. Moreover, we are developing an approach to address policy barriers that were highlighted at the conference and we are actively looking to expand Lighting Africa operations into new African countries.
What are the key activities of Lighting Africa?
Lighting Africa is a multi-pronged initiative addressing both demand and supply-side constraints to improve access to better lighting. Activities include:
- Supporting Market Research to better understand consumer demand behavior and preferences, and local supply, marketing, and distribution channels.
- Strengthening Ties between the Global Lighting Industry and Local Service Providers to design, develop, and deliver low cost lighting products. Examples include a Development Marketplace competition, facilitation of business-to-business linkages, and strengthening of small and medium enterprises (SMEs).
- Financing Facilitation to increase access to affordable financing for suppliers and end-users, reduce investor risks, mobilize local financial institutions (and micro-finance), offer World Bank Group financing, and apply Clean Development Mechanism (CDM) methodologies to bring down consumer costs.
- Developing Standards, Certification, and Labeling to improve product quality and increase consumer awareness and confidence in new-to-market lighting products and services.
- Aggregating Market Demand through policy support, bulk market purchasing, risk sharing, and linkages to cross sector programs.
- Stimulating Knowledge Sharing and Capacity Building to include a business-to-business web portal, training and train-the trainers programs, public-private partnerships, institutional strengthening, and development of new business models and toolkits.
Is Lighting Africa investing in the development of new technologies? Isn't that risky?
Lighting Africa is not investing in the development of any single technology or company. Thus, Lighting Africa will not select, prescribe or bet on any specific technical solutions. Instead, Lighting Africa acts on behalf of all industry players as a “neutral broker,” as a facilitator or enabler of private sector development in new and existing products that have the potential to meet the lighting needs of the off-grid populace in Africa. Lighting Africa seeks to help mitigate barriers, bridge market gaps, and support the delivery of cost-effective quality lighting options for the poor. By providing access to market intelligence and expertise, mobilizing governments to address policy concerns, supporting financing and risk mitigation instruments, and serving as an honest broker between public, private, and civil organizations, the World Bank Group can support industry efforts to transform markets and increase benefits for those living in poverty.
How is Lighting Africa funded?
Lighting Africa has a budget of about $12 million which serves as seed funding from a variety of donors to launch and pilot the program. Our sponsors include:
What business models will be used to promote lighting products and services to low income consumers?
Currently, the non-fossil lighting market in Sub-Saharan Africa, as many markets for low income people in developing countries, is not very well known or explored.
- Under this program the World Bank will work with global lighting companies, local service providers and distributors, NGOs, the local financing industry (including micro finance organizations) to develop appropriate business models.
- This will include identifying the "right" products to be delivered through the "right" value chains with "reliability" and at an "affordable and competitive price". Lighting Africa activities being undertaken to advance viable business models include: market research on-going in several countries; business-to-business linkages through the Lighting Africa B-2-B portal; and the Development Marketplace grant competition.
When can we expect to see the first concrete results; are there particular countries you will be targeting first?
The program is currently being piloted in Kenya, Ghana, Zambia, Tanzania and Ethiopia. Six additional countries will be added to program activities over the next 2-3 years.
There is some initial anecdotal evidence of companies and investors considering these markets, and we expect to see initial results on the ground in 2-3 years. Two such anticipated results are:
- Selection of up to 20 Lighting Africa Development Marketplace Competition finalists, each of which will receive grants for the design and delivery of low cost, high quality, non-fossil based lighting products for low income consumers.
- Development of a product quality assurance program, to improve product quality and increase consumer awareness and confidence in new-to-market lighting products and services.
Lighting Africa will also be integrated into investment programs of the World Bank under development in a number of African countries such as Burkina Faso, Ethiopia, Ghana, Kenya, Senegal, Tanzania, Uganda, and Zambia.
Are there any good anecdotes you have seen from your research on the ground around Africa that you could recount to put a human face on the problem?
- During our market research, we have met a single mother with two children in rural Kenya, living under a dollar a day that was spending as much as 30% of her income on fuel-based lighting - between 2 flashlights and a kerosene lamp. It was anecdotal and an extreme case, but indicative of the potential impact of a more modern and affordable lighting solution.
- Small business segments, such as fishermen, are found to spend as much as $1,000/year on fuel-based lighting as they use lighting around the boat when fishing. Currently, they use kerosene as the main lighting sources, but some small African companies are starting to offer some alternative products using LED technology that are better and more affordable.
- In Dar-e-Salaam, Tanzania, night shoe sellers have improved lighting quality, increased sales, and reduced pollutants by replacing a handmade kerosene lamp with a 1-watt LED at almost the same cost.
What response have you received to Lighting Africa thus far?
To date, nearly 350 lighting-related organizations from 40 countries have expressed interest in participating in the project and we have 1700 registerd members.
- Over 200 organizations are private lighting companies, participating in all parts of the supply chain and include global players, such as Philips and Osram, and entrepreneurs from 14 African countries.
- The remaining organizations include a broad range of stakeholders, including investors, research centers, NGOs, and universities working with lighting or development.
TECHNICAL QUESTIONS
What technological solutions are demonstating promise for solving the lighting problem?
There are several innovations in lighting that promise provision of affordable, high quality lighting. These include recent advances in lighting technologies such as compact fluorescent lighting bulbs (CFLs) and light emitting diodes (LEDs). The rapid development of solid-state lighting technology over the past 10 years enables consumer product companies to incorporate LEDs into lighting systems which require less than a watt of power input, but which deliver useful light adequate for task lighting, lighting a living space, and/or reading. For example LED packages fewer than five watts deliver adequate light for night fishing and other substantial commercial applications such as night markets. Because of the low power inputs, LEDs can be packaged with low-cost battery power systems and even recharging systems based on photovoltaics, mechanical(hand) pumps, pico hydro, or any other mechanism for generating small amounts of power; these are similar to cell phone recharging stations which are now coming up in large numbers across Africa. While the quality and designs of these systems vary widely, CFLs and LEDs provide tremendous opportunities and the costs are continuing to decline.
The challenge is really on marketing. The Lighting Africa initiative on the one hand seeks to ally with manufacturers to develop more robust and lower cost products, while finding avenues to broaden and deepen the market to distribute these products at affordable prices especially to low income communities. This means working in close cooperation with the private sector across the supply chain - international lighting industry, local suppliers/service providers and community based organizations in Sub-Saharan Africa.
CFLs contain small amounts of mercury and are a disposal concern for countries where the lighting technology is widespread. What provisions does Lighting Africa plan for safely disposing of old CFLs in countries where environmental regulations do not exist or are not strongly enforced?
According to the US Environmental Protection Agency Energy Star Program, CFLs contain a very small amount of mercury sealed in the glass tubing that would amount to the tip of a ballpoint pen. Mercury is an essential component of CFLs and is what allows the bulb to be an efficient light source. No mercury is released when bulbs are in tact or in use. Many manufacturers have taken significant steps to reduce mercury in the fluorescent lighting products and in 2007 the average amount of mercury in a CFL is expected to drop due to technical advances and manufacturer commitments. Further, other energy options, such as coal-fired power plants emit much greater amounts of mercury.
Lighting Africa is keenly aware of mercury disposal issues associated with CFLs. To address this issue we plan to: (1) develop lighting specifications, testing, and accreditation procedures that will promote reduced mercury utilization in CFL products; 2) require reduced mercury containing CFLs in any investments by the World Bank group as part of the Lighting Africa program; and (3) entertain proposals in the Lighting Africa Development Marketplace grant competition that include provision for CFL disposal (e.g., recycling stations, collection programs, etc).
LEDs depend on the ambient temperature of the operating environment to effectively function. How might the high temperatures in certain Sub-Saharan areas impact such a technology?
It is true heat affects life of LEDs. But the good news is once the environment is known, the fixture designer can develop a suitable solution so that the light fixture could last longer. Here are some points to consider:
- LED life is affected by heat only if they are operating, which means you have to consider night time temperatures and not day time;
- The LED temperature is affected by two factors, current through the LED and the ambient temperature. A good product designer will know how to design quality long lasting products that address these factors.
A key component of the Lighting Africa program is to develop a "quality seal" and accreditation processes to ensure the entry of quality LED lighting products into the marketplace.


