Lighting Africa’s approach is to accelerate the development of off-grid lighting markets by demonstrating the viability of the market to companies and investors. The program also supports the scale up and replication of successful businesses by providing targeted business development services and facilitating access to finance while educating consumers and creating awareness for modern off-grid lighting products.
With 25 lamps so far having passed Lighting Africa quality tests and with manufacturers of these products having extended their distribution networks in 14 African countries, the market in steadily taking shape. Sales of solar lanterns have really picked up over the past two years, with a 113% growth in the last six months alone. Improved availability of quality products, matured business models, and a consumer education campaign through which Lighting Africa supports consumers to learn about the opportunities of modern lighting, has contributed to the growth.
But the program is looking at the challenges ahead: 2.5 million people with better lighting was the programs initial goal for 2012. Whereas this target has been attained, it represents a mere 0.4% penetration of the un-electrified population in Africa. A great deal more is needed to improve the way low income households and SMEs in Africa access and use energy.
The programs main challenge is mobilizing financing across the entire supply chain manufacturers, importers and retailers to scale up their operations. Financial institutions perceive the new renewable energy market as high risk for investment. Lighting Africa is working with financial institutions to mobilize trade finance. Moreover, progress has varied considerably across countries with Kenya in the lead and slower growth in Ghana. In the coming months, the program will focus on accelerating access to finance and on setting up regional platforms to support even more companies.
The Lighting Africa is part of IFCs initiative to improve energy access for base of the pyramid consumers. In addition to other efforts to increase grid-penetration in Africa, earlier this week, IFC launched the Clean Cooking Initiative, which works to create markets for affordable LPG in urban and peri-urban centres in Kenya. Together, these two programs are tackling the main sources of in-door pollution kerosene for cooking and lighting and are aiming to displace kerosene as the main household fuel in Kenya,
Box: Lighting Africa – results
2. Improving the enabling environment for the sector by developing a quality assurance market infrastructure, and facilitating business to business interactions through conferences, workshops and a dedicated web-platform. (The World Bank will also focus on addressing policy barriers such as skewed subsidies and high import tariffs for this market in a separate, but parallel, program).
3. Supporting the scale up and replication of successful businesses by providing targeted business development services and facilitating access to finance.