An estimated 12 million families in Ethiopia will still lack electricity in 2025
Without access to quality-verified off-grid lighting and energy products, these unconnected families are likely to continue to rely on hazardous lighting options such as kerosene lamps, firewood, and candles, particularly outside of urban areas. A 2013 Lighting Africa Market Intelligence report found that over 85% of rural households rely on fuel-based light sources, predominantly kerosene.
Mapping the Market & Supporting Businesses
To support alternative lighting and energy sources for the off-grid population, Lighting Africa began working in Ethiopia in October 2010 to mobilize the private sector to create markets for clean and affordable lighting products.
Ethiopia has truly huge potential as an off-grid solar market. Lighting Africa is working closely with the Ethiopian government and private sector to allow the market to reach its full potential.
Alasdair Miller, Program Manager, Lighting Africa – Ethiopia
Our Lighting Africa – Ethiopia program is largely funded by the Scaling-Up Renewable Energy Program (SREP), and was developed in conjunction with Ethiopia’s government, through its Ministry of Water, Irrigation and Energy, and other partners. Key target groups have included rural, low-income households and micro-businesses. We have produced market intelligence reports, supporting both existing players and new market entrants.
We also provide business support to a range of private sector companies entering the sector. These services include providing basic business and technical training to retailers and MFIs entering the solar energy lending space.
Access to Finance for Quality Products
One key finding from our market intelligence work was that access to finance – and in particular foreign exchange (FOREX) – is a major bottleneck impeding the import of off-grid lighting products. To address this issue, the Government of Ethiopia established a financing facility in 2013, with Lighting Africa’s support and US$20 million in financing from the World Bank.
The fund, which is administered by the Development Bank of Ethiopia (DBE), provides private sector companies with the foreign exchange working capital to import qualifying solar products that meet Lighting Global Quality Standards, while MFIs can access this line of credit for household-level loans for products that qualify. A Collateral Support Facility has also been created to provide up to 50 percent of the required collateral for the participating private sector enterprises, when accessing funds from the DBE credit facility
Over 300,000 solar lighting products meeting Lighting Global Quality Standards were imported during the first 18 months this facility was in operation, providing roughly 1 million Ethiopians with access to modern energy services. As of March 2016, 779,514 quality-verified solar lanterns have been imported using funds from this facility. Following this initial success, the World Bank decided to double its funding to $40 million in May 2016.
Setting standards, clearing customs
In 2013 the Ethiopian Standards Agency adopted the Lighting Global quality assurance framework as a voluntary national standard. In January 2016 a mandatory Ethiopian standard (CES 140), based on this framework, was adopted covering off-grid solar lighting products. We are currently working with a number of government agencies to support the implementation of CES 140.
In addition, we are working with the Ethiopian Conformity Assessment Enterprise (ECAE) with the goal of certifying this government-owned body as an approved laboratory in the Lighting Global network.
Boosting consumer awareness of quality products
Consumer awareness of solar lighting products is relatively high in Ethiopia – knowledge on how to identify quality-products, however, lags behind.
To address the issue, in 2015 Lighting Africa launched a two-year consumer education campaign targeting over 12 million Ethiopians, especially in rural areas. The campaign highlights the benefits provided by purchasing quality off-grid lighting, and helps consumers identify products meeting our standards. Activities include mass media and door-to-door campaigns, which are tailored to address the specific needs of low-income households across the country.
We will continue to support the development of the market for off-grid solar lighting in Ethiopia. The primary focus will be on improving the regulatory environment and finding a longer term solution to FOREX constraints. The government of Ethiopia will also undertake consumer education and awareness campaigns in emerging regions with our support, to continue to grow the market for solar products.