What Support Do Energy Access Enterprises Need To Thrive?
Many enterprises are working to solve the huge problem of energy poverty in the developing world by delivering electricity to the 1.3 billion who live off the main grid, or by selling improved cook stoves to people cooking over smoky stoves or open fires that damage their health.
Lots of donors, NGOs, investors and others want to help these enterprises end energy poverty. But what kind of support do they need to survive and grow? Ashden and Christian Aid are launching research to answer this question, based on interviews with enterprises including d.light, EcoZoom, and SELCO and support providers such as ERM Foundation’s Low Carbon Enterprise Fund and GVEP.
Years of experience have shown that for provision of energy access products and services to be sustainable they have to be delivered through market-based mechanisms. That’s because when products are given away there is no feedback mechanism for the donor to understand users’ priorities, which means the products do not evolve to be useful and desirable. In addition, the structures that keep the products working are less likely to exist, particularly guarantees and trained repair people. We cannot end energy poverty without energy enterprises.
Many obstacles stand in the way of these enterprises. Often the markets for their products are underdeveloped – people are unaware that the products exist and a lot of work must be done to build up trust in them. Reaching remote rural customers is expensive, as customers are dispersed. In addition most customers have little purchasing power, so financing must be made available to enable customers to buy products. Technical knowledge and capacity is often lacking in the countries where these enterprises work, and those that run them sometimes come from a charitable background so lack business experience. Finally, commercial investors are often wary of these businesses and the markets they operate in, regarding them as high risk.
Ashden and Christian Aid believe these challenges are not insurmountable. As organisations that work with these enterprises we have watched many succeed and some fail. We want to ensure that energy enterprises get the support they need to survive and grow.
So we undertook research which seeks to answer the question: how can donors, investors, technical assistance providers and policy makers effectively support energy access enterprises?
Talking to the experts about what works – and what doesn’t work
The people who have the expertise to answer this question are those who have experienced support – the enterprises themselves. We interviewed 14 Ashden Award-winning enterprises – including those selling solar products, improved cook stoves, and ceramic water filters – about their experiences of receiving both financial support and technical assistance. We asked them what worked and what didn’t, what support they need but can’t find, and what other challenges are holding them back.
To complement the findings from the enterprises, we also interviewed five support providers with experience ranging from investment to sales advice. These interviews explored their experiences of providing support and what had worked well, or not, and why.
The enterprises and support providers’ experiences of success and failure revealed common themes which help us understand how financial support and technical assistance could be better designed and managed to maximise their beneficial impact. The lessons on financial support focus not just on what kinds of finance are needed, but how it is provided. For technical support we explore what factors to consider to ensure the support provided will deliver impact. We use the results to make recommendations which will assist donors, investors, technical assistance providers, and policy influencers who have a shared desire to end energy poverty.
26 June: research findings launched
On 26 June Ashden and Christian Aid will launch the full results of this research, followed by a panel discussion on how to take our recommendations forward.
The event will be hosted by Paul Valentin, International Director of Christian Aid. The panel will include Ben Good, CEO of GVEP; Charlie Miller, Partnerships Manager at SolarAid; and Chhavi Sharma of Ashden. With plenty of time for discussion and networking before and after, the event will be a great opportunity to focus on how we can help enterprises to bring energy access to all. Do join us!
Lessons on support energy access enterprises
26 June, 4 – 6:30 pm
Simmons and Simmons, 1 Ropemaker Street, London EC2Y 9HT.
Please register here if you would like to attend.