dollar per kWh south of Sahara three times higher than in South Asia
megawatts of power capacity will be installed
AFRICA – Universal access to reliable, affordable, clean energy is one of the major challenges on today’s development agenda. In 2011, the United Nations launched the Sustainable Energy for All initiative with the aim of bringing together stakeholders from governments, business and civil society to eliminate energy poverty. This is a field in which Proparco has been active for years.

One billion four hundred million people get by without electricity. Another three billion are dependent on coal and traditional biomass sources such as wood and crop waste to meet their lighting, cooking and heating needs.In energy terms, Sub-Saharan Africa is the world’s  most deprived region. Over half of the population – 620 million people – lacks access to electricity, particularly in the countryside. Africa has the same electric power output as Germany, although its population is thirteen times larger. Moreover, the average price  per kilowatt-hour is higher south of the Sahara than elsewhere: $0.14, compared with $0.04 in South Asia, for example.

Energy poverty in the region is clearly an obstacle to human, social and economic development. Its adverse impact on schooling for children and the agricultural value chain (production, processing and storage) is particularly well-documented. To make matters worse, 1,400,000 people die every year from inhaling toxic fumes given off by cooking fuels. Malaria is responsible for fewer deaths.

off grid, Electric, Afrique, Tanzanie,
The goal of the Sustainable Energy for All initiative is to provide universal access to modern energy services, double the share of renewable energy in the global energy mix and double the global rate of improvement in energy efficiency by 2030. But that goal will not become a reality without involvement by all the stakeholders, starting with those in the private sector, who can deliver solutions as investors, producers and distributors.

Changing the global energy landscape will require pioneering public-private partnerships, substantial private investment and joint efforts by governments businesses and civil society to strengthen markets. This strikes some people as a challenge, others as an opportunity – the opportunity for financial and technological innovation, with new markets, new industrial partnerships, more jobs and income.
To bring electric power service to people in rural areas, EAV takes advantage of mobile money options and the emergence of “plug-and-play” solar power kits. “They offer an easy way to cover simple needs and prepay power use,” says Emmanuel Beau.

In 2015, EAV made an inaugural $2m investment in Off.Grid:Electric (OGE), a San Francisco and Arusha, Tanzania-based company that develops and markets solar systems coupled with batteries that can be connected up to LED lamps, phone chargers and other electrical appliances. OGE offers leasing arrangements to cover the cost of solar equipment and enables customers to control how and when they pay via mobile money. Every month, the company “turns the lights on” for thousands of people in Tanzania and Rwanda. It plans to reach the one-million customer mark by 2017 and branch out into others countries in the region. Further EAV investment deals are under examination or soon to be clinched.
“Connecting a rural home to the power grid represents a high investment for electric power companies,” explains Emmanuel Beau, the co-founder of Energy Access Ventures (EAV), a venture capital firm. “Most African States don’t have the resources to cover the cost, particularly as power consumption often boils down to scattered lighting, which offers a limited return on investment. So the main focus is still on urban areas and business users.”

EAV is the only investment fund in Sub-Saharan Africa dedicated to financing (€250,000 to €4m) and assisting SMEs that offer energy access solutions to households in the region’s rural and semi-urban areas. Initiated at the behest of the French company Schneider Electric, which covered a third of its resources, EAV also received funding from the AFD Group. In 2015, the latter invested €5m through its Support Fund for Businesses in Africa (FISEA), a unit advised by Proparco. The Fonds Français pour l’Environnement Mondial (French Facility for the Global Environment – FFEM) likewise invested €1.5m, and additional financing was provided by CDC (Proparco’s British peer), the European Investment Bank

EIB) and the OPEC Fund for International Development (OFID).Proparco and the FFEM also co-finance technical assistance to provide training and expertise in management, corporate governance and recycling to companies in the EAV portfolio. Schneider Electric in turn makes its engineers, marketing specialists and consultants available to the firm.
“Who can live today without lighting?”

EAV co-founder Emmanuel Beau is someone who takes the long view. He aims to make clean, affordable power available to a million more Africans by 2025. And that requires mobilizing investors and raising funds.
Laid-back, self-confident, Emmanuel Beau gets passionate when he talks about EAV, energy access and Africa. In his late twenties, Beau considers it a matter of necessity to provide Africa’s rural dwellers with lighting, above all from renewable sources. Necessity in this case means “reinventing the world we live in, starting with our approach to producing, distributing and consuming energy”. Before becoming a manager of a €54.5m investment fund, Beau gained valuable experience on the ground. He turned a workshop in the Senegalese bush into a social enterprise that leases out solar power systems under hire-purchase schemes (managed and supported by rural microfinance institutions) to individual and collective users, for example, and managed social impact energy investments in Africa for Schneider Electric. He belongs to the up-and-coming generation of bold French entrepreneurs and investors who believe in taking action to “change the world”. But because naive optimism isn’t his style, he stresses the need to raise “loads” of capital to achieve that. “The mobile money boom, with Africa leading the way, has combined with progress in solar energy technology to make low-cost individual energy access solutions a reality. As a result  business models that foster the emergence of viable venture capital firms are gaining traction. Most startups in the sector are in the experimental stage, but in Tanzania, for example, OGE has gone from 10,000 installations a year to over 10,000 a month.” EAV’s goal is for “those startups to break even and start turning a profit so that they can scale up and demonstrate the maturity of the market”. For that to happen, support from Proparco and other development banks is “essential to ‘de-risking’ the business model and attracting capital”, Beau explains. Driving his determination to see the companies in his portfolio succeed is the belief that their success is “the prerequisite to replicating their business model across Sub-Saharan Africa and perhaps at that point to make electricity available to 620 million Africans”.