On June 27th, stakeholders and experts gathered online for the webinar “Productive Uses of Renewable Electricity in Africa”, an initiative of the EU-funded RePower Project. The session highlighted innovative approaches to using renewable energy to drive significant economic growth and electrification across rural Africa.
The webinar showcased how productive uses of energy (PUE) can break the cycle of poverty and low electrification by transforming local economies through enhanced business operations and increased electricity consumption. Speakers Lucia Kamati from Africa GreenTec, Carlos Miro from GIZ, Tina Möller from NEFCO, Anita Otubu from Sustainable Energy for All, and Annette Omune from the World Bank shared insights and case studies demonstrating the impactful role of renewable energy in fostering local business growth and sustainability.
Local business empowerment through renewable energy
Lucia Kamati from Africa GreenTec highlighted the company’s innovative approach to providing last-mile connectivity and comprehensive solutions beyond electricity. Africa GreenTec has established 27 ImpactSites, reaching over 61,000 people in remote areas and supporting nearly 1,000 small businesses. Their containerised microgrids offer electricity, clean water, and internet access, driving socio-economic development and significantly reducing CO2 emissions.
Success stories include that of Modibo Traore, a welder who has been able to quadruple his working hours, increase his staff from two to 20, and reduce his energy costs by a third once he replaced a diesel generator with renewable electricity from Africa GreenTec’s renewable microgrid. Another beneficiary is Diessira Diallo, a shop owner who reduced costs by 34 % and doubled her revenue. Both illustrate the profound impact of access to sustainable energy and productive use appliances in improving quality of life and economic opportunities.
Powering Africa’s entrepreneurs with renewable energy
Carlos Miro from GIZ discussed strategic approaches for productive uses of energy in rural power utility projects. He emphasised the importance of evaluating productive uses of energy potential in both existing and new projects, distinguishing between small and large projects to support local entrepreneurs and industries. Promoting productive activities stimulates per capita consumption, diversifies utility revenues, and enhances business model viability. This approach supports local businesses, value chains, and economic growth, leading to broader impacts such as women’s empowerment, poverty reduction, and financial inclusion.
Miro highlighted the necessity for microgrid companies to create separate entities or partner with other organisations to manage projects effectively. Solid business cases and financing are crucial, with sources including grants, debt, equity, and guarantees. He presented two case studies: the WeLight project in Madagascar, which increased energy consumption by 35 % among local entrepreneurs, and the Anka agricultural innovation project supporting a women-run groundnut oil factory, demonstrating the potential of larger initiatives to bolster local industries and value chains.
The importance of supporting the adoption of new technologies
Tina Möller from NEFCO presented the Beyond the Grid Fund for Africa (BGFA), a significant initiative managed by NEFCO to enhance off-grid energy access. Since its commencement in 2019, BGFA has signed 29 contracts, with a focus on sustainable, high-quality energy services and solutions, particularly in standalone systems and mini-grid systems. Möller highlighted the rapid development and significant impact of productive use of energy projects in transforming rural livelihoods across Africa. Möller emphasised the transition of technologies like solar water pumps and refrigeration systems from emerging concepts to commercially viable solutions. These advancements are evident in BGFA’s portfolio, which now includes equipment that not only meets basic energy needs but also enhances economic opportunities for communities.
Möller underscored the critical role of awareness-raising in the adoption of productive use technologies. She pointed out that educating potential users about the benefits of such equipment can significantly increase their income, fostering broader economic development. Moreover, Möller discussed the necessity of comprehensive technical support, from installation to ongoing training and remote diagnostics. This support helps users maximise the utility of their investments, ensuring sustainable growth and the long-term success of PUE initiatives. These reflections are pivotal as BGFA continues to advance off-grid energy solutions, aiming to create lasting impacts in its countries of operation.
Bridging the financing gap in PUE
Anita Otubu, representing Sustainable Energy for All, provided a detailed exposition on the Universal Energy Facility (UEF). UEF operates as a result-based, multi-donor funded financing facility that awards grant subsidies to private sector firms. These firms develop or deploy standalone systems that enable significant economic activity across underserved regions. Launched in five countries, including Madagascar, Sierra Leone, Benin, the Democratic Republic of Congo, and Nigeria, UEF has successfully signed 70 grant agreements with 55 developers. This initiative, involving an investment of $22.8 million, is set to achieve over 25,000 connections, impacting around 125,000 individuals, highlighting UEF’s dedication to widening energy access and improving life quality and economic opportunities in these areas.
Otubu delved into two major programs under UEF: the mini-grids program and the standalone solar for productive use (SSPU) program, with the latter currently operational in Nigeria. This SSPU program showcases how effectively PUE can boost the productivity of businesses by providing dependable electricity for various commercial activities, thereby supporting the growth of micro, small, and medium-sized enterprises (MSMEs) and promoting broader community prosperity through enhanced business operations and income generation. She emphasised the necessity of sustainable business models, such as energy service and lease-to-own, to ensure the long-term viability of these energy solutions. Moreover, Otubu discussed plans to expand UEF’s impact by designing a new program in Zambia aimed at incentivising mini-grid developers to deploy PUE appliances, reflecting UEF’s strategy to tailor programs that meet specific regional needs and help close the energy access gap in Africa.
The World Bank’s Ascent Project
Annette Omune from the World Bank provided an overview of the Ascent project, which aims to deliver 100 million energy connections as part of the World Bank’s commitment to connect 250 million Africans to electricity by 2030. The project targets 20 countries in East and Southern Africa, focusing on solar home systems, mini-grids, clean cooking, and productive use of energy technologies. Omune highlighted the importance of examining productive uses of energy through the entire value chain, encompassing production, aggregation, storage, processing, marketing, distribution, and consumption.
The Ascent project emphasises integrated planning, policy and regulation, business development, technology, and financing as key building blocks for accelerating productive uses of energy. Financing remains a significant challenge, with approximately $66.9 million invested in the PUE sector between 2014 and 2023.
The project provides various support mechanisms, including debt, results-based financing, and technical assistance facilities through country programs, and regionally through the Trade and Development Bank and COMESA. Equity facilities and risk mitigation strategies will also be introduced in later phases.
Conclusion: a sustainable future for rural Africa
The webinar highlighted the transformative potential of PUE initiatives in Africa, illustrating how comprehensive support, innovative solutions, and strategic partnerships are key to driving economic development and improving the quality of life through renewable energy. As these initiatives continue to evolve, they promise sustainable growth and development across the continent, paving the way for a future where rural communities can thrive economically and live sustainably.
A video recording of this webinar is available here: https://repowerproject.com/materials-from-the-webinar-productive-uses-of-renewable-energy-in-africa/
RePower: pioneering plug-and-play microgrids
The RePower project exemplifies a forward-thinking approach to rural electrification, utilising modular plug-and-play microgrids with enhanced storage and energy management systems. By leveraging these microgrids, RePower aims to provide electricity access to 20,000 off-grid consumers by 2027, dramatically reducing connection times and costs while increasing reliability and resilience.
This initiative not only focuses on electricity generation but also integrates climate-smart solutions such as clean water provision and solar-powered cooling, crucial for preserving agricultural produce. By promoting local processing of agricultural products, RePower enhances the economic viability of rural communities, making these projects self-sustaining and reducing dependency on external financial aid.
More information on the project website https://repowerproject.com
Disclaimer: The RePower project is funded by the European Union under grant number 101096250. Views and opinions expressed are however those of the author(s) only and do not necessarily reflect those of the European Union or CINEA. Neither the European Union nor the granting authority can be held responsible for them.