“The critical role of people-powered finance in COP26 climate talks,” a recent webinar hosted by P4G partnership Energise Africa highlighted innovative crowdfunding approaches that are bridging the climate financing gap in developing countries. The engaging discussion touched upon issues of educating people and institutions, the role of philanthropic and public capital, and how to scale available financing from the millions to the billions and trillions needed to achieve a net zero future. Ian de Cruz, Global Director, P4G moderated the discussion.
Iongwa Mashangao, CEO and Co-Founder, Altech, shared the key role crowdfunded financing and platforms like Energise Africa have played in helping grow small businesses and bring clean sources of energy to people in the Democratic Republic of Congo (DRC). From starting with only 50 solar lanterns , Altech now benefits more than 1 million households with over 220,000 solar products. Iongwa shared his goal of creating 5,000 jobs and reaching 10 million people in the next decade. He spoke about how Energise Africa gave businesses like Altech the funds they needed to increase their customer base and attract other potential investors.
Mashangao outlined two significant barriers related to inventory financing and a lack of education. A stronger source of inventory financing would help businesses like his meet increased customer demand and scale these solutions not only within the country but also across Africa. He also spoke about the need to educate rural residents to consider clean energy a basic need, so they move away from toxic sources like kerosene lamps. He shared the education necessary for local banks to understand and back their model. Altech is currently educating government authorities on the need for decentralized electric systems and showing local banks evidence that its business model is sound by sharing data of people following through with their payments.
"You can't resolve the problem without money. You need to use that money in catalytic ways,” said Steven Hunt, Energy Innovation Advisor, UK Foreign Commonwealth and Development Office (FCDO). He spoke about how solar wasn’t initially an obvious cost-effective solution for renewable energy but over time it became apparent that modern lower-cost solutions linking back to solar are an integral part of the clean energy transition. And the rising influence of solar as the solution meant better protections for companies working in countries and who would have access to lower cost capital. He also shared that the success of crowdfunding platforms like Energise Africa show that there is real interest from people who don’t want to wait for governments or pension funds to lead the way.
The message of people wanting to enable change was echoed by Stephanie Jones, Programme Manager, Good Energies Foundation. Jones elaborated on how participating in impact-driven crowdfunding spurred individuals to take other forms of climate action, functioning as a driver of behavior change.
de Cruz called out how innovation and empowering entrepreneurs can lead to immediate outcomes. He highlighted P4G’s impact model of backing pioneering partnerships like Energise Africa and others by proving viable concepts at speed, so governments and financial systems have the confidence to crowd in and scale and replicate them.
Lisa Ashford, CEO, Energise Africa spoke about how the partnership, born out of an innovative finance program run by UK Aid, was set up to funnel investments from individual investors to provide affordable capital to solar businesses in sub-Saharan Africa. These were businesses providing pay-as-you-go solar plans to residents and businesses and giving people access to clean energy. She shared how the platform has invested more than $30 million and provided clean energy access to more than half a million people on the ground. The blended finance mechanisms provided by UK Aid to mitigate the risk and match the funding raised by individual investors helped the platform scale from its initial concept.
Instead of focusing on the financing challenges, Snehar Shah, Managing Director East Africa, Azuri Technologies detailed the immense potential to scale these models. He highlighted how Azuri, a pioneer in pay-as-you-go technology in Africa, had already connected more than 200,000 households to clean energy, amplifying its mission aligned with the Kenyan government’s off-grid electrification strategy. Shah also shared the opportunity to scale not only across different countries but also within individual countries by extending the benefits of crowdfunding from solar lighting to different devices such as televisions and phone chargers. He gave an example of Azuri’s diversification through their role in helping deliver education to rural children when schools were shut because of COVID-19. Through Azuri, the kids had access to solar-powered televisions and were able to follow along with their lessons that were transmitted via satellites to the TVs. The business also has a specific gender equality mission, partnering with female entrepreneurs to help spread the word about clean energy solutions within their communities.
When de Cruz asked panelists how these models could scale, Jones pointed to the growth of platforms like Energise Africa focused on different issues such as locally owned women start-ups and the peace benefits of renewable energy. She spoke about the multiplication of similar platforms as a likely path forward for scaling since people like choice in their investments and are driven by different values and impact goals.
Ashford reiterated the need for different forms of financing and how she hoped that by working together, platforms like Energise Africa would make it easier for others entering this market because that’s what translates into benefits on the ground. She also spoke about Energise Africa’s plans to scale by exploring different sectors such as agricultural technology and geographies beyond Sub-Saharan Africa. Energise Africa just funded its first project in India. Ashford pointed out that securing more blended finance alongside the individual investor finance would lift up the whole sector and deliver greater impact.
Shah summed up the forward-looking discussion and future opportunities best when he said, "We are at an inflection point where many of the roadblocks have been addressed and now it's really the time for exponential growth."
Listen to the full recording here.
Note: Capital is at risk and returns are not guaranteed. Please read the full risk warning on https://www.energiseafrica.com/risk before deciding to invest.