Going the “Last Mile” to Connect Africans Beyond the Grid

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Nearly 600 million people in Africa lack access to grid-electricity, and are missing out on the transformative impacts reliable energy provides. Yet fruitlessly waiting for the grid to reach deep into the rural areas where so many of the energy poor live is not the only answer. Modern, high-quality off-grid ​products can sustainably meet the lighting and – increasingly – the energy needs of those not connected to the grid.  
 
Power Africa partner Lighting Africa, an initiative of the World Bank and International Finance Corporation (IFC), is making​​ connections off the grid.
 
While far more technically and financially feasible than bringing grid electricity to every household, getting off-grid lighting and energy products into the hands of every individual, family, and business has its own challenges. Quality products need to be designed, produced, and transported. Consumers must become aware of, and gain trust in the advantages offered by these products and find a way to pay for them. Distributors need to have the financial capability to hold stocks and the logistical capacity to reach the ‘last-mile’ consumers.
 
Since running its first pilot projects in Ghana and Kenya in 2007, the joint IFC-World Bank Lighting Africa program has been catalyzing markets across the entire supply chain to meet these and other challenges. Lighting Africa has since expanded to 10 additional countries and enabled more than 17.3 million people in the region to access clean, affordable, and safer energy sources, and aims to reach 250 million more people by 2030.
 
Lighting Africa is currently building upon on one of its earliest successes in Kenya with “Lighting Kenya II”, which includes $850,000 in funding from the U.S. Agency for International Development. Since its start in 2007, when the off-grid market was nascent, the use of solar lighting products has grown significantly. Now, close to 20% of Kenyans are using these types of products. But despite this promising development, far too many are still left in the dark – disproportionately those living in rural areas.
 
The twin challenges of distribution to reach the most rural users – those living at the ‘last inch of the last mile’ – and lack of financing along the supply chain continue to be key impediments to wider reach. The Kenya II project seeks to address these issues by partnering with microfinance institutions (MFIs) and involving women’s and youth groups as last-mile distributors. In both approaches, trust is key. Communities are far more likely to adopt change when presented by people they know. At the same time, MFIs need to be able to trust the reliability of the products to head off default on repayments. Thus, only products meeting the quality assurance standards developed by Lighting Africa – now known as Lighting Global Quality Standards – are eligible for financing through Lighting Africa’s MFI partners.
 
Lighting Africa is educating partner finance institutions on how to identify these quality-assured products and integrate them into their business. National MFIs provide the breadth of a comprehensive network coverage across Kenya, while the regional MFIs give depth into rural markets. Lighting Africa’s market development activities are tailored to meet the unique needs of each individual institution to maximize impact. However, all MFIs are offered support with facilitating business linkages, driving consumer awareness activities, and equipping locally-based technicians to provide after-sales support.
 
All MFIs are also encouraged to provide financing to women’s groups and other last-mile distributors, enabling them to gain the financial capabilities to increase inventory and meet demand. And when consumers have access to loans they can act on their aspirations for improved lighting and energy services, and pay the up-front cost of the off-grid products. Repayments are typically no more than the recurring fuel costs for alternatives like kerosene lamps would be – only that in a few months the products are paid for, with no need for additional expenditures. But without access to a loan for the upfront cost, these products are out of reach for too many.
 
By successfully addressing the issues of financing and last-mile distribution these transformative products are placed -- literally -- within reach of even the most rural end-users. By enabling just a small loan, those at the base of the pyramid can grasp the first rung of the energy ladder. And that means that children can finally study without breathing in poisonous fumes, entrepreneurs can work after dark to generate extra income, and families can enjoy time together in the evenings without struggling to see in the dark.

Last updated: June 07, 2016

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