Project: Rural Communities Powered by Renewable Energy Solutions
State of development: Current
Stage of development: Early stage
Stage notes: Early-Stage Design
Type of instrument — Impact Bond: Yes; Outcomes Fund: No; Social Impact Incentives (SIINC): No; Social Impact Guarantee: No; Payment-by-results (no pre-financing): No; Technical Assistance and Market-building program: No; Other: 
Rationale for using outcome-based finance: ActionAid is an international women's rights organization that fights for a sustainable and gender-equal world. In more than 45 countries, AA works side by side with people who stand up against injustice and believe in equal opportunities for all.  Our well established, participatory and feminist methods for coordinating large programmes have shown its value in planning and monitoring qualitative and quantitative targets, both long- and short-term, in implementation and in financial management. The ActionAid federation contains offices in 45 countries worldwide, each with a PMEQL expert, programme officers, gender and youth experts. We work together with implementing partners who are also involved in PMEL. Our focus is on system change, in which addressing structural power imbalances and inclusive alternatives are central elements. Rural Renewable will be a self-reliant programme on the long term, through micropayments and accumulated skills. SFNL is an experienced partner to help with a solid investment case.  
Key challenges to launch: Where traditional funding would focus on the output of installing the hybrid powergrid,an impact bond focusses on outcomes.The impact bond as funding vehicle therefore ensures that innovation is possible and that achieving the most effective outcomes for the beneficiaries stand central in the implementation. NGOs, like AA, have limited resources and capacity, which, also due to legislation, must be deployed to achieve their mission. It can therefore be challenging to find resources to expand knowledge and develop new initiatives. Funding from  Outcomes Accelerator makes both possible for AA. To show our commitment to gaining expertise in innovative funding, AA is going through extraordinary length to use own means. However, these means will not be sufficient and additional funding from the Outcomes Accelerator is needed. Lessons learned will be replicable to other AA programmes in the future and will not only benefit ActionAid Netherlands, but the entire Action Aid Federation. 
Social/developmental challenge: Bangladesh's strategy IEPMP focuses on introducing large power plants, connecting cities to a powergrid. Most of these plants are fossilfuel based. Through this strategy, the focus is on connecting urban areas to the powergrid, overlooking rural areas and communities. Large coal fire power plants have created negative social impacts for communities in the vicinity of the projects (loss of land, forced displacement, destruction of property, loss of livelihoods) and the environment (pollution of air, soil and water, loss of biodiversity). Prime Minister Sheikh Hasina announced Bangladesh's commitment for 40% renewable energy by 2041. Extra efforts are therefore needed. The communities themselves do not have the financial means to set up their own initiatives to connect to the power grid. The Rural Renewable project solves this market failure by connecting the communities to renewable and clean energy and by assisting them in maintenance and livelihoods trainings and developing a sustainable businessmodel.
Expected intervention model: ActionAid leads in demonstrating the synergies between access to energy, economic opportunities, gender equality and climate change, serving as a blueprint for others. This project, "Rural Renewable", proposes to develop a new concept by exploring, together with SFNL the feasibility of an impact bond, funding mini off-grid/hybrid-grid solar based renewable energy systems in poor, rural communities in Bangladesh to enhance sustainable livelihoods and facilitate a just, green energy transition.
Electrification is a key step to enhance the standards of living in the global South. It can enhance basic needs, like access to water and education, and bring benefits to a wide range of local enterprises. Electric lighting increases safety and gives people the opportunity to use the dark hours for studies and recreation. In the global South, lack of access to energy is especially an obstacle to women's and girls' well-being and economic opportunities. Women and girls in rural areas spend a large part of their day collecting fuelwood, which translates not only into continuing poverty and inequality, but also into lost opportunities for education and paid labour. 
While at the national level, an average 47% of Bangladeshi homes have access to electricity, this is only 15% in rural areas.
Policy sectors — Employment and private sector development: No; Education: No; Social protection: No; Criminal justice: No; Health: No; Agriculture: No; Environment and climate change: Yes; Water, Sanitation and Hygiene: No; Energy: Yes; Humanitarian: No; Early Childhood Education: No; Other: 
Primary SDG goal: 7,8,13
Country income classification of beneficiaries — Low-income: No; Lower-middle-income: Yes; Upper-middle-income: No; High-income: No
Notes: Data for this pipeline project was last updated in March 2024
Delivery location: Bangladesh