Beyond the Grid Fund for Africa Beyond the Grid Fund for Africa - Beyond the Grid Fund for Africa - Uganda The Beyond the Grid Fund for Africa (BGFA) is a planned expansion and scale up of an innovative, results-based initiative incentivising private sector to provide affordable, efficient, high quality, renewable energy services to underserved people in off-grid rural and peri-urban areas that builds on experience of the Beyond the Grid Fund for Zambia. Sida's proposed support to BGFA includes, Burkina Faso, Liberia, Mozambique, Zambia, Uganda and the Democratic Republic of Congo. BGFA aims to reach 5-15 million people with clean, renewable and reliable energy services. BGFA is designed to stimulate and accelerate the emergence of new business models for provision of affordable energy access at scale whilst demonstrating sustainability over time. The BGFA particularly supports the objectives of the Sustainable Development Goal 7 (SDG 7), which aims to ensure access to affordable, reliable, sustainable and modern energy access for all by 2030.

BGFA is a tailored, results-based incentive scheme for private sector early movers in risky frontier markets that are targeting underserved market segments. BGFA uses a tailored tender process (Social Impact Procurement) to “procure” modern energy services that are currently not sufficiently profitable for purely commercial activity. BGFA works in parallel to improve market ecosystem conditions, utilising a combination of capacity building and technical assistance, stakeholder outreach and market intelligence development, in a “Platform for Change” approach. In addition, BGFA combines detailed market analysis with data and information on from a monitoring and evaluation framework, yielding valuable insights and metrics on “frontier” markets and end-customer preferences. This information is utilised to help market stakeholders increase quality of energy services delivered to end customers, and improve investment and other development-related decision making (e.g. from banks, credit institutions and other investors) and delivered to the market via the Platform for Change. Based on previous results in Zambia, BGFA is expected to mobilise private resources of around 3-4 times the Swedish support. The Swedish support is designed to cover part of the risk margin for scaling and growing sustainable businesses. The main share of the companies financing will come from their operations - delivery of high quality energy services at affordable costs to consumers at the bottom of the pyramid.

The BGFA will be managed by the Nordic Environment Finance Corporation (NEFCO), a Public Financial Institution, focused on environmental investments, established by the Nordic Governments in 1990. NEFCO provides results-based green financing. BGFA will be managed by NEFCO in partnership with the Renewable Energy and Energy Efficiency Partnership (REEEP), an Austria-based international multilateral partnership, working to accelerate market-based deployment of renewable energy and energy efficiency. Beyond the Grid Fund for Africa (BGFA) är ett flerårigt program som syftar till att öka tillgången till energi, förbättra fattiga människors utkomstmöjligheter och katalysera ekonomisk aktivitet i landsbygdsområden och slumområden i sex länder - Burkina Faso, Liberia, Mozambique, Zambia, Uganda och Demokratiska Republiken Kongo. Det är en uppskalning och utvidgning av ett program som prövats i Zambia med goda resultat. BGFA har som mål att leverera billiga och tillförlitliga förnybara energitjänster till mellan fem och femton miljoner människor, på landsbygden och i peri-urbana områden som inte täcks av nationella elnät. BGFA ska skynda på marknadstillträde och marknadsutveckling inom ett nytt segment av utvecklingsfrämjande energitjänster som riktar sig till fattiga konsumenter vilka redan idag lägger en mycket stor del av den disponibla inkomsten på undermåliga former av energi. BGFA har som övergripande mål att bidra till uppfyllandet av det globala hållbarhetsmålet nr 7 - att säkerställa att alla har tillgång till tillförlitlig, hållbar och modern energi till en överkomlig kostnad. 

BGFA använder en ny och innovativ modell för resultatbaserad offentlig upphandling (Social Impact Procurement) som mobiliserar privata resurser för att bidra till att lösa utvecklingsutmaningar i stor skala. Samtidigt ska BGFA förbättra förutsättningarna för en marknad för hållbara energitjänster, genom att bygga kapacitet och kunskap hos olika aktörer, bidra till samordning om frågorna samt samla in, analysera och följa upp data från energibolag och deras kunder (Platforms for Market Change). BGFA lägger stor vikt vid att säkra additionell finansiering från exempelvis investerare, banker och kreditinstitut. En uppskattning baserad på resultaten i Zambia är att det svenska bidraget katalyserar 3-4 gånger så mycket i privat kapital. BGFA innebär stöd till företag för att täcka risker i samband med uppskalning och växande. Huvuddelen av företagens finansiering kommer från verksamheten - att leverera energitjänster av hög kvalitet till överkomliga kostnader förmänniskor med små och oregelbundna inkomster.

BGFA ska genomföras av Nordiska Miljöfinansieringsbolaget  (NEFCO), en internationell finansieringsinstitution specialiserad på miljöinvesteringar och ägd av de nordiska länderna. NEFCO tillhandahåller resultatbaserad finansiering för miljöinvesteringar, förnybar energi och energieffektivisering. BGFA kommer genomföras av NEFCO i samarbete med Renewable Energy and Energy Efficiency Partnership (REEEP), en österrikisk internationell organisation som fokuserar på att skynda på marknadsutveckling för förnybar energi och energieffektivisering. The Beyond the Grid Fund for Africa (BGFA) is an innovative accelerated energy access financing programme managed by Nefco. BGFA was established by Nefco in 2019 on Sidas initiative, in light of early positive results under the Beyond the Grid Fund for Zambia, a pilot programme launched by Sweden in 2016. BGFA is now a EUR 126 million programme funded by Sweden, Denmark, Germany and Norway. USAID Power Africa is also contributing in kind with technical assistance.

The overarching objective of the BGFA is to create access to basic and affordable renewable energy services for underserved people living outside the national electricity grid and to accelerate private sector growth in energy generation and distribution in Africa.

The ultimate aim of the BGFA programme is the creation of long-term self-sustaining markets that can and will continue to expand beyond the expected four-year country programme implementation and access to BGFA financing. The principal technologies covered are standalone solar home systems (SHS), mini-grids, productive use of energy and a new category, battery rental systems. The BGFA funding lots also differentiate between maturity of companies: smaller, typically locally owned companies (Launch to Scale, or LS) and larger, better capitalised companies (Direct to Scale, or DS) in order to ensure fairer competition and balance the portfolio.

BGFA uses a Social Impact Procurement approach, where public procurement is used to buy developmental outcomes - in this case, by incentivising private companies provision of affordable access to clean energy for low-income customers in hard to reach rural areas. The essence of this approach is to provide public financing needed to offload some of the typical risks for qualified private Energy Service Providers (ESPs) entering a market and help them bring their businesses to scale. The ultimate aim of the BGFA is to accelerate the creation of a long-term financially as well as otherwise sustainable market by kick-starting the market through offering a limited amount of public development funds to ESPs able to deliver and mobilise private funding. BGFA sets requirements for committed co-funding at the time of selection and additional mobilisation over the length of the agreement that must be reported to Nefco.

BGFA is a multi-year, pan-African programme, which contributes to Swedish development cooperation strategy objectives and supports the overarching goal of the Swedish Power Africa mission of contributing to market development and mobilisation of capital, in support of acheiving SDG7 and other energy dependent SDG-goals in Africa. The objectives are:

- to rapidly speed up delivery of high quality energy services and products to 5  15 million rural and peri-urban energy poor customers during the planned initial 6 year programme which include Burkina Faso, DRC, Liberia, Mozambique, Uganda and Zambia;

- to establish public-private partnerships sustainably financing the off-grid renewable energy sector; e.g. through leveraging private finance from 15  40 concessional and private investors;

- to stimulate data-driven, evidence-based decision making for governments, financiers, project developers and other actors through robust and accessible data, knowledge and learning systems;

- to make policy more conducive for off-grid electrification through coordination platforms, that are self-sustaining, run by local actors and interacting with each other;

- to contribute to inclusive and sustainable development in implementation countries, including toward climate change mitigation and adaptation, energy access, gender equality, and other relevant Sustainable Development Goals.

BGFA progress fulfilment of objectives is measured, monitored and analysed systematically, for the BGFA Programme facility in its entirety as well as for each country programme. Reporting is comprised of key data from the energy service companies in terms of service delivery to men and women, geographic spread, payment modalities, employment effects, financial results, leverage of the Swedish funds combined with analyses of market developments in the countries. Assessment of social outcomes and impacts including gender, peace and conflict and human rights perspectives, will be summarised for the BGFA Programme facility in its entirety as well as for each participating country.

BGFA has three pillars to its implementation.

1. Incentives and Procurement. A catalytic procurement pillar providing financial incentives to competitively selected Energy Service Providers (ESPs) in delivering on agreed milestones towards sustainably operating service providers and reaching a set number of customers in the form of active energy service subscriptions.

2. Platform for Market Change, which consists of technical assistance to a) host governments in establishing or furthering a public-private partnership in exploring and addressing market barriers and b) to contracted ESPs in advancing and where necessary adjusting their business model and strategy to be sustainable; and

3. Market information and analytics in the form of monitoring and verification of results that are part of the decision making behind financial incentives being paid out to contracted ESPs and providing evidence and market data that is fed into both the Platforms for Market Change and as evidence used to inform strategic business development advice to contracted ESPs.