ARTICLE: Raconteur/ The Times – Financing sustainable energy for developing economies

ZOLA Electric is a solar-as-a-service company providing clean energy to rural Tanzania and Rwanda

Impact investing is a major opportunity for developing economies and provides basic services to the poorest people

More than a billion people still live without access to electricity, according to the World Bank. Living without this necessity has a detrimental effect on their health, education and earning potential.

The World Health Organization, for example, estimates that around 3.8 million people a year die prematurely from illness attributable to household air pollution caused by solid fuels and kerosene used for cooking.

Yet there are solutions to serve those with no access to the grid. Off-grid solar systems, battery storage and solar or bio-powered cooking stoves are transforming the lives of rural communities in sub-Saharan Africa and beyond.

Off-grid systems need financing to achieve goals 

Two of the most successful providers include Greenlight Planet, a for-profit firm that designs, distributes and finances solar home energy across South Asia and Africa, and ZOLA Electric, formerly Off-Grid Electric, which uses mobile money to sell solar-powered electricity as a service.

The United Nations’ Sustainable Development Goal 7 aims to ensure access to affordable, reliable and modern energy for all by 2030. Bloomberg New Energy Finance estimates that to achieve this $350 billion is needed: $130 billion for grid extension, $165 billion for micro-grids and $55 billion for solar home systems.

To achieve the goal, financing for clean energy firms like ZOLA Electric is fundamental. Yet for these startups, securing finance is often the main challenge.

Typically, local banks are unwilling to lend as they don’t yet understand the technology, and Western investors are put off by the risk, volatility and low returns associated with working in developing nations and this frontier sector.

Blended finance model key for unlocking investor funds 

However, innovative finance modelling is unlocking money from financiers who are under increasing pressure to measure the carbon impact of their portfolio.

US-founded SunFunder has demonstrated a successful model for unlocking investor funds with blended finance.

READ THE FULL ARTICLE HERE 

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