This study, sponsored by the Beyond the Grid Fund for Africa (BGFA) and funded by the Swedish International Development Cooperation Agency (Sida), aims to expand productive uses of energy (PUE) activities. BGFA provides funding through results-based financing (RBF) for companies selling solar home systems (SHS) and developing mini-grids, with over €126 million allocated to support projects across several African countries. As of December 2022, BGFA had signed contracts with 13 projects expecting to provide over 953,000 connections, including companies incorporating PUE appliances into their products. BGFA also provides technical assistance (TA) for the sector, advocating for policy and regulation and offering TA to portfolio companies.
As the off-grid sector expands, attention has shifted towards boosting PUE by consumers, which offers broad socio-economic benefits such as economic growth, income generation, and job creation. Donor-led initiatives, ranging from upfront grants to pure RBF programs, have played a crucial role in fostering PUE sector growth, particularly when supported by governments. However, challenges persist, including long procurement times, inflexibility in program requirements, and market distortion potential.
Technical assistance and supportive policies are crucial for creating an enabling environment for the private sector to deploy PUE solutions effectively. While recent PUE initiatives have shown promise, challenges remain, including affordability, financing risks, supply chain complications, and competition with incumbent technologies. Despite these obstacles, the PUE market is gradually evolving, with some technologies scaling in certain regions, indicating potential for further growth with collaborative efforts between governments, donors, and the private sector.
See more :
Nefco-PUE-Market-Assessment-March-2023.pdf (beyondthegrid.africa)
