USAID announced that it is investing $4 million into eight African solar start-ups through a competition called Scaling off-Grid Energy: Grand Challenge for Development. USAID’s commitment will provide 120,000 homes in off-grid communities across Africa with solar power.
The awards will fund the companies that are testing forward-thinking business models to help expand existing African solar markets, improve distribution of electric generation resources and decrease energy costs for customers.
The Grand Challenge for Development is initially focussing on existing residential solar markets. It is a $36 million initiative by Power Africa, United Kingdom’s Department of International Development and the Shell Foundation to bring together entrepreneurs and investors to connect 20 million households in sub-Saharan Africa with renewable and affordable electricity by 2030.
"With aligned partners like Microsoft, Acumen, and the United Nations Foundation who are investing in or supporting the off-grid solar sector, we can accelerate the growth of the household solar sector in Africa," said Power Africa Coordinator Andrew Herscowitz.
"The Grand Challenge for Development is designed to support innovators like these eight companies who are scaling up their inventions. The options for powering your home and business are changing, and these types of innovations will create opportunities to transform the power sector in homes across the planet," Herscowitz said.
The eight start-ups hail from Uganda, Ghana, Kenya and Zambia and were awarded funds through USAID’s Global Development Lab. Applicants to the competition were evaluated based on cost effectiveness, evidence of success through data collection and proposals to up-scale projects if proven effective.
The opportunity in the off-grid solar market is large. It could reach $3.1 billion by 2030, benefitting an increasing number of the 1.2 billion people in the world that do not have access to electricity, according to a report published by the World Bank Group’s Lighting Global and Bloomberg New Energy Finance.
Innovative business models and cooperative investment agreements continue to expand Africa’s electric generation capacity and solve challenges of off-grid solar markets. For instance, in pay-as-you-go (PAYG) solar systems have been implemented by at least 20 companies, like the Greenlight Planet project operating in Nigeria and Uganda that received funding through this offering, are expanding sales of low-cost solar home solutions through state of the art pay-as-you-go technology and deep distribution networks. that enable customers to purchase a solar kit without having to invest large amounts of capital. Additionally, the World Bank’s International Finance Corporation (IFC) announced this August the launch of a web portal to expedite mini solar producing electric grids in Tanzania that will enable 9.1 million people access to electricity.Tweet