Beyond the Grid Fund for Zambia

Inititated in 2016, the Beyond the Grid Fund for Zambia (BGFZ) pilot programme is on track to provide clean, affordable, reliable off-grid energy access with the aim to connect at least 190,000 households – translating to one million Zambians – by 2021. BGFZ is funded by Sweden, through its development cooperation agency Sida, and implemented by REEEP. BGFZ works through a combination of an innovative results-based financing (RBF) mechanism for companies, close cooperation with the Zambian government and real-time data collection and analysis handled through REEEP’s custom-built Edison platform. It provides incentives to four energy service companies to enter the market, offering financing to close the ‘viability gap’, on a per-connection basis, of the rollout and scaling up of clean energy services in areas that would otherwise not represent viable markets. 

BGFZ won the 2019 Ashden Award for Innovative Finance and a 2019 UN Global Climate Action Award.

Beyond the Grid Fund for Africa

Building on the positive experiences of the Beyond the Grid Fund for Zambia pilot programme, The Beyond the Grid Fund for Africa (BGFA) was established in 2019 at Sweden’s initiative as a new funding facility managed by the Nordic Environment Finance Corporation (Nefco), an international financial institution focused on environmental and climate investments based in Helsinki, Finland and implemented on the ground by REEEP.

It is currently focusing on five African countries – Burkina Faso, Liberia, Mozambique, Uganda and Zambia – with the aim to reach six million people with clean, affordable and reliable electricity by 2025. Scaling up from Sweden’s initial contribution of EUR 48 million, the facility has now grown to a EUR 88 million, multi-donor programme, composed of an in-kind contribution from USAID PowerAfrica and contributions from the German Development Bank (KfW) and the Danish Government. Please visit the programme's website at www.beyondthegrid.africa for more information

How BGFA Works

The BGFA approach rests on three pillars:

Calls for Proposals

The backbone of the programmes is an innovative financing mechanism that offers incentives to companies to close the ‘viability gap’, on a per-connection basis, of the rollout and scaling up of clean energy services in areas that would – under current circumstances and in the absence of BGFZ or BGFA – otherwise not represent viable markets. Funding is made available under Calls for Proposals inviting off-grid energy companies to compete for funding

Platforms for Market Change

When fully established, BGFA will work with a range of stakeholders in each of the target countries to improve local market conditions through a combination of capacity building and technical assistance to local energy authorities, general stakeholder outreach and market intelligence development. Through BGFZ this work was formalised as a national Off-Grid Energy Task Force, which is embedded in and led by the Ministry of Energy together with the Office of the Vice President, with REEEP providing secretariat services. Since its launch in April 2018, this Task Force has facilitated, among other things, the implementation of a VAT exemption for LED lights, the drafting of a new national mini-grid policy and the initiation of discussions to improve the affordability of off-grid energy solutions.

Market Information and Analytics

With its aim to reach at least 6 million people in five African countries in the next years, BGFA has the potential to generate very valuable market intelligence, including data on customer willingness and ability to pay. To capture this intelligence, BGFA plans to combine detailed market analysis with real-time data on deployment of energy service subscriptions.

Data from the BGFZ companies is being gathered and analysed through the custom-built Energy Data and Intelligence System for Off-Grid Networks (Edison), which is be connected to the contracted energy provider companies’ internal systems and provide live information on energy service subscriptions sold, payments, upgrades and warranty events, among other data points.

This allows for the verification of the results of these programmes in real time, and access to this data can also help to de-risk future investments in off-grid energy markets and guide policymaking in the countries concerned. Once the expanded programme is under implementation, it is planned that results will be available for the BGFA contracted companies. At present, the progress and impacts of the ongoing pilot programme in Zambia can today be followed live on Edison’s public dashboard (edison.bgfz.org).