SOARING (Southern African Renewable Energy Investment and Growth)
Enabling SMEs working with productive use of renewable energy for agriculture
About this Programme
The agricultural sector still plays a major role in Southern African economies, representing up to 27% of GDP and 13% of export earnings. Southern African countries face a considerable challenge in financing their climate change mitigation and adaptation plans.
Small and medium-sized enterprises (SMEs) form the backbone of transitioning the agricultural sector in Southern African economies, for example, as distributors of solar-powered water pumps to cooperatives and farmers or fish drying through solar for local fisherman to increase their revenues. However, as such SMEs are often early-stage companies, they are still perceived as too risky in the eyes of many banks and, therefore, struggle to access finance. National development banks, as well as commercial banks, are increasingly gaining access to climate/green funds but are lacking the capacity and tools to build an investment pipeline to finance SMEs working on transitioning energy and agriculture.
SOARING is active in
The four pillars of SOARING
- Platforms for Market Change
- Climate finance capacity building
- Pipeline support
- Credit enhancement facility
Our Solution
REEEP, in partnership with RENAC, is implementing the Southern African Renewable Energy Investment and Growth (SOARING) programme to comprehensively address market barriers national development banks and local financial institutions are facing in financing clean energy projects and businesses.
SOARING provides credit enhancement instruments to participating financial institutions, as well as targeted capacity buildings and trainings on clean energy/climate finance and support in the origination of a clean energy pipeline to access funding. The insights derived from SOARING will enable REEEP to extend our work on local and sustainable financing solutions.
With SOARING, REEEP and our partners are simultaneously supporting SMEs to provide clean energy solutions in rural areas and for agricultural value chains, countries to advance the NDC targets by displacing fossil fuels, and rural communities through improved resilience with access to clean and reliable energy.
The programme focuses on Zambia and Tanzania using blended finance instruments and green finance tools to unlock local currency financing to the sector via the existing infrastructure of national development banks and local financial institutions (participating LFIs), which provide the required penetration and capillarity to reach green SMEs and their end customers.
It assesses various essential aspects of supporting SMEs, including supply, demand, framework conditions for several SME-level clean energy alternatives in agricultural value chains and off-grid power provision for rural and peri-urban areas.
Thus far the SOARING programme has trained more than 10 major banks and financial institutions in the two countries with a total of 60 participants trained from these institutions. it has further provided capacity building on renewable energy financing for more than 120 participants from government institutions, regulatory bodies and civil society organisations.
Ecosystem approach
Platforms for Market Change
Establishment and management of local platforms for market change to engage key stakeholders to discuss barriers and potential solutions for local financial institutions to finance renewable energy SMEs and access international climate funds.
Climate finance capacity building
Capacity building and technical assistance to bridge the gap between financial institutions and clean energy small and medium enterprises (SMEs), covering climate finance, business models of off-grid and productive use of energy technologies, credit and risk assessment tools and support to sector-suitable financial product design.
Pipeline support
Support for pipeline origination and preparation with specialised technical assistance, project development and documentation, due diligence and risk assessment tools targeted to renewable energy companies.
Credit enhancement facility
Credit enhancement to cover first loss of loans to eligible companies focusing on productive uses of renewable energy. This simple, cash-based approach more effectively decreases risks for local financial institutions in Tanzania and Zambia.
Donors and Partners
Funder
Implementing Partner