Impact
USAID’s Power Africa Off-grid Project (2018–2023) provided technical assistance, access to financing, and targeted grant funding to support the development of Africa's off-grid solar home system and mini-grid sectors
Objective
Accelerate off-grid electrification across sub-Saharan Africa.
Approach
Provided off-grid energy companies with tailored technical assistance to help them grow sustainably; offered off-grid energy financiers and investors broad-based market intelligence to inform capital investments; advised governments on policy frameworks that supported the growth of the off-grid energy sector; and managed the USAID-funded Catalyzing Off-grid Investment Fund, which awarded grants for piloting and scaling sustainable business models that increase energy access.
Impact
Improved markets and regulatory mechanisms and access to private financing resulted in increases in the total number of off-grid connections and improved development outcomes across 26 countries.
Updated
Access to reliable electricity is vital for human wellbeing and economic growth. It illuminates homes and classrooms, facilitates communications, powers medical devices for improved healthcare and diagnostics, keeps vaccines cool, pumps water for household use, sanitation, and irrigation, and powers equipment and machines that catalyze growth for small businesses. To enable such activities and strengthen resilience to climate impacts, electricity must be both available and affordable, even in remote areas.
This has been challenging in sub-Saharan Africa, which has many remote communities that are not served by a utility-provided electrical grid. Fortunately, solar, wind, and hydro systems can go where the grid cannot. As the price of renewable energy continues to drop, sub-Saharan Africa is presented with a growing menu of options for expansion, bringing a fully powered future into reach.
Getting power to off-the-grid communities
Launched in 2013, Power Africa is a United States Government-led partnership, coordinated by USAID, that brings together the collective resources of over 170 public and private sector partners to double access to electricity in sub-Saharan Africa. In 2018, USAID awarded RTI International the Power Africa Off-Grid Project to accelerate access to off-grid electricity across sub-Saharan Africa. The Project operated primarily in the following focus countries: Cameroon, Côte d’Ivoire, the Democratic Republic of Congo, Ethiopia, Ghana, Kenya, Liberia, Niger, Rwanda, Senegal, Tanzania, and Uganda. The Project’s work and grants program also positively impacted 14 additional African countries: Benin, Burkina Faso, Chad, Guinea, Lesotho, Madagascar, Malawi, Mali, Mozambique, Nigeria, Sierra Leone, Somalia, Togo, and Zambia.
RTI and Power Africa shared the vision of achieving that goal in part by increasing the number of off-grid companies operating in the region. As the prime implementer of the program, RTI led a consortium of partners to expand the number of actual off-grid connections in the region, secure private and commercial financing for off-grid companies and improve national off-grid market and regulatory structures.
The five-year program succeeded in bringing clean power to 7.22 million sub-Saharan African households and businesses, exceeding the original target of 6 million. Significant off-grid connections were achieved across 26 countries. The rapidly growing countries of Kenya and Nigeria reported the highest number of connections, at 2.87 million and 1.12 million respectively. The total number of new grid and off-grid direct connections is expected to increase by 12 million upon completion of activities funded through investments catalyzed with support from the Project.
Catalyzed private financing for off-grid companies & projects
Sustaining the growth of off-grid companies and projects requires significant public and private sector financing. The Project mobilized $1.22 billion in investment capital for energy projects—far surpassing the original goal of $500 million—throughs targeted interventions with private sector companies, governments, investors, and donors to make off-grid electrification more attractive for investment. This approach served to increase the number of off-grid companies active in sub-Saharan Africa and drive down sector costs, making energy more accessible and affordable to consumers.
The Project engaged investors and provided private companies with the support needed to begin investing in off-grid businesses and grow existing investments in the sector. The support included providing market intelligence, such as commissioning and publishing off-grid energy market research; facilitating dialogue between existing investors active in the off-grid sector and new potential market financiers; identifying tailored solutions for off-grid solar companies to improve sales; and catalyzing capital for the off-grid energy sector.
Since off-grid projects and companies are extremely vulnerable in the early stages of development, the project developed and administered the Catalyzing Off-Grid Investment Fund. The Project issued grants to various project developers and private sector actors to support companies and projects in attracting the necessary financing from the investment community.
Off-grid companies also received technical advisory support aimed at encouraging growth, such as facilitating introductions to private investors and financiers; developing, testing, and refining new business models; and offering business advisory services. As a result of this support, off-grid companies sold 92,155 productive-use off-grid devices or systems—558% of the target. These included solar-powered agricultural processing machines, water pumps, refrigerators, among other items.
Improved market policy and regulatory environment
To further support increases in off-grid connections and better access to private capital for the commercial off-grid sector, the Project advised governments on private-sector-friendly policy frameworks. This included strengthening institutional and regulatory frameworks for mini-grids and solar home systems; supporting rural electrification plans, programs and policy and regulatory frameworks; and supporting tax exemption procedures for solar equipment.
As a result, the Project secured improved off-grid policies and regulations for 12 African countries, one more than targeted. In total, 78 laws, policies, regulations, or standards to enhance energy sector government were formally proposed, adopted, or implemented. The Project also improved the environment for off-grid investment, sales, distribution, and operation on the national level by providing technical assistance to national governments, advocating for better tariff and value-added tax structures, and supporting regulatory and policy review processes.
Enhanced gender equity and health care
To advance Power Africa’s commitment to increasing women’s participation in the male-dominated energy sector, the Project assisted the public and private sector in adopting and implementing gender-inclusive practices and supported gender lens investing, resulting in 23 gender action plans being implemented across sub-Saharan Africa.
The Project also supported the electrification of more than 220 healthcare facilities by providing grants and technical assistance to off-grid energy companies which resulted in more than 2 million people across 10 countries having improved access to an electrified health care facility where off-grid solar energy systems guarantee the continuous supply of essential services.
An energized, climate-resilient future
The Project effectively advanced the rural and off-grid energy landscape that will serve as a platform for long-term economic and social development, while increasing renewable, off-grid solutions with the potential to significantly reduce emissions and increase communities’ resilience to adverse climate effects.
RTI drew upon its experience in implementing complex, multi-sectoral projects to remain adaptable, innovative, and close to the communities served by this ambitious and game-changing initiative. We are proud to have assisted the U.S. government in reforms that brought energy to millions of households and small businesses in sub-Saharan Africa, including many that experienced electrical service for the very first time.
