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Sustainable Energy Market Acceleration (SEMA)

Accelerating the sustainable energy market in Africa through partnerships


YEARS

2011-2014

CLIENT DESCRIPTION

The European Union's Energy Facility (EF) is a co-financing instrument that allocated EUR 420 million for 2006-2013 to support projects that increase access to sustainable and affordable energy services for the poor in African, Caribbean and Pacific countries.

CLIENT'S OBJECTIVE

The EU Energy Facility selected Enclude's proposed SEMA project to meet its objective of increasing access to sustainable and affordable energy services in rural areas. SEMA, an ongoing project, facilitates the process of using existing rural networks in Kenya, Uganda and Tanzania as channels for renewable energy retailers to reach rural customers. Existing rural networks include village banks and Savings and Credit Cooperatives (SACCOs).

Results

BUSINESS RESULTS

By the end of the first year, 29 Savings and Credit Cooperatives committed to the project; among them, 207 staff have been trained; 12 received marketing support, and three are rolling out new loan products.

By the end of the first year, three entrepreneurs are building the capacity to expand their energy services.

To date, 18 tools have been developed that support the five phases of the process:

  • To prove the business case to financial institutions (Phase 1), SACCO selection tools, a board presentation and market research have been developed
  • To structure the process (Phase 2), Memoranda of Understanding templates, energy finance product development and stock management tools have been created
  • To build capacity (Phase 3), SEMA has developed staff training, product knowledge, procedures, and customer care tools
  • To allow for efficient follow-up and marketing support (Phase 4), monitoring sheets and monitoring planning tools have been designed
  • To help expand access to finance at both the financial institution and renewable energy entrepreneur levels (Phase 5), the monitoring sheets and quarterly update templates will be used.

These tools will be finalised in the form of a coherent toolkit by the end of the project and will be published on the SEMA website as an open resource.

SOCIAL & ENVIRONMENTAL OUTCOMES:

As of March 2013, 2,027 small businesses in rural Uganda and Kenya now have access to sustainable energy as a result of purchasing clean energy devices directly from financial institutions. In Uganda, financial institutions sold 302 solar units; in Kenya, financial institutions sold 68 biogas units and 1,239 solar units.

396 small businesses in rural Uganda and Kenya now have access to financing to purchase sustainable energy units. 106 energy loans have been made in Uganda and 290 in Kenya.

Activities

Conducted initial market research to identify rural energy entrepreneurs and financial institutions, including village banks and Savings and Credit Cooperatives (SACCOs), that want to expand their sustainable energy services.

Monitoring the commercial transactions between consumers, energy entrepreneurs and financial institutions; provide technical assistance to lower transaction costs (including TA for professionalisation of the business, develop (financial) products, risk management).

Preparing to scale up by conducting additional market research, defining business models and ensuring access to business finance for energy entrepreneurs and appropriate capital for partnering financial service providers.

Next step: scale up to new regions, involving additional financial institutions and energy entrepreneurs.

Future: share tools, consult with stakeholders.

Local shop selling solar lighting kits

LEARNINGS

Relationships matter. In order to create lasting partnerships that will continue long after the project’s end, it is critical to understand your partners, how they communicate, and to treat all parties with respect.