In the lead-up to the Africa Energy and Infrastructure Investment Forum, we spoke to some of the key market participants who will also be on stage as panelists in London.
This Interview Series, gets to grips with what is front of mind for many developers and financiers as the African energy and infrastructure landscape evolves. Our speaker, Laura Sundblad, Program Manager – Access to Finance, GOGLA (Global Off-Grid Lighting Association) in the Netherlands, shared her insights on some of the key challenges and opportunities.
If you could have any (industry-related) question answered at the conference, what would it be?
I would love to talk about how the off-grid and utility-scale solar sectors can interact more in the markets in which we are both operating. What are our common concerns, where do we both see opportunities? I think there is a lot more we can learn from each other, including on how to catalyse and facilitate investments into newer markets and technologies, and on how to build fair, consistent and effective policy frameworks for our industries.
What has been the most interesting development in sub-Saharan Africa energy and infrastructure this year, from your perspective?
In off-grid electricity service provision and business models continue to evolve and in 2017, an exciting development was the increase in specialized players entering the value chain as the market continues to grow. For example, we are seeing companies offering B2B services including IoT service provision, logistics, HR, and recycling increasingly serving the off-grid sector, and we are seeing off-grid companies entering into new partnerships that build on their respective comparative advantages, whether that be manufacturing, distribution, financing or software services. These developments can help improve efficiency and drive down costs in the off-grid market, and accelerate growth to reach more customers quickly.
If you had a magic wand that could do anything for the industry, what would you wish for?
I would rapidly increase the availability of local currency financing for off-grid solar enterprises, preferably by local commercial banks! These types of deals are still too few and far between, and are essential for the sustainable growth of the sector.
Do you expect to see more business in distributed storage or in centralised grid facilities as sub-Saharan market develops?
I do expect to see growth in both, but I see the off-grid sector as an increasingly dynamic space where there is a lot of potential across the continent. Within distributed solutions, there is a lot of diversity in the customer base, ranging from households accessing their first modern electricity services to SMEs improving their productivity and output through access to stable, affordable power. There is also diversity in geographies served, with West African markets growing at a rapid pace and some starting to catch up with the East African pioneers (as shown by GOGLA’s biannual global sales data reports). That’s why, while there may be hiccups or slowdowns in individual customer segments or country markets due to external volatilities, the overall story in off-grid will continue be one of growth and expansion.
Where do you expect deal flow to come from in sub-Saharan Africa in the coming years?
In off-grid solar, financing customer receivables in the pay-as-you-go segment of the market has been crucial to enabling scale-up of off-grid solar service providers (in 2017, some of the flagship deals included M-KOPA’s US$80 m debt facility and Mobisol’s eight-digit off-balance sheet debt deal). This will continue to be a major driver for deal flow in the coming years. Beyond that, there will likely be some more exits taking place (Engie’s purchase of Fenix made headlines in 2017) and hopefully new equity investments into the next generation of off-grid solar companies, whether customer-facing or B2B.
Africa Energy and Infrastructure Investment Forum – Speaker Profile
Program Manager – Access to Finance, GOGLA
Laura serves as the Program Adviser for GOGLA’s ‘Facilitating Access to Finance’ program. The objective of the program is to help increase investments in the sector that will allow it to scale up and accelerate the development of the off-grid market, leading to more people benefiting from clean, sustainable and economically viable off-grid lighting and electrification. Prior to joining GOGLA, Laura worked at Arc Finance, where she oversaw staff training and consumer education efforts related to consumer financing for energy products and services, and led Arc Finance’s conferences and workshops on innovations in financing off-grid clean energy. Laura holds a Master’s degree in International Relations from the University of St Andrews, as well as a Master of Public Administration degree from Columbia University.
To register for the Africa Energy and Infrastructure Investment Forum click here