A new study assessing the commercial and economic feasibility of enhancing off-grid solar inclusion in sub-Saharan Africa indicates that solar home systems (SHS) could offer the most cost-effective solution for providing electricity access for most unserved segments in the region.
Commissioned by the European Investment Bank and the International Solar Alliance, the study confirms that 120-million households across Africa lack access to reliable and affordable energy and that 60-million households are expected to remain without electricity by 2030.
This reality jeopardises the achievement of Sustainable Development Goal 7 (SDG 7), which aims to ensure universal sustainable electrification by 2030.
“Despite significant strides in the past decade on achieving SDG 7, a large population has been left behind,” the study states.
Five common challenges are identified, including:
- low customer affordability for SHS products;
- uncertainty in markets to effectively run businesses or drive sales;
- difficult last-mile distribution and resultant high costs to serve remote populations;
- insufficient liquidity stemming from constrained working capital availability; and
- instability in the political and economic environment.
The study concludes that blended finance – which combines the powers of development finance institutions, bilateral and multilateral funders and governments – has a strong role to play in catalysing and accelerating markets to reach unserved segments.
Having complete the feasibility study, the report proposes further engagements with African countries to create an appropriate financing structure to support a scaling up of off-grid systems, including SHS solutions.
“The ground-breaking analysis demonstrates how closer cooperation between African, European and global partners can unlock investment and technical barriers that hold back sustainable development and the green transition,” European Investment Bank VP Ambroise Fayolle said in a statement.
International Solar Alliance director-general Dr Ajay Mathur added that the study details what can be done to increase access to clean energy for off-grid rural areas, including refugee camps, urban areas and remote villages across Africa.