30 of April 2020

Covid-19 Roundup

Power for All pulled together a comprehensive Roundup and will continue updating it as things evolve. According to them the decentralized renewable energy (DRE) sector's response to COVID-19 falls into two main categories: 1) ensuring that companies and consumers emerge intact from the crisis, and 2) embedding DRE solutions, both immediately and longer term, into the nexus between “energy for all” (SDG7) and “healthcare for all” (SDG3).


Sector Support


With many businesses temporarily dormant due to the lockdown and expecting to reach a financial cliff in 3-4 months, multiple company surveys show that the biggest threat for all types of businesses -- solar home systems, mini-grids, appliance manufacturers and distributors -- is a financial one, specifically the need for bridge loans, operating capital and grants. Efforts are also being discussed on how to support customers who have reduced ability to pay for energy services because of COVID-19.


Financial support: 

Near term: The COVID-19 Energy Access Relief Fund is an Energy sector-wide €100 million concessionary debt fund to help companies get through the fiscal challenges of the coming months. Expressions of interest are already being accepted on the website, where eligibility criteria are also listed.

  • Longer-term: the United Nations has called for a $2.5 trillion recovery fund for developing countries, with a focus on Africa and women, and SEforALL has been tasked by the Secretary General to determine how to include energy access and SDG7 in the stimulus.
  • Separate from the relief mentioned above, many foundations and impact investors (see SunFunder CEO comments about “going to support the industry through this crisis and beyond”) with existing DRE portfolios have also said that they have set aside additional bridge funds for companies they already support. 
  • Some development banks and large bilateral donors say that due to institutional constraints they will not be able to activate new capital during the immediate COVID response, but instead are working to redirect money from existing programs to help.
  • At the same time, there is discussion about support to customers who may be unable to keep up energy payments during the crisis, although it's unclear if this challenge will be addressed from the supply side or the demand side. 60 Decibels and GOGLA are looking to fast track a survey to better understand consumer impact. This write-up by BFA Global summarizes the issue well.
  • Crowd-funding platforms like Energise Africa are also working to adjust to the new reality.

Technical support:

Power Africa, GET.Invest, the Global Distributors Collective, PFAN and others (CGAP is helping on coordination behind the scenes) are already looking at ways to offer increased technical assistance, making dozens of experts available to help private sector companies with risk management and scenario planning, Implementing force majeure clauses, processing rapid liquidity financing and other legal needs. Organizations like Power for All, GOGLA, and the Energy Access Action Network are working to make sure that companies are aware of this assistance and able to access the resources that they need.


SDG7 and SDG3


While immediate steps are being taken to prop up the DRE sector companies and their customers, action is also underway to ensure that the sector’s role in electrifying rural health clinics is fully factored into both the immediate COVID-19 response, as well as a longer term, systemic solution to addressing the problem of the 500 million people who are still served by rural health clinics that are unelectrified. For a summary on the value that the SDG7 sector can bring to SDG3, SELCO Foundation hosted a webinar with key stakeholders, accessible here. Various initiatives are also under way:

Financial support: 

One big outstanding question: what is going to be the role of the Health and Energy Platform for Action (HEPA) announced last year by the World Health Organization (WHO) and UNDP. HEPA was launched with a focus on clean cooking and electrifying health facilities with renewable energy but has since been silent.

  • Some country funds are already being set aside to increase clinic electrification, such as the AllOn fund for Nigeria, while the Rural Electrification Agency there is also moving quickly. Similarly, pre-COVID the African Development Bank approved funding to install solar and batteries on 500 primary health centers in rural Togo. Apparently, one main obstacle to expediting that work, which is the scale of ambition required, has been onerous procurement requirements. In response to COVID-19, the World Bank says it has already put out emergency procurement guidelines that allow for “direct selection” of suppliers.
  • One bilateral aid agency, which asked not to be identified yet, is also working on a $2 million grant competition to help health facilities better position themselves for COVID-19 response, and to explore innovative business models to make systems sustainable in the longer term.

Technical support:

CLASP and SEforALL and a large working group (World Bank, AfDB, Clinton Health Access Initiative, etc) are coordinating with the health sector on technical aspects of clinical care for COVID patients and related equipment and power system needs and fostering better health and energy sector coordination. DFID is meanwhile working with WHO to figure out how to address different technical standards for what are often life-saving medical devices, since they vary country to country.

  • The World Bank has already been working on rural clinic electrification for some time (see this comprehensive summary), and it will continue to focus on sustainable solutions that focus on long-term electricity service delivery rather than just procurement and installation of solar PV. In the meantime, it is working to address the COVID-19 pandemic by accelerating existing projects with components on electrification of health institutions and providing technical assistance on the ground, including guidance on fast tracked procurement. In response to COVID-19, the World Bank is looking at hybrid solar/diesel systems to start but wants to make systems fully sustainable (affordable over time, clean) and potentially combined with community mini-grids. 
  • The private sector is also looking to make a difference. Mini-grid players Odyssey Energy Solutions and Africa Mini-Grid Developers Association (AMDA) are working to identify rural health facilities that are “shovel ready” for electrification by DRE companies. It appears that the number of potential projects is already in the hundreds. Besides projects that are already on the Odyssey platform, others can be added to a tracker sent out by AMDA. Solar Kiosk and UNITAR have also put forward a pandemic rapid response concept that looks promising, as have Winch Energy and Differ Group. SELCO Foundation is also working to do need assessments in Sierra Leone and Burkina Faso. 
  • Schatz Energy Research Center is working with the World Bank on developing a quality assurance framework that uses remote monitoring and financing measures to help guarantee long term functionality of solar installations at public health clinics. 

Read the full article here.


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