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Op-Ed: The Silver Lining For Distributed Renewable Energy Solutions Post Pandemic

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Image supplied by Africa Energy Platform

The Covid-19 pandemic has had significant impact across all sectors including access to electricity. The Distributed Renewable Energy (DRE) sector that provides decentralized energy access to users although equally hit by the pandemic can take advantage of new opportunities for the industry to thrive and grow. With the right support, funding and enabling environment, DRE solutions can become mainstream and play their part to improve access for the 789 million people still lacking electricity. 

Mama Esther has lived in my hometown in Eastern Nigeria for most of her life. She is a small-scale ‘Nsukka’ (yellow peppers) farmer who would typically harvest a few baskets of pepper, some tomatoes and other perishable products daily.

My village has not had grid electricity for more than 30 years and the closest to any form of such are the poles which once had cables connected to them. Towards the end of each market day, Mama Esther will have to sell her products at giveaway prices, barter some of it while the rest will go to waste because the lack of electricity supply means the products cannot be stored.

Mama Esther, just like other small-scale farmers, tends to lose a large percentage of her produce due to the lack of electricity for processing and storage. She remains a small-scale farmer, unable to escape the poverty trap as she cannot transition into producing higher value agricultural products to increase her disposable income, or at the very least maximize her income by reducing losses.

This inadequate access to electricity affects most aspects of life in developing countries – childbirth in poorly lit hospitals, inability to store blood and vaccines safely, children who are forced to study using candlelight, businesses who are unable to operate for longer hours to increase their profitability, and much more.  While the Covid-19 pandemic has made these situations more dire, it presents an opportunity for Distributed Renewable Energy (DRE) companies to make a positive impact.

DRE during a pandemic 

Distributed Renewable Energy companies have been providing customers with power, cooking, heating and cooling systems that generate and distribute energy independently of the centralized grid systems over the last few years and currently serve over 100 million people in both urban and rural areas of the developing world, and these numbers continue to increase annually.

Reports by The Economist and the IRENA Global Renewables Outlook 2020 highlighted that the outbreak of coronavirus has had significant impacts on the energy transition, particularly threatening global supply chains in the renewable energy sector.

Indeed DRE companies are facing their share of the Covid-19 induced challenges; surveys conducted by SEforAll shows that they are expecting to lose between 27% to 40% of their revenues in the coming months. In addition, their growth plans are likely compromised, and they have to take precautions to protect their staff and customers. They continue to advocate for ‘essential service’ status to enable them meet the needs of their customers and closely monitor their inventory given the impact of the virus in key component manufacturing countries.

DRE evolving under pressure        

While concerns remain that the pandemic has slowed down some of the progress that off-grid energy companies have made in the last few years, a closer look shows that the DRE sector is able to continue improving access to electricity by leveraging some of the resulting effects of the crisis.

DRE becoming mainstream as the solution of choice to complement bad grids or inadequate supplies: In regions where the electricity grid is unreliable or even non-existent, the Covid-19 pandemic added a strain to the requirements for reliable energy for health facilities, essential enterprises, citizens sheltering and working from home, and vulnerable communities. In these regions, DRE systems are increasingly serving as a complement to the centralized/ grid energy generation systems, or as a substitute. They provide an often cheaper alternative and sometimes provide the entire energy requirements for essential facilities.In fact, utilities are now receptive to the option of partnering with DRE developers like mini-grid companies through the increasingly popular “under the grid” models. The speed of deployment especially during the pandemic has been important, with installations within a few weeks, coupled with the plug and play nature of some solar home systems. Through simplicity, nimbleness, and mutually beneficial collaborations, DRE companies are becoming a popular choice to meet critical energy needs.

The growth of the Local Supply Chain: The Covid-19 pandemic led to delays in supply of imported solar components and stocking out due to restrictions affecting logistics. Players in the African solar industry are now seriously exploring local solutions to reduce import dependence. Some existing local companies who have been meeting local needs for almost a decade and local content requirements in countries like South Africa and Morocco have supported the growth of the local market. In fact, other local assemblers have experienced an up to 7X increase in demand for their locally assembled solar panels and are now exploring ways to increase their capacity. This is clearly an opportunity for enabling policies and incentives across African countries to help expand local manufacturing. This would enable value-chain competitiveness and support access to sustainable energy for all.

Promoting the Financial Credibility of DRE customers through increased Financial Inclusion leveraging mobile money: The restrictions in movement during the pandemic  has led to a significant increase in mobile payments across Africa; even beyond East African markets that have well advanced mobile money systems. With energy payments now ranking as a crucial expense just after food, school fees and medical payments, these mobile micro payments become the first channels for financial inclusion of the vulnerable DRE customers, who begin to build credit. Indeed energy companies such as M-KOPA receive over 30 million mobile money payments per day. With stronger financial credibility of their customers, DRE businesses may see a strengthened position during fundraising processes and as they scale their operations.

Ujunwa Ojemeni

The saying goes “never let a good crisis go to waste”, and as seen above, the DRE sector is able to find its way through the crisis as its solutions continue to take their place in the energy mix. Only by supporting these DRE solutions through enabling policies, affordable technology, suitable funding options and business support would we help women like Mama Esther to move out of the poverty trap, save lives in our health facilities, help students to study at night, enable businesses to thrive and much more. 

By Ujunwa Ojemeni, an impact investing, energy development and policy expert. She provides her expertise to drive access to energy in Africa through the Office of the Lagos State Commissioner for Energy & Mineral Resources, and is an Advisor with the Private Finance Advisory Network (PFAN). She holds degrees from the University of Nigeria and the University of Manchester, in addition to certifications from the International Finance Faculty and Florence School of Regulation. She is also an Alumni of the Open Africa Power program for young African Clean Energy Leaders by Enel Foundation. To promote the participation in the energy sector, she founded the African Women in Energy Development Initiative (AWEDI Network) focused on promoting the growth of the women in the sector through mentorship programs, career sponsorship (acceleration), networking opportunities, professional development and leadership training for women at all stages of their energy careers and for female students at the secondary and tertiary levels.

Current Affairs

Sustainable Development In Africa Can Be Amplified By The Media

The COVID-19 pandemic has struck the world like a bolt of lightning exposing the contours of deep inequalities. Media reports have helped reveal the interwoven threads of inequality and health, with poorer people suffering a strikingly disproportionate share of the fallout from the virus, either through infection or loss of livelihoods.

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In 2018, the United Nations Secretary-General Mr António Guterres, launched an SDG Media Compact to leverage their resources to advance the Sustainable Development Goals. By disseminating facts, human stories and solutions, the Compact is a powerful driver for advocacy, action and accountability on the Sustainable Development Goals. Photo- UN

When 17-year-old high school student Darnella Fraizer filmed the last minutes of George Floyd’s life under the knee of police officer Derek Chauvin, she could not have imagined that her footage would reignite the explosive global question of racial inequality and the subsequent clamour for reforms in policing.

This act of filming validates the force of the media globally, we need a similar drive for urgent action in Africa. We need the continent’s media to help ensure the Sustainable Development Goals (SDGs) are achieved and the life of every African afforded the opportunity they deserve.

“Around the world, success in achieving the SDGs will ease global anxieties, provide a better life for women and men and build a firm foundation for stability and peace in all societies, everywhere,” said the UN Deputy Secretary General, Amina Mohammed

Even before the COVID-19 pandemic, a wave of demonstrations from Lebanon to Chile, from Iran to Liberia, was sweeping across countries. This was a clear sign that, for all our progress, something in our globalized society is broken.

The COVID-19 pandemic has struck the world like a bolt of lightning exposing the contours of deep inequalities. Media reports have helped reveal the interwoven threads of inequality and health, with poorer people suffering a strikingly disproportionate share of the fallout from the virus, either through infection or loss of livelihoods.

The global sweep of protests due to years of disenfranchisement and racism has made it clear that the world must change to offer equal treatment to all people.  

Media can do the same for the Sustainable Development Goals (SDGs). Achieving the SDGs, and so improving the lives of millions of Africans, depends heavily on increasing public awareness, and on the focused action and funding that such awareness ignites.

One major shortcoming of development progress is the lack of widespread knowledge about the SDGs and the 2030 Agenda. We must look to the media to push the SDG discourse; what is reported and how it is reported helps shape policy and has implications for the millions of people whose lives are affected. Knowledge is power and if citizens are aware of the issues, they are empowered to help determine the national response.

Traditionally, development experts have failed to explain the relatively new concept of sustainable development to influencers such as educators, politicians, and the media. Doing so is key, so that easily understood narratives are developed to raise public support.

We are already a third of the way towards the 2030 Agenda deadline which 193 UN member states committed to. But at the current pace of change – notwithstanding the global pandemic – Africa is likely to miss out on the time-bound targets in key sectors – including health, education, employment, energy, infrastructure, and the environment. 

Improved public awareness of the SDGs themselves, and of the actions needed and the bodies responsible for such actions is essential. By stepping up to address and explain the global quest for social justice and equality which the SDGs represent, the media can help galvanise civil society, business, international bodies, regional organizations, and individuals.

Pressure from an informed public, pushes policymakers into action, offering hope to millions of poor people.

Development is never far from the media agenda in Africa, so the opportunity to build understanding of sustainability is there. Sustainable development experts must explain why the SDGs are important, and why ‘business as usual’ in development is no longer viable in the face of increasing populations and climate change. Then, news outlets, who would then be able to develop compelling narratives to make the concept understandable by all can help raise the SDG profile, thereby raising public support.

We must “flip the orthodoxy”.

What is reported, how it is reported, and on what channels helps in shaping policy and has implications for the millions of people whose lives are affected.

To this end, the media must be brought into the conversation and be made to understand the role they can play towards the greater good.

The SDGs pledge that “no one will be left behind” and to “endeavour to reach the furthest behind first.” In practice, this means taking explicit action to end extreme poverty, curb inequalities, confront discrimination and fast-track progress for the furthest behind.

The media can shine a spotlight on those left behind, for example by using COVID-19 to examine the wider issue of universal health coverage, the subject of SDG 3.

It also plays a critical role in holding governments to account for their Agenda 2030 commitments. Though these commitments demand that countries have clear reporting and accountability mechanisms, most nations still have no reliable data on their progress towards specific goals. This matters because countries can only unlock financing for the SDGs by disaggregating data to understand where resources are required. In Africa, where national commitments are rarely backed by adequate investment, this is particularly important.

Rapid mobile penetration in Africa offers unparalleled opportunities for content sharing on digital platforms such as Facebook, Twitter, and YouTube. Though lack of affordable internet connections and poor connectivity remain a challenge, mobile technology is a powerful enabler across many sectors.

One in every six people on Earth lives in Africa; its problems are the world’s problems and solving them is the world’s responsibility. If Africa fails to achieve Agenda 2030, the implications will be felt across the planet through conflict, migration, population growth and climate catastrophe.

The media in Africa is a stakeholder in the achievements of the SDGs. Let us support the media and enlist their help in the quest for economic, environmental, and social justice across the world.

Siddharth Chatterjee is the United Nations Resident Coordinator to Kenya. He has served in various parts of the world with UNFPA, UNICEF, UNDP, UNOPS, UN Peacekeeping and the Red Cross Movement. A decorated Special Forces veteran, he is an alumnus of Princeton University. Follow him on twitter-@sidchat1

The views expressed in this article are the author’s own.​​​​​

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Opinion

Op-Ed: Promoting The Growth Of Women In The Energy Sector

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Ujunwa Ojemeni, Senior Energy & Finance Advisor and Founder, AWEDI Network.

Ujunwa Ojemeni is an impact investing, energy and development expert with experience in the areas of opportunity maturation, financing, and policy.

At the Office of to the Honourable Commissioner for Energy & Mineral Resources Lagos State, she drives policies, investments opportunities and implementation strategies to deliver reliable energy to the citizens of the State. She is also an Advisor with the Private Finance Advisory Network (PFAN) – the multilateral, public-private partnership initiated hosted by United Nations Industrial Development Organisation (UNIDO) and Renewable Energy and Energy Efficiency Partnership (REEEP) focused on bridging the investment gap between investors and entrepreneurs and project developers by facilitating investment into promising clean energy
and climate change projects.

She was previously the Senior Investment Associate at All On, responsible for driving clean energy investments opportunities from origination to closing as well as providing strategic, governance and operational support to All On’s investees.

Before that, Ujunwa coordinated several gas and power development opportunities of up to $300 Million at Axxela Limited (Oando Gas & Power), and earlier at the Management Consulting unit of KPMG, she focused on start-up advisory and business process improvement.
She received her Master’s degree in International Development – Development Finance from the University of Manchester, and has a First-Class Bachelor’s of Science degree in Banking and Finance from the University of Nigeria, Nsukka.

In acknowledgement of her contributions to the energy sector, she was selected as one of the 60 young African Clean Energy Leaders for the Open Power Africa 2019 program by Enel Foundation and was a finalist at the IFC Sustainability Exchange Contest for Youth Innovations 2019. She was also recently awarded the 2019 Young Leaders Award in the Energy and Sustainability category, by the Mandela Washington Fellowship Alumni Association in Nigeria (MWFAAN).

Passionate about social responsibility, volunteering and philanthropy, she founded the SME Transformation Project through which she provides business advisory and funding to womenowned SMEs in low-income communities. She helps them navigate through basic business challenges such as marketing and distributing channels, product line expansion, and most importantly, funding, which they have difficulties accessing from traditional financiers.

Ujunwa also volunteers as a mentor with the Cherie Blaire Foundation, where she provides support to women entrepreneurs and helps them grow as they build their businesses in different parts of the world.

To promote the participation in the energy sector, she founded the African Women in Energy Development Initiative (AWEDI Network) focused on promoting the growth of the women in the sector through mentorship programs, career sponsorship (acceleration), networking opportunities, professional development and leadership training for women at all stages of their energy careers and for female students at the secondary and tertiary levels.

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Finance

Op-Ed: From Cashless To Digital: The Covid-19 Tipping Point

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People’s safety concerns about transmission through contact has resulted in Covid-19 becoming a catalyst for the adoption of cashless payments globally and even more so in South Africa, with the disruption expected to effect lasting changes in the way people transact with cards and cash.  

While consumers had already begun to embrace digital payment options prior to the pandemic, the health crisis is rapidly accelerating the adoption rate with more consumers seeking safer, contact-free payment methods.

This rapid adoption of digital payments will help shape a new normal as businesses begin to emerge from the more stringent levels of lockdown regulations and attempt to navigate their post-Covid-19 futures.

Derek Cikes, Commercial Director at Payflex, says the pandemic represents a watershed for the payments industry.

“The acceleration towards a cashless society is one of the key opportunities that has emerged from the pandemic, bringing the advantages of digital payments  to the fore including lower fees,  convenience, seamless delivery, greater security, and more flexible payment options,” says Cikes who adds that what makes this trend so interesting, is that historically, people used to hoard cash in times of crisis. Now, the opposite is occurring.

A study by MasterCard revealed that since the beginning of Covid-19 in South Africa, 89 percent of South African respondents have been using contactless methods to pay for groceries, 60 percent for pharmaceutical items, 39 percent for other retail items, 15 percent for fast food, and eight percent for transport.

Similarly, recent figures from Bain echo this, with estimates that by 2025, the adoption of digital payments could accelerate by a 5 – 10 percentage point increase globally, above what was previously anticipated at 57% before Covid-19 to 67% after Covid-19.   

Are contactless payments here to stay?

Cash is perceived as a vehicle for the transmission of the virus. As stores, restaurants and other merchants begin to open their doors again, contactless payments are key in providing consumers with a much-needed sense of comfort and reassurance.


“Businesses have no option but to rethink their use of shared payment surfaces, with customers more conscious than ever of what they touch. People don’t want to touch ATM or PIN pads or have to hand their cards to store tellers.  Once viewed as a convenience or nice-to-have, digital payments are now viewed as a critical service, providing a solution to limiting contact with other surfaces,” says Cikes.

Creation of new payment habits

From banking facilities like tap-to-pay, payment apps such as Zapper and Snapscan, to digital banking and e-wallet providers, South African fintech firms have reported significant increases in the use and adoption of digital payment methods since the outbreak began in March. The simple truth is, while these channels provide a convenient way of paying, they are also contactless, allowing consumers to pay for their goods while not having to exchange cash or cards with merchants.

“The perception of cards and cash as vehicles for transferring microorganisms has changed how people physically interact with their payments in favour of contactless options. With health and safety being top priorities, we anticipate this trend to become more permanent with hygiene measures and social distancing likely to become part and parcel of our daily realities for years to come,” says Cikes.

Retailers drive adoption of digital payments

Both online and brick and mortar retailers are helping to accelerate this trend with stores like Mr Price enabling consumers a contactless way to pay in-store pay via their app, and most South African retailers offering tap-to-pay-methods. There is also an expected uptick in omnichannel capabilities (being able to sell your goods through many channels such as website, app, retail, third-party platforms such as Amazon or Shopify) which bridges payments in any environment, physical or digital.

Another contactless payment method driving this trend is e-wallets with over 500 million mobile money users expected on the continent in 2020. In addition, it is anticipated that the capabilities of digital wallets will expand to offer features such as digital IDs and transaction monitoring and reporting, which is expected to create even more growth for this payment mechanism.


Flexibility needed more than ever

According to TransUnion’s Financial Hardship Survey, conducted in the United States, United Kingdom, Canada, India, Hong Kong and South Africa, one in six people lost their job in early May, with defaulting on their bills just seven weeks away. 82% of consumers indicated their household income had been impacted, and on average, consumers who were impacted, expect they will be short by R 7 542.90 when paying bills or loans.

“Many people are financially stretched and need the support of alternative payment solutions to help manage their cash flow without incurring further credit card debt,” says Cikes.

A report by GlobalWebIndex shows that 83% of South African consumers are expecting flexible payment options from brands.

“We have seen this play out in the increased uptake of our Payflex Buy Now Pay Later payment solution, which allows people to make interest-free payments over two paychecks,” says Cikes.

With health, safety and financial security at the forefront of consumer sentiments, companies will need to provide payment options which meet these consumer needs.

“Digital payment solutions provide an avenue which safeguards against physical interaction, enabling both consumers and business to navigate the environment as the economy is restarted.  These digital adoptions will not only help manage the current situation but will also have far-reaching benefits, facilitating a more customer-centric, efficient and resilient economy,” concludes Cikes.

-Derek Cikes, Commercial Director, Payflex

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