Covid-19 has proved to be a game-changer for East African businesses. Among the hardest hit is the region’s alternative energy sector. The sector, responsible for providing many remote communities with off-grid energy services, started the year on a high. However, the pandemic, and the recession it motivated, quickly reversed fortunes. FORBES AFRICA examines how the sector is responding, and coping, to some of these shocks.&nbsp;



Over the last decade, East Africa’s off-grid energy companies have been the unsung heroes of the region’s wider energy industry. According to GOGLA, the global association for the off-grid solar energy sector, these businesses have collectively provided at least 470 million people, many of them in remote communities, and cut off from the national grid, with alternative energy access.



The industry, working to reduce energy poverty across East Africa, was arguably on a high at the start of 2020 but the onset of Covid-19, and the reactionary public policies that followed, have worked to reverse a lot of growth that the sector was previously experiencing.



<div class="wp-block-image is-style-default"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://www.forbesafrica.com/wp-content/uploads/2020/10/The-Marinyn-Elgon-village-part-of-the-Finlays-Tea-Estate-in-Kericho-Kenya-is-electrified-thanks-to-a-mini-grid-system-installed-by-PowerGen-in-1024x571.jpg" alt="" class="wp-image-48358" width="637" height="353"/><figcaption>The Marinyn-Elgon village, part of the Finlays Tea Estate in Kericho, Kenya, is electrified thanks to a mini-grid system installed by PowerGen. </figcaption></figure></div>



Looking at the off-grid solar sector, GOGLA’s East Africa representative, Patrick Tonui, says that while the impact of the pandemic has been grave for the industry, Covid-19 remains a universal shock for the region and sector businesses had to react with that in mind.&nbsp;



“Coming into the beginning of this year, this industry was really on a solid growth path and the outlook was looking good. [In] January, we began to hear about Covid-19 and what was happening [especially after] China shut down for the month. We [anticipated] there were going to be impacts on the supply chain and on the manufacturers who were producing these products. As we went into March, when Covid-19 reached Africa, and we saw various government responses to it, one thing was abundantly clear was that we [were] going through a global health crisis and it wasn’t necessarily about us [as an industry],” he says.



Ensuing public health measures to contain the virus including lockdowns, curfews, and travel bans hampered the industry and severely impacted trading for many of these businesses. In fact, according to a survey by EnDev, an international energy access partnership working in a number of developing countries, East Africa’s off-grid energy firms were among the hardest hit, globally, with 35% of these businesses going into hibernation as a direct result of the pandemic. To an extent, says Tonui, this couldn’t be helped.



“We asked ourselves [as GOGLA], we asked our partners, and our members if it would have been responsible for us, as an industry, to go to [our] government and say ‘you are hurting my business by shutting my stores down or by shutting the ability of customers to come to us’. This is a global health crisis and [right now], it&#8217;s a question of how we [as an industry] are going to protect our communities and our workforce.”



While the direct impact of Covid-19 policies have played a major role in declining sales for sector businesses, investment in the industry has also been strained in the fallout.&nbsp;



<div class="wp-block-media-text alignwide is-stacked-on-mobile"><figure class="wp-block-media-text__media"><img loading="lazy" decoding="async" width="1024" height="883" src="https://www.forbesafrica.com/wp-content/uploads/2020/10/GOGLAs-East-Africa-Representative-Patrick-Tonui-image-supplied-scaled-e1602598344349-1024x883.jpg" alt="" class="wp-image-48355" srcset="https://cms.forbesafrica.com/wp-content/uploads/2020/10/GOGLAs-East-Africa-Representative-Patrick-Tonui-image-supplied-scaled-e1602598344349-1024x883.jpg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/GOGLAs-East-Africa-Representative-Patrick-Tonui-image-supplied-scaled-e1602598344349-300x259.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/GOGLAs-East-Africa-Representative-Patrick-Tonui-image-supplied-scaled-e1602598344349-768x662.jpg 768w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/GOGLAs-East-Africa-Representative-Patrick-Tonui-image-supplied-scaled-e1602598344349-1536x1325.jpg 1536w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/GOGLAs-East-Africa-Representative-Patrick-Tonui-image-supplied-scaled-e1602598344349-600x517.jpg 600w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/GOGLAs-East-Africa-Representative-Patrick-Tonui-image-supplied-scaled-e1602598344349.jpg 1707w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure><div class="wp-block-media-text__content">
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“Coming into the beginning of this year, this industry was really on a solid growth path and the outlook was looking good.”<cite>– Patrick Tonui of GOGLA</cite></blockquote>
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This is already apparent on the ground. A number of relief funds have been set up to help East African off-grid energy businesses through this crisis including the Energy Access Relief Fund&nbsp; pioneered by Acumen, the multinational not-for-profit impact investment fund, which provides bridge loans as an avenue for emergency funding to eligible businesses.&nbsp;



The realities of this moment are all too real for entrepreneurs like Aaron Cheng, President of renewable energy firm, PowerGen, operating in five countries across the region including Kenya and Ethiopia.



“In general, Covid-19 has impacted some investors from what we’ve seen. Some investors have completely pulled out or put [a] pause on new investments and that’s really damaged projects in the sector. We’ve certainly been affected by that, we’ve been lucky enough to have some investors step in who have been supportive through this time,” says Cheng.



Nevertheless, Cheng notes that his company has had to minimize all possible costs while waiting on emergency funds to get through the crisis.



“We have done our best to preserve our team and keep that together. In terms of relief funding, we have been in discussion with some of these programs but they have been a lot slower than intended&#8230; and so there hasn’t actually been any final stage notices around any of the funding [that we’re seeking]. For the most part, we have done our best to reduce non-personnel costs to be able to retain our team&#8230; that’s been really important to us to keep the business going,” he says.



Delayed financing has had an impact not only on operations but on new projects as well.



“We’ve actually seen a greater demand for large-scale solar battery solutions and I think that’s because grid reliability has been hit by Covid-19 and, generally, corporate ‘greenness’ is a sentiment that’s increasing around the world and [the pandemic] has helped accelerate that discussion and dialogue [globally] so we’re seeing a lot of commercial-scale interest but projects themselves are taking a while to close because financing has been slow.”



The pandemic is also affecting one of the off-grid sector’s innovative service provisions; mini-grids. Independent from the national grid, these installations provide reliable and consistent off-grid electricity for small-scale electricity generation projects usually for communities or businesses.&nbsp;



According to Aaron Leopold, CEO of the Africa Mini-grid Developers Association (AMDA), an industry association initiated by mini-grid companies across the continent, based in Nairobi, even before Covid-19, the sub-sector faced constraints due to its idiosyncrasies.



“The issue with mini-grids is that energy policy, around public sector support, subsidies and also regulation has traditionally been built around approving and monitoring a very small number of very large projects whereas mini-grids are a huge number of very small projects. The burden, the complexity, and the detail of the regulatory requirements are overly burdensome on these small projects. It will be physically impossible to achieve universal energy access on any reasonable time scale without significant improvement in the regulatory environment,” explains Leopold.&nbsp;



As a result, these shortfalls in policy have restricted the region’s mini-grid sub-sector’s access to investment, posits Leopold.



“[It’s] that very same regulatory environment hampers investment. We have investors saying, ‘What? It takes you one year to get approval to electrify a village of 1,000 people? I’d rather put my money somewhere else’! We are really looking to help governments [through our work] think creatively about keeping their citizens safe, because that’s what regulations are for, and also enabling the progress that they are trying to see in technology and rural service provision.”&nbsp;



<div class="wp-block-media-text alignwide is-stacked-on-mobile"><figure class="wp-block-media-text__media"><img loading="lazy" decoding="async" width="1024" height="1024" src="https://www.forbesafrica.com/wp-content/uploads/2020/10/President-of-renewable-energy-firm-PowerGen-Aaron-Cheng-image-supplied-1024x1024.jpg" alt="" class="wp-image-48356" srcset="https://cms.forbesafrica.com/wp-content/uploads/2020/10/President-of-renewable-energy-firm-PowerGen-Aaron-Cheng-image-supplied-1024x1024.jpg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/President-of-renewable-energy-firm-PowerGen-Aaron-Cheng-image-supplied-300x300.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/President-of-renewable-energy-firm-PowerGen-Aaron-Cheng-image-supplied-150x150.jpg 150w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/President-of-renewable-energy-firm-PowerGen-Aaron-Cheng-image-supplied-768x768.jpg 768w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/President-of-renewable-energy-firm-PowerGen-Aaron-Cheng-image-supplied-1536x1536.jpg 1536w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/President-of-renewable-energy-firm-PowerGen-Aaron-Cheng-image-supplied-2048x2048.jpg 2048w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/President-of-renewable-energy-firm-PowerGen-Aaron-Cheng-image-supplied-80x80.jpg 80w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/President-of-renewable-energy-firm-PowerGen-Aaron-Cheng-image-supplied-600x600.jpg 600w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/President-of-renewable-energy-firm-PowerGen-Aaron-Cheng-image-supplied-100x100.jpg 100w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure><div class="wp-block-media-text__content">
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“Corporate ‘greenness’ is a sentiment that’s increasing around the world and [the pandemic] has helped accelerate that discussion…” <cite>– Aaron Cheng, President, PowerGen</cite></blockquote>
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However, despite the policy blindspots, Leopold does note that there is a crucial part this kind of off-grid technology can play during the present pandemic, particularly for the remote communities the sub-sector serves.&nbsp;



“This year, looking at the Covid-19 situation, mini-grids are the technology that will allow us to electrify thousands of un-electrified health centers across sub-Saharan Africa. There is a huge risk [that] every single city in Africa [may be] overrun because [of the pandemic] with people who need medical care, [who] should have received medical care [within] their rural communities, but there are not adequate facilities. The decentralized nature of mini-grids is going to show its value this year,” he noted at an interview at Future Energy East Africa, in June, considered the largest conference and trade exhibition for the region’s energy sector.&nbsp;



Taking a broader view, Lighting Africa, an initiative of the International Finance Corporation (IFC), has been working on market development for off-grid technologies including solar products and mini-grids in the region for the last 12 years. Program lead, Itotia Njagi, from Kenya, believes that major African alternative energy markets have been severely affected by Covid-19, comparing market performance between 2019 and 2020.



“Across Africa, we’re seeing almost a 30% drop in sales if we compare the first half of this year to the first half of last year. It varies; some [regional] markets have been hit harder than others, but that’s the general pattern we’re seeing. In fact, this is the lowest half year sales we’ve seen since 2014,” he says.



Despite the startling statistics, Njagi is of the mind that government responses have a lot to do with how their corresponding off-grid energy markets fared, particularly in terms of sales volumes.&nbsp;



“Covid-19 has impacted [regional] markets very differently. As an example, the numbers in Kenya were not down so much, maybe at about 15%-20%. Tanzania, much less, because they never really had a lockdown [period]. However, if you look at countries like Uganda that had proper lockdown [measures] then you start seeing those 30% numbers and, I think, with Ethiopia, it’s significantly more than 30%. So, it varies from country to country.”



As in the mini-grid sub-sector, the wider industry has been hindered by reactionary policy measures, across the region, during the pandemic and beyond.



<div class="wp-block-image is-style-default"><figure class="aligncenter size-large"><img loading="lazy" decoding="async" width="1024" height="694" src="https://www.forbesafrica.com/wp-content/uploads/2020/10/A-street-vendor-uses-a-PayGo-solar-lighting-system-for-his-stall-image-by-Baobab-1024x694.jpg" alt="" class="wp-image-48354" srcset="https://cms.forbesafrica.com/wp-content/uploads/2020/10/A-street-vendor-uses-a-PayGo-solar-lighting-system-for-his-stall-image-by-Baobab-1024x694.jpg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/A-street-vendor-uses-a-PayGo-solar-lighting-system-for-his-stall-image-by-Baobab-300x203.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/A-street-vendor-uses-a-PayGo-solar-lighting-system-for-his-stall-image-by-Baobab-768x521.jpg 768w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/A-street-vendor-uses-a-PayGo-solar-lighting-system-for-his-stall-image-by-Baobab-1536x1041.jpg 1536w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/A-street-vendor-uses-a-PayGo-solar-lighting-system-for-his-stall-image-by-Baobab-2048x1389.jpg 2048w, https://cms.forbesafrica.com/wp-content/uploads/2020/10/A-street-vendor-uses-a-PayGo-solar-lighting-system-for-his-stall-image-by-Baobab-600x407.jpg 600w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>A street vendor uses a PayGo solar lighting system for his stall</figcaption></figure></div>



“Two things have happened in the last six months from the policy-side that have affected the industry. One is that VAT was re-introduced on solar products. On top of that, [excise] duty was introduced. I can relate with the fact that governments have been affected and they are trying to shore up whatever revenues they can and so some of the exemptions that were provided in [the past], they are [currently] revisiting Duty as a common target within East Africa and [at the same time] VAT is being applied. Basically, these products are now more expensive, at a time when disposable incomes are shrinking. We expect that this will have an impact on sales for the second half of 2020 and so that recovery process [for sector businesses] will take much longer,” he explains.



While tidings for the East African energy sector may seem bleak, for now, there is a silver lining for entrepreneurs in the sector. Turning back to Cheng of PowerGen, despite present difficulties, he believes the outlook remains positive for businesses like his, across the region.



“There still remains about 600 million people without power, and that hasn’t changed. Through Covid-19, and the slump of 2020, there still isn’t a much cheaper grid extension model and there hasn’t been a radical improvement in energy access. You still have high diesel costs and high grid unreliability and that’s actually driven commercial clients to alternative energy solutions. Now, it’s just a matter of continuing to execute and using good economics in these projects and ultimately using the end of 2020 or 2021, if Covid-19 ever slows down, to rebuild investor confidence and get back to the levels we were at in 2019 but we do believe we can get there because the fundamentals remain in the market.”&nbsp;



-By Marie Shabaya

A rural classroom uses a solar powered light, a key product of East Africa’s off-grid energy sector; image by FINCA International [A. Wright]

Powering Through The Pandemic: East Africa’s Energy Sector

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 &amp; 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) &#8211; 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 &amp; 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 &#8211; 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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Op-Ed: Promoting The Growth Of Women In The Energy Sector

Inspiring
women to lead in the energy sector and industry at large to improve the
imbalance of representation, is an ambition to be realised by all, according to
Mariam Kane-Garcia, the newly appointed CEO and Managing Director of Total
South Africa. 



She wants
to encourage and inspire people to push the boundaries of possibility,
regardless of the minority groups they belong to; while at the same time emphasising
the importance of not doing so at the expense or the credibility of minority
groups, specifically women in leadership. 



She
lives with the conviction that a diverse workforce and management team drives
the competitiveness of the business, the ability to innovate, the ability to
attract opportunities and their social license to operate. 



“At
Total, we enable all our employees to develop their professional skills and
advance in their career without discrimination of any kind.” 



However,
the presence of women leadership in the energy sector is still insufficient,
despite progress. The ‘Global Energy Talent Index Report 2020’, found that
women make up only 8% of the workforce in the global oil &amp; gas sector, 9%
in each of the petrochemical and power sectors, 12% in the nuclear sector, and
15% in the renewables sector.



Furthermore,
says the report, only 17% of women (of an already small pool) are placed on
leadership training programmes, compared to 22% of men. And the fact that women
have shown preference to training, learning and development suggests that
they’re still coming up against a glass ceiling and are eager for opportunities
to smash through it.



Mariam
emphasises that there is an opportunity for all in tackling the imbalance and
being catalysts for change instead of casualties for change. Diversity is a key
performance lever for success and both men and women have a critical role to
play in realising much change to rebalance industries. The task is not to
shoulder the typical roles assigned in industry, but for women and men to
interlink as the connective fibre that will materialise the successful growth
of industries in a notable way, as well as the economy. 



The
reasons for women’s underrepresentation in the sector are complex. There are
historical factors. Even today, research suggest that young girls are not
encouraged to eye careers in what is considered a technical, or masculine
industry. 



With
that in mind, it’s critical that women pursue and embrace the opportunities
that come their way, says Mariam Kane-Garcia, who is the first woman to hold
the senior position at Total South Africa. “Total offered me a managed career
path and I seized these opportunities successfully,” she says.



This
reciprocal relationship with Total has kept Kane-Garcia with the company for
nearly 20 years. She grew up in West Africa – Mauritania and Côte d&#8217;Ivoire –
and attended the ESCP Business School in Paris. She joined Total shortly after
finishing at the ESCP in 2001, and has held a series of positions in finance,
strategy, and business development at group offices in France, the UK,
Singapore and Vietnam. In 2019, she moved to South Africa as Executive Vice President
for marketing and services Southern Africa, and as CEO and Managing Director of
Total South Africa.



As a
vocal champion for diversity and inclusivity, she feels strongly that women
should be represented, not as a minority, but because they are deserving. This
will ensure that the wrong message is not sent and that it does not dilute the
impact of their performance in achieving their status. 



Not
only do women have to be placed in more leadership positions, but they also
need more exposure to technical roles, starting with education and vocational
training. 



Total
South Africa is committed to long term partnerships within the communities in
which it operates and has partnered with the Department of Agriculture,
Forestry and Fisheries Female Entrepreneurship Awards since 2003. Total South
Africa also supports other talent linked initiatives like Buskaid and Afrika
Tikkun, to create shared value and ensure the development of women at
grassroots.



In
2006, the company created its own Total Women Initiative for Communication and
Exchange (TWICE) Network as a platform to help women find their way and fulfil
their potential in the company, and Kane-Garcia herself set up the Twice Network
for Total UK’s upstream operations. 



When
it comes to gender equality, both women and men have to contribute.



We
stand to benefit from women and men’s unique contributions to truly propel the
energy sector forward. We need to create solutions with a business model as to
not simply place a band-aid on issues but rather create sustainable solutions
with a long-term commitment to solve and defy barriers. 



She concludes that, “If we are more inclusive, we are more connected; and if we are more diverse, we are more creative in solving the challenges we face.”



Content provided by Total

Tag: Energy Sector

FORBES AFRICA SOCIAL MEDIA

Powering Through The Pandemic: East Africa’s Energy Sector

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

Here’s how Mariam Kane-Garcia is leading the way at Total South Africa