African Rural Energy Enterprise Development

19-06-2012
AREED
The AREED (African Rural Energy Enterprise Development) programme provides business development services and capital to energy entrepreneurs in Africa. The purpose is to support the development of clean energy businesses capable of reaching into rural areas, thereby reducing the environmental and health consequences of existing energy use patterns.
Knowledge buildingCommunity participation and inclusivenessPolitical ownership, collaboration and approvalFinancial sustainabilityAchieving co-benefits and balancing trade-offBuilding local capacityTransferableMonitoring and evaluation
1. Silvia Cazzetta 2. Gordon Mackenzie 3. AREED

Per capita energy consumption in sub-Saharan Africa (particularly in rural areas, where over 70% of the people reside) is the lowest in the world. The large majority of the African rural population relies on inefficient energy supply systems: three-fourths of the energy used in domestic settings comes from dwindling supplies of traditional fuels. The situation is critical in terms of environment, health, as well as economic and social wellbeing.

In recent years the potential of small and medium-sized enterprises (SMEs) to expand access to sustainable energy solutions has been recognized. Nevertheless, identifying entrepreneurs with the capacity to turn energy business ideas into successful enterprises remains a challenge. Most prospective entrepreneurs are unfamiliar with modern and more efficient energy technologies. For the most part, these entrepreneurs need targeted assistance to develop clean energy businesses capable of reaching rural customers.

The AREED (African Rural Energy Enterprise Development) programme addresses these fundamental problems by supporting the development of energy companies that use renewable energy technologies, thereby reducing the environmental and health consequences of existing energy use patterns.

The essence of AREED is the provision of business development services (assistance and training) and capital to energy entrepreneurs. This way in countries where governments cannot (for different reasons) expand national grids, private sector energy companies help address the needs of the rural poor.

AREED was launched by the United Nations environment programme (UNEP) in 2000, building upon the pioneering work of E+Co, an international non-profit company specialising in the creation and growth of energy enterprises in developing countries. After the success of AREED I in the promotion of small, sustainable energy ventures in Mali, Ghana, Tanzania, Senegal and Zambia, the programme has entered its second phase, AREED II.

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1. Knowledge building
The AREED programme has actively contributed to increasing international learning on clean energy business development in Africa. One of the fundamental lessons the AREED experience can teach is that when it comes to expanding energy access, the sole combination of enterprise development support and start up financing (i.e. focusing uniquely on the supply side) is often not enough to get entrepreneurs reach into rural markets. During the programme’s initial phase (AREED I) many of the new businesses that were created failed to grow beyond urban and peri-urban settings, because many potential users in rural communities could not afford to pay upfront for the products and services offered by the AREED entrepreneurs. Building upon the knowledge acquired in AREED I, the programme’s second phase AREED II has introduced user-end financing, thereby providing support also on the demand side. Microfinance institutions and local banks are also involved to accelerate the flow of end-user financing to existing and potential customers of clean energy enterprises. Throughout its implementation phases, AREED has benefited from collaboration with universities. A number of studies have been conducted to assess the project’s impact.
2. Community participation and inclusiveness
GENDER ASPECTS: Taking gender aspects into account is a basic requirement for all UN projects. Accordingly, AREED’s original project documents underline the intention to make sure gender balance is achieved as much as possible in both awareness rising meetings and training workshops. What inevitably happened, though, was that at some stage the women’s husbands took over and ultimately replaced them. Due to the impossibility to influence domestic dynamics, these problems are difficult to overcome. COMMUNITY PARTICIPATION: AREED supports entrepreneurial activities on the basis of the quality of ideas and business plans. Therefore there was no room for a community involvement approach in the traditional sense (i.e. setting up community-based management units, organising community-level consultations and the like). Anyhow, as part of the market assessment, entrepreneurs needed to approach the communities in order to understand their needs and mobilise local interest in purchasing sustainable products.
3. Political ownership, collaboration and approval
AREED partners have made considerable efforts to build government awareness of the programme’s impacts, aiming at mainstreaming the AREED approach into national energy, climate mitigation and adaptation planning. In spite of this continuing process of engagement with national policy makers, only in two countries significant contributions have been made to shape innovative policy instruments and regulations supportive of clean energy SMEs: The first example is Mali, where an enterprise-friendly law governing importation of renewable energy equipment has been enacted thanks to the advisory support of the local NGO Mali-Folkecenter (Mali’s main country level partner of AREED). Similarly in Ghana the NGO KITE - Kumasi Institute of Technology and Environment (Ghana’s main country level partner of AREED) has played a key role in fostering a forward-looking partnership between the government and liquefied petroleum gas (LPG) retailers. The two worked together to correct market failures hampering expansion of the LPG market into rural areas. In the other target countries translating the AREED lessons into specific policy measures has been more problematic. Connections with the political and institutional level are still relatively weak and it is not clear how this could be improved.
4. Financial sustainability
In addition to the initial funding from the United Nations Foundation (US$ 4.3 million), AREED has succeeded in raising an additional US$ 4 million from donors, mostly to support the scale-up of capacity building and policy aspects. Furthermore, AREED’s international partner E+Co raised US$ 250 million in additional capital (as at August 2010) to scale up investments worldwide. The programme’s current phase, AREED II, is funded by the Swedish International Development Cooperation Agency, Sida. These figures show AREED’s success in engaging financial support for sustaining its impacts and scaling up successful approaches. The AREED business model generates positive net financial and development returns and has therefore become increasingly attractive to environmental and development-oriented venture funds. The AREED approach has proved to be more sustainable than other financial aid schemes (notably grants) that rarely generate the right expertise to expand project impacts, and often cause money dispersion in a very questionable way.
5. Achieving co-benefits and balancing trade-off
AREED has generated considerable co-benefits from many different perspectives, including environment, health, and most remarkably employment and poverty reduction. Benefits in terms of income generation occur through “multiplier effects”, at three different levels: 1. wealth and job creation deriving from the newly created enterprises themselves (direct employment); 2. productivity increases originating from the use of new equipment, especially in farms; 3. energy savings obtained from the use of the products within households. A good example is the introduction of solar crop drying technology in Zambia, identified as a good means of reducing crop losses and increasing rural farmer incomes. Solar driers significantly reduce the time farmers need for drying procedures before they can transport their products to packaging sites. In a video available on AREED’s website, a group of women from Kabweza in Zambia show the concrete implications of solar crop driers on their work, particularly in terms of increased productivity. As a value-chain analysis reveals, solar crop drying technology and related interventions can increase the average monthly incomes of participating farmers by about 40%. One of the women interviewed in the video explains that the savings she is able to make thanks to this technological improvement are mainly devoted to the education of her children.
6. Building local capacity
Building capacity of national partners in clean business development is one of AREED’s foundational interventions. Indeed the strength of the AREED initiative is rooted in its country partners (which are NGOs based in each of the target countries, promoting sustainable development) for local delivery of capacity building. The key lessons learned are transferable to other African countries. E+Co, AREED’s leading international partner, has in fact drawn on lessons learned from the initial five countries to replicate the approach in new ones in the future. Overall, AREED training programmes attracted many participants. Nonetheless finding the right entrepreneurs turned out to be one of the greatest challenges. The standard criteria used for the selection procedure (education, basic accounting skills, motivation etc.) proved to be inadequate, as very often people with the requested profile have not been successful.
7. Transferable
The macro-economic context of application and the problems addressed by the AREED programme tend to be broadly similar across most sub-Saharan African countries. This is the main reason why the initiative’s replication potential is so high. Another equally important reason is the model’s intrinsic flexibility. The key lessons learned are transferable to other African countries, where they could feed into the design and implementation of solutions tailored to each context.
8. Monitoring and evaluation
In the first stage of the project more attention was given to quantitative (looking at indicators such as number of entrepreneurs trained, number of households served etc.), rather than qualitative aspects. More recently, the focus has been shifted to other elements. These include the ability of the enterprise to reach into the rural market, possibilities to expand the business to neighbouring countries, and also indirect effects such as income generation and CO2 emissions reduction.

Author

Name: 
Silvia Cazzetta

References

AREED website: http://www.areed.org/

Interview with Dr. Lawrence Agbemabiese, former programme officer and co-manager of AREED; conducted on 25 April 2012.

Video: ‘Interview with women of Kafue rural, Zambia about solar dryers’. Available on: http://www.youtube.com/watch?v=vhUWhYtZP2Q&feature=youtu.be

FURTHER READING:

Kolominskas, C. (2003), Non-Financial Returns of Enterprise-Led Development Assistance. A study of energy-related enterprises, The International Institute for Industrial Environmental Economics, Lund University, Sweden.

Kramer, M.; Cooch, S.; Graves, R.; Pfitzer, M. (2005), Investing for Impact: Managing and Measuring Proactive Social Investments, The Shell Foundation.

Napier-Moore, P. (2004), REED Social and Environmental Impacts of ‘Clean Energy’ Enterprise Development.

 

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However, the A.D. eliminates this problem entirely; when you first step into Kobe 6 the Kobe A.D. you might feel like they’re too tight but after the materials break-in the overall fit is pretty Basketball Shoes fantastic. The materials wrap around your foot so nicely that the dynamic Flywire, which is integrated into the lacing system, Kyrie irving shoes feels like a security blanket more than anything; it’s nice to have it there just in case you need to NBA Store further adjust the fit to ensure a seamless experience.Nike is letting us know what kind of fire Buddy Hield, KD 9 last year’s Big 12 Player of the Year, will have on feet tonight. Hield’s Pelicans will square off against the Kobe 4 Mavericks, and after all of the fireworks we saw in the Christmas Day matchups, it should be an exciting game.Buddy Cleveland Cavaliers Jerseys Hield’s Kobe A.D. PE utilizes tasteful speckling and gold accents on a red base. I wonder if he’s using the Kobe 9 cushion set up in the retail version of the Kobe A.D….Let us know what you think of this PE in Curry 3.5 the comments, and if you make a similar NikeiD creation, share it with us using the #WearTesters.Grayson Allen will Kobe AD be tripping over this new Kyrie 3. It’s easy to forget (due to Kyrie’s professional success and overall likability) but James Harden Shoes he was once a Duke Blue Devil. Granted, that status was only for 11 whole games before he suffered an LeBron 12 injury and declared for the NBA Draft, but he was indeed one of Coach K’s guys. He may be left NBA Stars Shoes out of the pantheon of villainous Duke guards ranging from Bobby Hurley, JJ Redick, and the aforementioned Allen, but Kyrie stephen curry shoes still loves to throw his alma mater a bone in the form of Blue Devil-themed signature colorways every now and KD 6 then. The latest is this Home-themed Nike Kyrie 3 Duke slated to arrive February 1st for $120.The Nike Kyrie 3 Golden State Warriors Jerseys Duke features a white base on the unique texture mapped upper while accents of Hyper Cobalt land on the lining Kobe venomenon 5 and unique outsole unit. An iridescent sheen adds a flash of brilliance on the black Swoosh branding for a simple, kobe basketball shoes yet effective homage to Duke fandom. The independent traction pods have been a standout feature of each release, as Nike Nike Zoom Kobe Icon Basketball has colored up the technologic advancement with contrasting elements per each colorway. Here a gradient of different blue shades Kobe 11 gives way to the lone hint of red on the Kyrie 3 Duke. Will you be grabbibg a pair?Continue onward Derrick Rose Shoes for more detailed shots of Kyrie’s latest Blue Devil-themed sneaker below and stay tuned for more updates on Uncle Drew’s Cavalier Steam Shop Nike Basketball model right here on Sneaker News.The Power of 3 pack of Curry 3 Lows has dropped in Curry 3 three colorways: Full Circle, 122, and Dark Horse.The inspiration behind each colorway can be found here and WearTesters own Bryan LeBron 11 Hinkle (Duke4005) says the Curry 3 Low works pretty well on court so far.To pick up your pair for $120 Russell Westbrook Shoes click here (UA.com) or here (Champs).The latest Under Armour Curry 3 has dropped, this time in Artillery Green and Curry Shoes Black with orange accents.On any given night you can watch Steph Curry sink incredible buckets so it’s easy to see Kobe high tops where the “marksman” nickname comes from. Remember when he ended All-Star Weekend with a glorious shot a step past half Curry 2 court? In case you don’t believe me, take a look.The UA Curry 3 ‘Marksman’ is available for $140 at multiple Kobe Bryant Shoes retailers linked below.Are you excited about this colorway or is it an easy pass? Let us know.Cushion: Last year, Curry 3 USA the Kobe 11 used the beloved drop-in midsole technology which gave us the option to customize the cushioning to our kevin durant shoes liking. If you didn’t like the standard heel Zoom and Lunarlon midsole, you could switch it out with a full-length KD Trey 5 Zoom or a full-length Lunarlon setup. This year, Nike provided an encapsulated Lunarlon and heel Zoom setup that is just LeBron soldier 9 not comfortable. The heel Zoom unit is basically nonexistent, even if you do strike or land with your heel, and LeBron 14 the overall firmness of the encapsulated Lunar is almost unbearable during a painful break-in period. Even after the lengthy break-in Kyrie 1 period, the cushion setup is too stiff and doesn’t provide enough court feel to compensate for its overall firmness. On LeBron zoom soldier 9 the medial side, the midsole uses a Phylon foam and this may or may not be the cause for some Curry 1 stabbing in the medial forefoot, which even occurs after you break in the cushion. To sum things up; no impact LeBron Soldier 10 protection, mediocre court feel, and a long break-in period. Yes, it’s as bad as it sounds.

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