Lighting Global: How African govts should respond to the huge demand for energy access

The Global Association for the Off-grid Solar Energy Industry, the World Bank Group’s Lighting Global program, in partnership with Kenya’s Ministry of Energy are currently hosting a three-day international conference of the off-grid sector in Africa. The conference serves as a platform for key stakeholders within the off-grid solar sector, including manufacturers, distributors, governments, policymakers, development institutions, and distributors, to come together and address the pressing issue of increasing energy access for the millions of people across the continent who lack grid connectivity. One of the key themes of the conference is to reflect on long-term trends, challenges, and opportunities in the off-grid solar sector, and to strategize on moving forward to achieve universal electrification goals. Itotia Njagi of Lighting Global recently spoke with CNBC Africa to provide insights into the current state of off-grid solar adoption in Africa and shed light on the key challenges and opportunities facing the sector. ### Key Theme: The key theme of the interview revolves around the progress made in off-grid solar adoption in Africa over the past decade, the challenges hindering the sector's growth, and the potential pathways to achieving universal energy access by 2030. ### Key Points: 1. **Remarkable Progress in Off-Grid Solar Adoption**: Njagi highlighted the significant strides that Africa has made in off-grid solar adoption, with a growth rate of around 10 percent and a revenue increase of approximately 30 percent year-on-year. Today, the penetration of solar energy in Africa stands at about 70 percent, a substantial improvement from just 2 percent a decade ago. 2. **Challenges in Policy and Quality Standards**: The interview also brought to light some of the key challenges facing the off-grid solar sector, including uneven policies across African regions related to duties and VAT, and the need for better enforcement of quality standards. In some West African countries, the presence of duties and VAT on solar products leads to a price increase of up to 30%. Moreover, the lack of stringent enforcement of quality standards results in inferior products competing unfairly with quality-verified products. 3. **Local Financing and Accountability**: Another critical challenge highlighted by Njagi is the limited involvement of local banks in providing debt financing to off-grid solar companies. Currently, local banks contribute only about 20 to 25% of the financing, leading to a reliance on hard currency financing. The industry advocates for increased participation of local banks to provide lending in local currency, offering a more stable financial environment. ### Quote: Njagi emphasized the importance of accurate picture painting and concrete steps to achieve the ambitious goal of universal energy access by 2030, stating, '...our objective now is to be able to paint a really accurate picture of what are the concrete steps that need to be undertaken to be able to meet those goals.' With day one of the forum setting the stage for discussions on key challenges and opportunities in the off-grid solar sector, stakeholders are tasked with collaborating to address policy discrepancies, enhance quality standards, and mobilize local financing to accelerate progress towards universal energy access in Africa.