It is estimated that 85 percent of the 1.2 billion people in the world living without access to electricity reside in rural areas, which is attributable to the marginalization of the poor as well as their long distance from established electrical grids. In order to address this lack of access to electricity and to prevent a growing dependence on fossil fuel, researchers have argued for the use of small-scale renewable energy production. This brief will focus on Sub-Saharan Africa (SSA) as a region in great need of rural electrification since it only has 14.2% rural electrification, which makes it the most energy poor rural area in the world.
By the year 2012, of the USD 41 billion, which is annually needed in the power sector in Africa in order to achieve universal energy access by 2030, the continent invested approximately USD 11.6 billion. This brief will focus on analyzing finance mechanisms that can contribute to fill this substantial gap. It will also concentrate on solar-powered electrification systems that are one of the most common small-scale electrification system types of the region. In fact, solar energy in particular is a great opportunity for pro-poor energy access in Africa because it is naturally ubiquitous, accessible in large quantities, progressively low cost, non-vulnerable to supply or price fluctuation (contrarily to fossil fuel), and compatible with the global consensus to increase low-carbon energy generation.
This brief’s main objective was to inventory innovative and efficient mechanisms for financing rural populations access to sustainable energy -specifically photovoltaic systems (PV)- and to identify critical indicators for evaluating their efficiency. For this purpose, case studies and models of finance mechanisms were analyzed and assessed by weighting their weaknesses and strengths, and assessing their feasibility and adaptability within remote areas in SSA in order to the three best-fitting finance mechanisms determined by our metrics analysis.
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