Clean Energy Group has been advocating for new innovation strategies to accelerate clean energy technologies and markets for many years now (see “Moving Climate Innovation into the 21st Century: Emerging Lessons from other Sectors and Options for a New Climate Innovation Initiative“). We’re happy to report that one program, Lighting Africa, a joint International Finance Corporation-World Bank initiative, is demonstrating the successful application of these new innovation systems approaches to one of the most persistent energy access issues in the developing world: off-grid lighting. (See Lighting Africa case study in Clean Energy Group’s “Accelerating Climate Technologies” report for more information.)
Lighting Africa (LA) started with the simple goal: to catalyze the market for clean off-grid lighting, without providing subsidies for the technologies. Subsidies have a history of running out at crucial moments—and have in many cases actually undermined markets for new technologies. Instead, the LA team aimed to use public dollars strategically to incentivize private-sector innovation—to develop products that people wanted and could afford to buy without public support.
To do this, LA took a systems-analysis approach and identified a series of market gaps for off-grid lighting products that the private sector was unable to overcome:
- Lack of market information and consumer knowledge of products
- Low quality products spoiling the market
- Lack of low-cost consumer and business finance
- Policy and regulatory constraints
The team then created a series of targeted interventions to overcome these barriers. LA provides detailed market analysis to private lighting companies, product testing and certification, access to finance for consumers through local banks, and an online virtual network to link manufacturers and distributors. Lighting Africa acts as “bridge” or “matchmaker” for entrepreneurs and local and international businesses along the supply chain.
Early results are impressive. In the past 18 months, LA has spent less than US$9 million on its off-the-grid efforts, which have already brought better light to 950,000 people. Eight products have so far passed LA quality tests and are available in the African market, retailing between US$22 and US$97. Two hundred and fifty (250) retailers are now selling these quality approved products—up from 30 in less than a year.
With this rapid progress, reaching Lighting Africa’s initial goal of providing 2.5 million people with access to cleaner lighting by December 2012 is on track.
After the program’s early success piloting its approach in Kenya and Ghana, LA has expanded to eight additional countries in Sub-Saharan Africa and India. LA’s quality assurance approach is already being implemented internationally.
Lighting Africa is now spinning out some of its work to a newly formed independent organization: the Global Off-Grid Lighting Stakeholder’s Association. The Association represents a unified industry voice dedicated to the development of clean off-grid lighting solutions. The association will support the expansion of off-grid lighting markets in developing countries outside of Africa. The association is an important first step in moving the Lighting Africa program towards a self-sustaining operation, and provides an “exit strategy” for the World Bank Group, which has served to jump-start the off-grid lighting industry.
The Lighting Africa example demonstrates that individual firms cannot and should not “go it alone” to commercialize climate technologies in developing countries. The program underscores the need for an international public partnership to serve as a neutral broker to identify and fill gaps across the value chain, share international knowledge, enable relationship building, and respond to evolving market needs—actions that individual countries and private-sector developers cannot do on their own.
The model should be replicated for other clean energy technologies.