Best Practices In Decentralised Renewable Energy Access: Sharing Knowledge for Renewable Energy Enterprise Development

June 15, 2014

Elmar ElblingEnergy SpecialistAsian Development Bank

Energy For All: Maximizing Access to Energy for the Poor

Energy for All was launched in 2008

2-Pronged Strategy

Internal Objective: Increase ADB’s investment on energy access projects and enterprises to scale up access to affordable, modern, and clean energy among the regions poor using renewable energy technologies

External Objective: Develop strategic partnerships and alliances with other stakeholders

Energy for All: Impact of ADB’s Investment in Energy Access2008-2013 (Cumulative)

0.00

1.00

2.00

3.00

4.00

5.00

6.00

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

2008 2009 2010 2011 2012 2013

Imp

rove

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acce

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(ho

use

ho

lds)

En

erg

y A

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s In

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$)

YearEnergy access investment Number of households

• Investment in energy access 2013: $984 million in 2013. • New connections to electricity for 1.7 million households• Improved electricity service to about 500,000 households• The switchover of 90,0000 households currently burning traditional

biomass to improved cookstoves

Energy for All:Energy for All Partnership

• ADB-led partnership to address energy poverty at the regional scale, established in 2009

• Private sector participation is essential to achieve universal energy access by 2030 - the Partnership aims to identify, replicate and scale-up best business models for energy access

• Set a target to provide 100 million new people with access to energy by 2015

• The combined work of the partnership has provided 78 million people with access to electricity or modern fuels as of 2013

Knowledge Sharing

Capacity Building

Project Development

Investment Facilitation

Implementation Approach

ENERGY FOR ALL

Project Development•Identify credible projects together with in-country partners to ensure workable models•Technology Transfer•Piloting of demonstration projects to prove sustainability and commercial viability

Investment Facilitation•Partnerships with investors and financial institutions •Referral of energy access enterprises in the investment portfolio of ADB’s ODs•Supports Investor Forums as a tool for presentation of energy access companies to potential investors

Energy for All: Project Development FacilityIncubates business models from start-up to sustainability, helping to refine start-ups to become bankable investment opportunities. Main activities are:

The Energy for All Investor Forum is avenue wherein the energy accessenterprises supported by the Energy forAll Program are showcased to anaudience of investors, financialinstitutions and other energy accessstakeholders.Objective: facilitate investment for the most

mature and bankable energy accessenterprises in the Energy for AllPipeline,

share industry best practices, businessmodels and institutionalarrangements, and create anopportunity for networking andpartnership building.

PDF in ACTIONEnergy for All Investor Forum

The Energy for All Investor Forum is an annual event held during the Asia Clean Energy Forum every June.

PDF Results

PROJECT DEVELOPMENT FACILITY

SE

MI-

FIN

AL

IST

FIN

AL

IST

Register as a

Partner

Business Model

Mentor Matching

Business Model

Financial Model

Assumption Testing

Pitch Deck

Investment Structuring

Third Party Validation

SUPPORTED DEALS CLOSED

34

Business

Model WS

Customized

Mentoring

Investment

Facilitation

07

06

02

02

04

07

02

01

25

25

First Stage• Sourced and identified 66

qualified business models from its partners

Second Stage• Supported 34 of these

through business model mentoring

Finalized•Helped close 4 deals for

new financing

More models still in the process

Energy for All Projects:Pay as you go Solar, India

•Simpa Networks: energy access enterprise operating in India•Utilizes an innovative, pay-as-you-go business model

using SMS credits to purchase solar home systemsSimpa Networks was featured in the Energy for All

Investor Forum 2012.Through references given by the Energy for All Team,

Simpa Networks was approved by ADB’s PSOD for an equity investment.•Energy for All worked with ADB’s Private Sector

Operations Division to perform due diligence and project design•Result: Equity investment of $2 million•$2 million is relatively small scale for ADB but project

promises high impact and high replication potential•Simpa will now be able to reach an additional 63,000

households

Project Development FacilityLessons Learned

Activities have been key for building up new partnerships and collaboration with social enterprises and social investor networks •New Ventures India• Impact Investment Exchange (IIX) •Climate Technology Initiative Private Finance Advisory Network (CTI-PFAN)

Support and mentoring creates sustainable, bankable projects for ADB•Simpa Networks was assisted by New Ventures and PDF, and in turn, attracted

ADB private equity investment

Helping projects mature alleviates risks for other investors, in order of decreasing risk:• Impact first investors •Private wealth funds•Series A investors,•Private equity•Commercial banks

Key Challenges to be Addressed

Financing• Sustainable Energy for All Initiative estimates $50 billion a year

of investments in electricity expansion and modern fuels will be needed to attain universal energy access by 2030.

Policy and Framework• Government capacity to support newer innovations and off-grid

solutions is low. Creation of Sustainable Business Models for Energy Access• Private sector/ energy access entrepreneurs need to be tapped.• Poor communities have high willingness to pay – but their ability

to pay needs careful management.

Thank you!

For more information:

Elmar ElblingEnergy Specialist +632 632 1415eelbling@adb.orghttp://beta.adb.org/sectors/energy/programs/energy-for-all-initiativehttp://www.energyforall.info

Potential Solutions

Leveraging finance and involvement of private sector•The floodgates to private sector investment need to be opened•Energy for All partners with multilaterals, private sector and project implementers and supports innovative financing solutions

Limited capacity of developing countries must be addressed•Capacity building for sustainable development•Policy remains main driver for change•Energy for All supports workshops, training, and knowledge eventsMentoring and Project Development•Replicate and scale-up proven business models through project development•Energy for All, with the help of its regional partners, is in a good position to identify and scale-up the best models•Project Development Facility focuses on this