World Bank: Increased investments required to expand off-grid solar potential
A significant increase in public and private investment is required if off-grid solar is to fulfill its potential and enable the achievement of SDG 7; universal access to electricity for households by 2030 while scaling up access for businesses and public institutions. That's according to the World Bank while noting fiscal incentives are needed to drive product affordability. Fanny Missfeldt-Ringius, Practice Manager, Energy Sector Management Assistance Program, World Bank joins CNBC Africa for more.
Tue, 08 Oct 2024 13:11:58 GMT
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AI Generated Summary
- The World Bank emphasizes the need for increased public and private investment in off-grid solar to achieve universal electricity access and meet SDG 7 by 2030.
- Climate finance and carbon credits offer new growth opportunities for the off-grid solar sector, but challenges like a viability gap persist in providing electricity access to underserved communities in Africa.
- Governments are encouraged to introduce fiscal incentives to drive affordability and support local manufacturing in the off-grid solar sector, while strategies like guarantees and blended finance instruments can further boost investment in electrification efforts.
A significant increase in public and private investment is crucial for off-grid solar to reach its full potential and help achieve Sustainable Development Goal 7, which aims for universal access to electricity for households by 2030 while also expanding access for businesses and public institutions. The World Bank emphasizes the need for fiscal incentives to drive product affordability and highlights the importance of patient capital to support long-term strategies for off-grid solar companies. Fanny Missfeldt-Ringius, Practice Manager of the Energy Sector Management Assistance Program at the World Bank, recently shared insights on the current state of the off-grid solar market and the steps needed to accelerate progress in this sector. The World Bank, alongside the African Development Bank, is working on the M300 program to electrify 300 million people, with a focus on providing financing for 250 million of them. By leveraging climate finance and carbon credits, the off-grid solar sector can tap into new opportunities for growth. However, there are still challenges to address, including a viability gap that limits access to electricity for about 80% of those in off-grid areas in Africa. Governments are encouraged to introduce fiscal incentives to drive affordability and spur local manufacturing in the off-grid solar sector. By crowding in private financing and prioritizing least-cost solutions such as off-grid solar, the public sector can play a significant role in scaling up electrification efforts. Strategies like guarantees and blended finance instruments can further boost investment in off-grid solar solutions. End-user subsidies and financial innovations like pay-as-you-go systems can help bridge the affordability gap for underserved communities. Moving forward, strengthening climate resilience and integrating off-grid solar solutions into broader energy transition plans will be essential for achieving sustainable electrification goals in Africa and beyond.
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