Supporting businesses and communities to get through the pandemic
During the COVID-19 crisis, access to clean energy is now more important than ever, particularly in remote and rural communities of Africa where water, sanitation and hygiene infrastructure is limited and health clinics or dispensaries often have no reliable supply of electricity. Having access to electricity is essential not only to help communities prevent, prepare and respond to the pandemic, but also to kick-start economic recovery and build a more resilient future.
Whether it is negotiating loans to see people and businesses through the crisis, or getting solar power to health services, Energy 4 Impact is playing a key role in supporting the frontline response to the crisis.
As COVID-19 gains ground in the world’s poorest regions, evidence shows that it will hit the most vulnerable the hardest in terms of both health and the resulting economic impact. This unprecedented health and economic crisis comes on top of existing poverty and climate crises in these areas.
The businesses we support in Africa face major challenges due to reduced customer expenditures and the lockdowns and restrictions imposed by their governments. Small businesses are being forced to shut; rural livelihoods are threatened; farmers face restrictions on their ability to move around and sell their produce; service providers are confined to home. With no government grants or social safety nets, people have nothing to fall back on.
Many of these businesses – energy companies selling solar home systems and clean cooking solutions, and mini-grid developers – are in the front line, providing goods and services to healthcare facilities and businesses as well as families and individuals in some of the most vulnerable communities. According to our recent survey, their top concerns are financial: paying their staff, servicing loans, and finding working capital to compensate for lost revenues.
Casualties of the pandemic
Alongside these, there are a host of other dependent industries that are grappling with critical shortfalls in cashflow and are also casualties of the pandemic. These include appliance and equipment suppliers and hundreds of small businesses that use power to provide goods and services. In addition to the financial challenges, they are also facing challenges of supply chain disruptions and inability to source raw materials. This affects production, fast depleting their stocks, and inevitably increases operational costs.
Another sector that has been hit hard is agriculture. Agriculture contributes a third of the total GDP in sub-Saharan Africa and employs more than a half of the population. Production, supply chains and distribution have all been disrupted. And in parts of East Africa, where this year severe locust swarms brought widespread damage, the impact of COVID on top of this has been highly damaging for livelihoods and food security.
In this together
However, amid all these worrying trends, we have found many uplifting stories that put a spotlight on the ingenuity and generosity of those with whom we work: for example a mini-grid developer in Sierra Leone is providing power for free to a health clinic and a quarantine station, and a solar business in Tanzania is raising funds to provide people with clean water through solar water pumps. They remind us that we really are all in this together.
Throughout the crisis, it has been vitally important that we continue to provide support to all these companies and businesses and help them navigate through the uncertainty. Their survival has wider implications on employment, income, food security and the resilience of their communities.
Energy 4 Impact and its partners are helping in many practical ways:
- Policy making: we are working with donors to survey businesses and energy industry leaders to see how their needs are being considered in crisis policy making;
- Remote business mentoring: we are intensifying remote business mentoring and helping entrepreneurs to access finance to adapt to the challenging business environment to respond to the pandemic;
- Renegotiating loans: we are renegotiating loan terms with lenders and suppliers to help struggling businesses absorb the shock;
- Electricity for health services: we are working with solar suppliers to fast-track access to electricity for health services;
- Remote support to electricity providers to ensure they remain operational and continue to service their clients;
- Extending social protection schemes: we are working with public institutions and governments to extend social protection schemes to include access to clean energy for the poorest and most vulnerable people;
- Negotiating with selected donors to secure direct grant financial relief for the microenterprises with whom we work;
- Researching ways to improve capital flows into the clean cooking sector, so important to reduce the risks of respiratory illnesses in so many homes in Africa.
So that our work can continue, we are supporting crowdfunding campaigns to raise funds for solar companies and last mile distribution businesses, and have spearheaded a fundraising drive to work with enterprises in rural communities to contribute to rebuilding their local economies.
The coronavirus crisis will keep adding multifaceted pressures to fragile communities. It calls for a comprehensive and collaborative response. Encouragingly, we have seen a number of immediate global initiatives, such as the relief offered by global financial institutions to tackle Africa’s immediate financial hardships.
But, while debt relief and financial support provides short-term quick-fix solutions, any post-COVID-19 economic recovery plan must be based on long-term strategies and investments that accelerate access to reliable clean energy and modern technologies for local populations, businesses and essential medical services.
Across Africa, the pandemic has battered rural economies. They must be restored, but more than that, we must build economies’ resilience to future challenges, whether they are related to health scares, the climate crisis or other pressures. That requires that we not only expand access to modern energy, but that we also maximise the beneficial impacts of that energy.
Energy 4 Impact’s vision is for maximum benefits for societies from universal access to clean, affordable energy. Our vision is just as applicable to a world with COVID-19 as it was before the pandemic arrived.