Servitization model offering sustainable utility services to residents of affordable housing developments through a fund which owns and operates the equipment. The fund partners with affordable housing landlords providing offtake guarantees to derisk the vehicle.

Renewable projects in South Africa have struggled to scale beyond rural areas as viability depends on subsidies, and end-user energy demand is weak. With little sector development support to fund catalytic clean energy projects or provide capital to start-ups innovating clean energy financing, and in particular those targeting urban poor households, landlords have focused on incremental energy efficient improvements that merely minimize utility consumption.

Clean Utilities for Affordable Housing’s model uses a blended finance structure to widen the capital stack, this helps de-risk projects, deliver affordable clean utility services, and incentivizes tenant energy conservation through demand response strategies. By unlocking capital, government incentives and providing utility expertise, the innovative partnership model increases the landlord’s appetite for clean utitlity projects. This approach offers significant scale and replication potential for clean energy solutions and technologies, by reaching multiple low-to-middle income households.

A pilot has been packaged for the implementation of a 4.2MW solar mini-grid in partnership with a large affordable housing landlord  in Johannesburg, delivering clean energy to over 700 households. At its target scale of USD35m, the fund is expected to deliver over 12 MW of solar energy, avoiding over 15,000 tons of C02 emissions. Over 6,000 affordable housing residents could benefit from more secure and affordable energy.