Pact Global Solar Fund aims to expand access to energy and accelerate economic development in emerging markets by providing low-cost consumer and small business finance solutions for solar home systems and productive use equipment.
Over one billion people currently lack access to energy. For most, mini-grids will be the most economically attractive and technologically appropriate pathway for gaining access to energy, but several barriers must be overcome in order to accelerate mini-grid development. In particular low initial demand for electricity caused by lack of financing for connections, home appliances, and commercial & industrial equipment.
Solar Home Systems (SHS) have the potential to pave the way for mini-grid development and fill gaps where it’s not (currently) economically feasible to extend a grid or build a mini-grid. The key challenge preventing growth within the SHS segment is also finance. Pay-as-you-go (PAYG) and micro-finance are helping, but interest rates and initial deposit requirements are too high.
Low-cost consumer and small business finance offers the best pathway to improving the economics of mini-grid development and growing the SHS market. Building on successful pilots, Pact’s Energy for Prosperity program will create a new social enterprise that will work in partnership with SHS providers and mini-grid developers to provide consumers and small businesses with technical and financial solutions.
The proponent, Pact, has an active pilot in Myanmar, and is targeting expansion in Myanmar and Nigeria. At scale, the proponent aims to capture 20% of the market of 46 million solar home systems projected to be sold by 2030. This equates to 9.2 million homes provided with energy access, and around 45,000 small businesses served.
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Matthew Cullinen, Pact