GVEP International - Annual Review 2011-2012

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2011-12

AnnualReview

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Table of contents

CEOs message 01

Our mission and vision 03

Introduction 04

Achieving energy access for all 06

Health 08Agriculture and food production 12

Small businesses 17

Households 20

Education 26

Our programmes 28The next five years 30

Governance 31

Financial statements 32


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Annual review 2011-12 GVEP International02 www.gvepinternational.org

We are a lead member of the consortium selected

by the World Bank to set up and run the Kenya

Climate Innovation Centre in Nairobi, a $10 million

initiative to provide business incubation servicesand early stage capital to young businesses in the

renewable energy and climate adaptation space.

We have just reached agreement with Sida, the

Swedish International Development Cooperation

Agency, to manage an $7 million facility and

programme to improve capital access in the

renewable energy markets, across four countries

in East Africa. This will include a Technical

Assistance Facility, providing advice to businesses

seeking capital, a significant extension to our LoanGuarantee Activities, and a number of sector-

focused enterprise development projects, all to be

undertaken over the next three years.

We are currently fundraising for our50

million energy access impact investment fund,

Prometheus. The fund offering demonstrates our

deal flow origination and technical assistance

capabilities. The funds active pipeline consists of

over 40 opportunities and $400 million of capital

requirements, and includes project developers

and product manufacturers/distributors covering

hydro, wind, solar, biomass, biogas and biofuels

technologies. GVEP has also identified a future

pipeline of 70 additional opportunities with capital

requirements in excess of $1 billion which may be

investible at a later date, and will continue to augment

this pipeline throughout the life of the fund.

We have been engaged by Alliance for a Green

Revolution in Africa (AGRA), to provide technical

assistance to East Africa-based applicants to REACT,

their renewable energy grant/soft loan programme.

Outside Africa, we are managing a challenge

competition, which has just announced awards

totalling nearly 1 million to eight renewable energy

project/business ideas in the Caribbean.

We have established an exciting new relationship with

the OPEC Fund for International Development (OFID).

Our first joint project is a micro-hydro development inRwanda.

Our plans for the future are guided by the opportunities

we see, and because increased energy access is

desirable not as an end in itself, but because of the

benefits it delivers to society, we have structured most

of this review around five application areas: health,

agriculture, small businesses, households and education.

For each area, we outline the context for the need

for increased energy access, then describe how the

work we do is helping in that area, and finally presentwhat else we would like to do in the future. An exciting

feature of our mission, to increase access to clean and

affordable energy, is the amount of innovation we see,

in terms of technologies, business models, investment

strategies and public policy approaches. Our activities

keep us at the forefront of these innovations, and this

remains a priority for us going forward.

GVEP evolved from an initial partnership between the

World Bank, UNDP and three bi-lateral donors to an

independent NGO five years ago. On my arrival, just

over a year ago, I could see the enormous progress that

had been made in that time. GVEP has now established

clear strategic goals to take us through the next phase of

our growth. This growth is only possible because of the

solid foundations created by the efforts of many people:

trustees, staff, partners, sponsors and the entrepreneurs

we work with the GVEP team. To them I must express

my sincere appreciation, admiration and gratitude, and

I look forward to our continued partnership to increase

access to clean and affordable energy for all.

Ben Good, CEO

GVEPs mission to increaseaccess to clean andaffordable energy hasthe principal benefit of

improving human welfarewhile simultaneouslyaddressing challenges foremployment, income,economic growth and theenvironment. This year,the work we do is moreimportant than ever, not in

spite of the great twin globalchallenges of economic andenvironmental uncertainty,but because of them.Matthew Mendis, Chair of GVEPBoard of Trustees


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GVEP International Annual review 2011-12 03www.gvepinternational.org

GVEP reduces poverty by increasing access

to affordable modern energy services in

developing countries, where state or large

utilities interventions are slow to reach. We

help establish and grow micro, small and

medium size energy enterprises so that

they can deliver sustainable access to clean

energy, and in turn improve quality of life for

people in developing countries.

Why businesses? GVEPs experience to date has shown

that sustainable businesses last longer than the effects

of direct donations, so supporting energy businesses

should achieve more energy access per dollar of aid.

In the last five years, our work has helped improve the

lives of almost two million people across Africa, Latin

America and the Caribbean.

Our missionand vision

NuruEnergyEastAfricaLtd

Caterers from Zigu English

Medium School in Mahina,

Tanzania. Thanks to

improved cookstoves, theycan prepare breakfast,

lunch and dinner more

efficiently for 400 students.A solar lantern brightens

life for a Rwandan girl.

Ken Aldonza, an

entrepreneur from St Lucia,

and one of 26 winners of

our 2009 IDEAS Energy

Innovation Contest.

.


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In the developed world, we rely on

energy, without a second thought as

to how it enriches our lives: openingthe fridge to make breakfast, taking

the train to our heated places of work,

leaving a night light on for our children.

Energy is essential to meeting our basic

human needs: food, water, heat, light

and transport. Poor access to energy

impacts on quality of life, educational

chances, economic production and

healthcare provision. Its a huge

barrier to achieving the UN Millennium

Development Goals.

For many in the developing world thats

what energy access is: a goal. About

80% of Sub-Saharan Africans dont

have easy access to modern forms of

energy. To cook their food, heat their

homes, educate their children and

earn a living, they rely on unhealthy,

expensive and unsustainable options.

Collecting wood to provide a cooked

meal for your family is hard work;

buying charcoal for the same purpose

is expensive and literally worlds away

from flicking a switch on a stove in the

developed world. This limited access to

energy consigns many to live in poverty

and exposes them to signficant health

impacts.

The International Energy Agency

(IEA)s 2011 World Energy Outlook

estimates that 1.3 billion people are

without access to energy and a further

2.7 billion are without clean cooking

facilities. The vast majority of these live

in rural areas of Sub-Saharan Africa

and developing Asia, with little access

to grid electricity and little prospect

of achieving or affording it soon.

Consequently, these communities rely

on unsustainable, and increasingly

Introduction

There are one and a half billion peopleacross our world who lack any means ofaccessing energy. We can make it possiblefor them to get new forms of energy innew ways, freeing them from dependence ongovernments and on monopolies.Andrew Mitchell, UK Secretary of State forInternational Development, November 2010

Facts & fi guresScale of the issueIf we continue with current practices

and population growth rates, the IEA

estimates that:

100 million more people will lackaccess to electricity by 2030 in Sub-

Saharan Africa.

200 million more people will cook

on traditional fuels, with increases in

both Africa and South Asia.

Overall by 2030 in developing countries:

900 million people will not have

access to electricity.

3 billion people will still cook withtraditional fuels.

Energy access1.3 billionwithout accessto electricity

1 billionwith poor quality

energy access

2.7 billioncooking with traditionalbiomass, resulting in 1.4 millionpremature deaths each year

More than 95%of these peopleare in Sub-Saharan Africa or

developing Asia with 84% living in

rural areas

Data from International Energy Agency


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expensive fuels, such as wood,

charcoal and kerosene, to fuel

inefficient stoves and lamps.

In this context, new markets for

alternative energy sources and

efficient appliances are emerging.

The private sector can play an

important role, supplying cleaner,

sustainable energy products and

services, such as solar lanterns and

efficient cookstoves, and developing

community-scale renewable energy

projects.

Often, however, growing these energy

businesses is a challenge. That is true

in any economy, but is especially so

in the developing world. So helping

these businesses overcome this

challenge can make a significant

difference, and that is where GVEP

comes in.

To meet the UN Millennium Development Goal of eradicating

extreme poverty by 2015, another395 million people need access

to electricity and an additional

1 billion need clean cooking facilities.

We need a globalclean energy revolution

a revolution that makesenergy available andaffordable to allThis is essential forminimising climate risks,for reducing povertyand improving globalhealth, for empoweringwomen and meeting theMillennium DevelopmentGoals, for globaleconomic growth, peaceand security, and thehealth of the planet.Ban Ki-moon, United NationsSecretary General, January 2011

Two entrepreneurs making

briquettes to provide

cleaner, safer energy to

their customers.

To ensure access to energy is universal by 2030:

Approximately 150 million more people per year must

get access to clean cooking facilities.

Approximately 75 million people per year must get

access to electricity.

And $700 billion needs to be invested.

The Challenge


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Our approach focuses on

helping small and medium-sized enterprises access

what we call the enabling resources

necessary to achieve growth. There are

four of these:

Technology technical training andadvice, assistance with sourcing and

production, innovation competitions.

Skills training and mentoringin business planning, sales and

marketing, and record keeping.

Capital advising entrepreneurs onaccessing finance, training financial

institutions on renewable energy, and

increasing the supply of capital through

small grants, loan guarantees and our

proposed impact investment fund.

Delivery network help withfinding alternative suppliers, buyers,

distributors and markets, collaborate

with entrepreneurs with purchasing and

sales opportunities.

In our experience, focusing on a

market-led approach like this yields

better results than a philanthropic

one. It can also have a wider impact

on poverty alleviation. Supported

businesses play important roles in their

communities, providing employment,

developing services and infrastructure,

and promoting socio-economic

development.

For decades, development agencies

and governments have been workingto improve access to energy.

Almost all mainstream electrification

interventions are focused on large

scale infrastructure projects. However,

the more remote a region, the lesser

the chance of benefiting from the grid

because of high delivery costs and/or

slow rates of progress. Small stand-

alone renewable technologies are

better able to meet rural communities

needs, and these can be provided

with shorter lead-times by small and

medium enterprises.

Programmes promoting widespread

micro and small energy enterprises in

Africa offer solutions to rural energy

Accessing financeLack of capital for both energyentrepreneurs and consumers restricts

the widespread use of modern

energy. When prospective borrowers

and lenders talk, the borrower (the

entrepreneur) doesnt know whats

expected of him and the lender (the

financial institution) doesnt understand

renewable energy resulting in

limited borrowing opportunities for

entrepreneurs.

This is a problem that GVEP can help

solve. We link entrepreneurs with local

microfinance institutions (MFIs), as well

as training MFI staff about renewable

energy and entrepreneurs on how to

approach banks. In some cases, we

offer loan guarantees to get the ball

rolling.

2012: the InternationalYear of SustainableEnergy for AllThe UN Secretary General Ban Ki-moon

has recently reinforced the message that

making energy available and affordable

to all is essential for minimising

climate risks, for reducing poverty and

improving global health, for empowering

women and meeting the Millennium

Development Goals, for global economic

growth, peace and security, and thehealth of the planet.

The UN has also designated 2012 as the

International Year of Sustainable Energy

for All. This high-profile initiative sets out

three objectives to be achieved by 2030:

Ensuring universal access to modern

energy services.

Doubling the global rate of

improvement in energy efficiency.

Doubling the share of renewable

energy in the global energy mix.

Achieving energy access

Business playsa key role in creatingnew opportunities forpoor people to help liftthem out of poverty. Forinstance, the advent ofthe mobile phone hascreated many smallbusiness activities, such

as phone charging,money transfer servicesand provision ofinformation on commodityprices, which haveenabled thousands ofpeople to earn a betterlivelihood and come out

of poverty.James Wakaba, GVEPS AfricaRegional Manager



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access and poverty. Over the last five

years, GVEP programmes like thesehave helped approximately 800 micro

and small businesses in East Africa to

provide modern energy access and

products to almost two million people.

In turn, they have created 2,500 jobs

and avoided 1.3 million tonnes of

carbon emissions. In the next section,

we consider our work in the context

of five application areas: agriculture,

health, education, households and

small businesses.

for all

According to the

International Energy

Agency, only 40% of the

new energy provision

required for universal

access is likely to be by

grid extension. Small

businesses are most

likely going to provide

the rest.

On grid

Mini grid

Off grid

Sources of new access toelectricity in Africa


Polic

y&Re

gulation Demog

raph

ics

Marketdeman

dMacro

-eco

nomy

Businesscon

cept

Performingbusiness

TECHNOLOGY

DELIVERY

NETWORK

CAPITAL

SKILLS

How GVEP helps energy SMEs


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Access to modern energy playsa fundamental role in improvingthe health of the poor indeveloping countries. At a household

level there is a close relationship

between health issues and energy

use, while at a community level there

is a clear link between energy and thequality of health services available.

The health of the 2.7 billion people

without clean cooking facilities is at risk.

Cooking with fuelwood or coal-based

fuels on inefficient fires and stoves

results in 1.5 million deaths a year, due

to indoor air pollution and associated

respiratory infection. The toxic fumes

from kerosene lanterns cause chroniceye and lung conditions, and their

flammable nature is to blame for many

burns and similar injuries. The majority

of deaths are among women and

children who do most of the cooking

and spend a larger proportion of

their time indoors. These deaths and

diseases are largely avoidable with the

use of modern energy in the form ofcleaner fuels, more efficient stoves and

better ventilation.

Health


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Unsanitary water leads to

many deaths in developing

countries. Providing

clean energy creates

opportunities to upgrade

water pumping and

treatment services saving

lives.


Lack of access to safe drinking

water, inadequate sanitation and poor

hygiene is another critical health issue,

associated with 2.2 million deaths

every year, mostly of children. Modern

energy services play another role here

in improving health through upgraded

water pumping and treatment.

At a community level, the quality

of health services in clinics and

health centres can be improved

with modern energy services. Even

a small clinic needs basic lighting,

vaccine refrigeration and equipment

sterilisation, while larger facilities

need greater levels of refrigeration

for blood and medicines, as well as

power for medical equipment and

instruments. Electricity and/or modern

fuels are therefore essential. In addition,

improved lighting allows patients to

be treated and emergency operations

to be held after dark; well-equippedmaternity facilities and upgraded water

hygiene improve maternal and infant

health care; and additional lighting

around clinics and hospitals leads to

increased public safety.

Electricity also allows for improved

Information and Communication

Technologies (ICTs). The internet

can have a positive impact on health

care in many ways: through remote

consultation, access to up-to-date

information and medical training,

improved public health information

and increased sharing of knowledge

and skills. As well as the internet,

public education campaigns via radio

and television are important in raising

awareness of prevention and treatment

options for HIV/AIDS, for example. In

addition, the provision of electricity for

doctors and nurses accommodation

helps retain skilled staff.

Health offers a universalindicator of progressin attaining the UNSecretary Generalsgoals for SustainableEnergy for All.World Health Organization,Health Indicators ofsustainable energy, June2012


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Whilst locally produced stoves do

not wholly address the health risks

of indoor air pollution, this work is

clearly helping to move things in the

right direction and is building a strong

foundation for the future.

Solar power for aUgandan health centreBubaale Ill Health Centre is a

24-hour medical facility serving the

rural community around the town of

Mbarara in south-western Uganda.

With 30 beds, including a maternity

ward, and both in and outpatient

services, the facility used to be lit

with torches, paraffin lanterns andcandles. Now it has a 100W solar

system powering eight lights, as well

as a microscope and mobile phone

chargers.

Solar entrepreneur, Matovu Kennedy,

who is supported by GVEP, marketed

his products and services to the facility.

He also offered them the opportunity to

pay for the Ush2 million ($850) system

in two instalments.

These developments have cut the

facilitys paraffin bill, and Bubaale

hopes to expand the system to cover

the whole centre.

Hydro-power in aRwandan hospitalIn northern Rwanda, a former hospital

doctor has been instrumental in setting

up a hydro-electricity company. Tiredof seeing the hospitals limited budget

being spent on diesel and realising the

nearby river could provide hydro-power,

he joined with others to found Amahoro

Energy. The company is constructing

In Kisumu County in

western Kenya, Jackline

Awino has noticed several

improvements since she

started using her new

cookstove. Her youngest

sons persistent cough has

gone and his overall health

has improved. Jackline also

finds she doesnt have to

sweep and clean her house

so often each week as the

cookstove generates less

soot and smoke than her

old stove.

Clean cookstoves inEast Africa

A study by GVEP on behalf of theGlobal Alliance for Clean Cookstoves

recently reported that 15 million

Kenyans are directly exposed to

indoor air pollution. GVEP is tackling

this problem by supporting the

development of markets for fuel-

efficient, affordable cookstoves. We are

working with about 400 entrepreneurs

involved in stove manufacturing

in Kenya, Tanzania and Uganda,

offering technical guidance, business

development support and marketing

advice, and helping to forge links up

and down the supply chain. These

businesses are growing strongly, and

last year shipped over 275,000 units.

Examples of

GVEPs work

Case study


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Micro hydro-powerThere is a significant opportunity

to increase micro hydro-power inAfrica. Currently, it is estimated that

the potential capacity of micro hydro

generation is less than 1% utilised,

and it is often in remote areas away

from national grids. GVEP can play a

major role in supporting local project

development teams, especially during

the early phase of projects, when

capital is typically very tight. As a first

step, we are developing contacts with

additional project development teams inKenya to provide this support over the

coming years.

Refrigerating vaccinesEach year about two million people

around the world die of diseases

preventable by widely used vaccines.

Inadequate refrigeration for vaccines

causes millions of lost lives and

billions of wasted dollars every year.

Some reports claim that nearly half ofall vaccines in Africa are lost due to

breakdowns in the cold chain.

There is an opportunity to work with big

agencies involved with the distribution

of drugs and vaccines to design a

programme which helps to establish

and grow local businesses and

distributors that provide solar energy

powered refrigeration solutions.

Clean cookstovesOver the next five years, GVEP wants to

build up the local supply side capability

for improved cookstoves in Kenya and

support work on standards and quality.

If one million households move over to

improved cookstoves, approximately

eight million tonnes of CO2

will be

avoided over the four year lifespan

of the stoves. We must also work to

improve the performance standards

of locally produced stoves in order

to maximise their health benefits. To

generate employment, we also want tocreate new businesses and strengthen

existing ones in the supply chain.

Finally, we hope to leverage private

sector funds and provide access to the

carbon market for the next 20 years.

Safe drinking waterMore than one billion people lack

access to safe drinking water and more

than two billion live without access to

adequate sanitation today, causingnumerous health problems.

GVEP sees opportunities to work

at the community level, partnering

organisations that improve access to

pumped drinking water and provide

home-scale portable water filters.

Solar power for healthcentresJohn Maina is Business Director ofSCODE, a retailer of solar lanterns in

rural Kenya and he works with GVEP.

He has established a link with the

Mogotio Health Centre in Baringo

county.

The health centre is connected to the

electricity grid, but doesnt have a

back-up power source. When power

fails, it resorts to kerosene lamps.

Johns solar lanterns are a safe andcost-effective alternative, for which

midwife Roselyn Nyagol can already

vouch.

Both solar lanterns and solar mini-

grids can improve the centres access

to energy. If this link-up between

SCODE and Maogotio Health Centre is

successful, we hope the model can be

replicated in other hospitals across the

region.

a small generating facility to supply

electricity to the national grid, which

has recently been extended into the

area and will reach the hospital within

the year.

GVEP is assisting Amahoro Energy

with a second, bigger project by

providing cash and in-kind support

during the development phase,

including helping secure other

sources of capital funding. This is

one of six similar projects we are

supporting in Rwanda.

Hydro-power inTanzaniaA 4MW hydro-electricity project is

proposed for the Luswisi River in

south-west Tanzania. The facility

will provide electricity to 20 villages

currently without electricity supply

and dependent on biomass for

cooking and kerosene for lighting.

Within the region are five dispensaries

and a hospital, which will also benefit.

The dispensaries will be able to

run fridges to keep vaccines in and

the hospital will use the power to

supplement that produced by its own

50kW hydro plant.

GVEP is helping six projects like

this in Tanzania, again through a

combination of cash and in-kind

project development support. These

projects will distribute power to rural

communities as well as supplying

the national grid. Among the projects

is Mlangali MHP, which will supplypower to eight villages, including

three dispensaries and 20 schools.

Opportunities for the future



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Agriculture continues to be the

dominant economic activity and

source of employment in the

developing world. Forty-five per cent

of the developing worlds 5.5 billion

people live in households involved in

agriculture. In developing countries,

agriculture generates an average 29%of gross domestic product (GDP)

and employs 65% of the labour force.

Energy access is key to improving these

peoples livelihoods and increasing

productivity all along the agricultural

value chain, contributing to increasing

incomes. Growing food crops requires

energy for land preparation, planting,

irrigation, harvesting and processing.

Grid extension, renewable energy

technologies and hybrid systems canprovide energy services that support

these processes.

The UNs Food and Agriculture

Organisation estimates that the

agriculture and food sectors account

for around 30% of global energy

consumption.

Access to water is a key determinant of

land productivity. Irrigated land yields

are more than double those of rain-fedland. Although water availability is the

key factor for irrigation, energy and

pumping technologies often also play

key roles. Mechanical pumps are often

the most suitable for smaller land areas,

while renewable energy in the form of

PV pumps, hydraulic ram pumps and

wind pumps can also be economically

viable.

About 30% of food consumed indeveloping countries is perishable.

Energy services can help provide

controlled temperature storage to

reduce losses and increase incomes.

Smallholders can increase their incomes

by selling processed products, which

have a higher value than unprocessed

crops. Most processing in rural areas,

such as drying and milling, is currently

done by hand, which is time consuming,and predominantly performed by

women. Energy services could

reduce this burden at a household or

community level.

Mechanical energy, supplied by people,

animals, engines or motors, is also

essential to the agricultural production

process. Mechanisation is a key factor

in any farming system; each step up

the technology ladder improves theproductivity of farm labour and land.

Transport is another important factor in

farmers access to markets.

Farming also consumes embedded

energy associated with inputs such

as fertiliser and pesticides. The need

for these can be reduced if the farm

or smallholding uses its own organic

manure or produces its own organic

fertiliser. If this is done in an anaerobic

digester, the resulting biogas can be

used for cooking and light. If the plant is

large enough, the resulting gas can alsopower electric generators, for example

at larger dairy, livestock and poultry

farms.

Energy is also needed for the ICTs

which link agricultural workers to their

markets and increase their agricultural

knowledge. Mobile phones, radios and

television can help farmers keep up

to date on local market and weather

information. They also contribute tosharing agronomy knowledge and are a

key component in agricultural extension

programmes.

Agriculture &

food production


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GVEP works in Kenya and

Uganda with small biogasproducers to increase the

demand for their services and

the awareness for its benefits.


Agricultural by-productsas energy sources in

East AfricaIn East Africa, crops such as maize,

cereals and sugar cane all produce

residues that can be used to make

briquettes, which serve as a sustainable

alternative to charcoal or fuelwood for

cooking. Potentially, their contribution to

addressing the approaching biomass

crisis in the region could be significantly

increased as they reduce pressure on

local forest resources.

GVEP is working with entrepreneurs in

Africa to boost the production and use

of sustainable energy sources.

Biogas in UgandaA renewable source of energy, biogas

can be produced from anaerobic

digestion of animal manure, and if

widely adopted for cooking, it reduces

fuelwood demand and the deforestation

which goes with it. GVEP has teamed

up with Heifer International, an NGO that

donates livestock to poor communities,

and together we are identifying

potential projects in locations with large

concentrations of animal manure.

Examples of

GVEPs work

Kenyan inventor and entrepreneur Patrick Mwangi is based

in the agriculturally rich central region of the country. He

produces briquettes using agricultural and domestic waste

material. A trained aircraft technician, Patrick also designs

briquette-making machines, using them to produce his own

briquettes as well as selling them.

Patrick attended GVEPs marketing and business management

training, and with our ongoing support has successfully

increased his sales.

He is now looking to expand his business and develop his

designs for both machines and briquettes. He has already

invested in a computer and a pick-up truck. As his sales

improve so do his employees salaries. His children are also

benefiting as his profits are helping with their education.

Case study


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GVEPs collaboration with Heifer

International is providing technology

and business training, mentoring and

coaching for biogas construction

enterprises and masons in Soroti and

Mbale regions. As well as helping

them create business plans, GVEP

also arranges for entrepreneurs to visit

each other and learn from their shared

experiences.

Agri/food businesses inSenegalGVEP is working with various

agricultural and food production

companies to help them plan and fund

investments to improve their access to

energy and their businesses capacity

to capitalise on that improvement.

Micro hydro communityprojectsFounded in 2002, Thiba Mini Hydro

Power Project is a community initiative

generating electricity in the Kenyan tea

growing district of Kirinyaga. Currently

160 households are connected, and

they aim to reach at least 300. In this

area of central Kenya, less than 15% of

households have access to electricity.

GVEP provided financial support forthe upgrade of the facility and helped

establish governance and operational

management. We also offered the

project technical and business advice.

Once complete, the project will provide

power for domestic and commercial

users, processing and trading the local

crops.

Case study

Case studies

Farmers and parents of

three, Deborah and Charles

Ssenyonjo, are based in

Kimaanye, Masaka, insouthern Uganda.

Over a year ago, GVEP-

trained entrepreneur Margret

Kisakye, gave the Ssenyonjos

a briquette sample and after

trying them out, they shifted

from charcoal to briquettes

for good. They estimate their

monthly fuel budget has

reduced by 50%. The money

theyve saved has been spent

on school fees.

The Ssenyonjos have sinceattended a training day with

Margret to learn how to

produce handmade briquettes

for their own use. Now they

hope to expand production

for commercial purposes and

purchase a briquette-makingmachine.

In northern Senegal,

agricultural company

Temeye Agro (pictured right)

needs energy to expand its

irrigation system. Improvingits access to energy will

mean the business can

produce more and sell its

vegetables at lower prices

than the imported goods that

many people currently buy.

It will also bring clean water

to the nearby villages and

create new jobs.


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One of seven small businesses GVEP

works with in Senegal is Bilaame Pul

Deboo dairy, in the southern region

of Kolda. Run by women and headed

by Ms Tida Mballo Kand (above), the

dairy is looking to expand. It hopes

improved access to energy will help

it build three collection centres in the

surrounding area in the nextthree years, and increase its

processing capacity significantly.

A GVEP grant, funded by

Barclays plc, is upgrading

the Thiba Mini Hydro Power

Project, providing energy to

part of the Kenyan district of

Kirinyaga.


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Biomass and biogas for

cookingThe imbalance of supply and demandof firewood in East Africa means

there is a major problem of rapid

deforestation, and charcoal prices

have doubled in the last year, putting

economic pressure on those using

it. Biomass and biogas are attractive

alternatives. Supporting businesses

producing these alternative energy

sources at both local and national level

is important if the reliance on expensive

and unsustainable firewood and

charcoal is to be reduced.

We want to develop our work with

briquette and biogas businesses to

help establish larger scale solutions.

This support may include help with

feedstock strategy, marketing and

access to capital for new equipment.

Food production andpreservationGVEP wants to work with more food

producers to ensure they can access

reliable and cost-effective energy.

This will help them produce and

preserve more food as well as improve

distribution to a wider network. We

also hope to run programmes to help

farming communities process their

produce. For example, a community

of coffee producers in central Kenya

without access to energy will hand

pick their beans and sell them as a

raw product to local cooperatives. If

they had energy, they could process

the beans, package them and sell the

finished product directly to retailers.

Phone charging for

farming communitiesFarmers use mobile phones to accessinformation about the weather, market

prices and agronomy. The ability to

charge their phones is crucial.

Currently, GVEP supports about

130 phone-charging businesses

whose customers are involved in

growing crops and raising livestock.

As well as providing technical and

business training, our Loan Guarantee

Fund supports the loans which the

businesses use to purchase the solar

panels and associated equipment.

We hope to expand our existing

programme and to create many more.

We are also testing the potential for

them to sell solar lighting products.

Distributing solar

systems and energy-efficient stovesOther NGOs and government

agencies work with extension

networks of advisors and role models

to disseminate information to and

develop the productivity of farming

communities. We see a significant

opportunity to work with these groups

to promote distribution of solar systems

and energy-efficient stoves. For

example, we could provide technicaland supply chain advice, and develop

appropriate end user financing

schemes.


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As householders and

institutions begin

to understand the

benefits of solar

lighting, retailers like

this one near Nakuru

in Kenya, are meeting

the demand.


Small businessesS

mall and medium-sized

businesses and the informal

sector account for 90% of

businesses, 50% of GDP and 63%

of employment in Africa. Creating

opportunities for small businesses to

flourish is fundamental to sustained

economic and industrial growth.

However, they require infrastructure,

communications and finance without

these growth will be limited.

Typical small businesses include shops

and restaurants, chilled foodstuffs,

mobile phone and car battery charging,

sewing, food processing (eg. milling),

artisan workshops (eg. metalwork),

electrical and vehicle repair, internet

provision and television/DVD cinemas.

Energy is essential for service and

production businesses in both formal

and informal sectors. For example,refrigerating dairy goods allows

producers to reach larger markets;

fishing communities can install ice-

making facilities for better storage

and export sales; workshops and

food processors can mechanise

with milling, saws, lathes or electric

sewing machines; and the availability

of process heat allows for plastic

moulding and metalwork.

Affordable lighting enables increased

operating hours for entrepreneurs,

shops and workshops, while street

lighting helps to extend opening

hours for street vendors. At the

same time, working conditions can

be improved, with cleaner and safer

means of heating, cooking and

lighting, eliminating polluting kerosene

lamps and cooking stoves and

replacing illegal and unsafe electrical

connections. This can benefit bothworkers and customers, attracting new

business and income, both through

an improved local environment and

an enhanced capacity for electrical

appliances such as television and

internet.

An increased demand for modern

energy services itself provides

opportunities for business, offering

new sources of employment and

income generation. Opportunities

exist all along the value chain, from

the supply and processing of fuel

to the sale, manufacture, installation

and maintenance of equipment and

appliances. This is particularly the

case with decentralised technologies

such as improved cookstoves and

renewable energy technologies, as

they represent services that can be

provided by entrepreneurs and small-

scale, locally owned businesses orcooperatives.


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Examples of

GVEPs work


Mini-grids and smallhydro systems inTanzaniaIn farming villages like Usalule,

cultivation of potatoes and maize, and

small businesses such as shops are the

main economic activities.

A reliable source of energy like a small

hydro plant will benefit the businesses

and domestic households, as well

as institutions such as hospitals and

schools.

GVEP is currently supporting sixdevelopers of mini-grids and small

hydro systems in Tanzania, helping

them through the steps necessary for

successful project development, and

encouraging them to supply power to

productive end users and businesses

to generate profit. We are also doing

this in Rwanda, and are about to start

in Kenya.

Solar phone chargingin TanzaniaSolar home systems not only provide clean

electricity for domestic uses, they can also

open up businesses opportunities.

Michael Kiggundu of Besoke in rural

Uganda farms coffee, bananas and

cassava to support his wife and six

children. Six years ago he bought a 20W

solar panel, partly funded by a loan from

his grandmother. It replaced the traditional

kerosene lamps and candles, providing

his family with clean, reliable lighting and

meant he could set up a mobile phone-

charging business. Since then, Michael has

received marketing and technical training

from GVEP and expanded his business.

He now has solar PV systems with 60W

capacity, so he can charge between 25

and 30 phones a day. The profits pay for

his childrens education, medical bills,

fertilisers and household items.

GVEP helps small entrepreneurs like

Michael to get the skills they need to run

their businesses and to access finance

to buy equipment. Accessing finance is

often the main obstacle to growing a microbusiness in developing countries. Few

banks will offer loans without collateral,

Saving our planet, lifting the poor frompoverty, and advancing economic growth forall are one and the same cause From the soilof sustainable development we can grow peace,security, human rights and a world of opportunityfor all.

Asha-Rose Migiro former United Nations Deputy Secretary-

General, October 2011


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Frank Gilbert runs

a phone charging

business in Mahina, a

rural Tanzanian village

that lacks access to

the electricity grid.

Before the business

began, people had to

travel at least 12km

to reach the closestelectricity point.


but GVEPs loan guarantee programme

helps entrepreneurs overcome this

difficulty.

Improving productivity

and creating jobs inSenegalIn many Senegalese villages young

people move to the capital, Dakar, to

seek work, but supplying energy to

tourist facilities is helping to address

this problem in one village. Two tourist

camps use the electricity to power

lights, ventilators and modern facilities,

and so attract more visitors, which in

turn means they employ more local

young people.

Improving the provision of energy

enhances productivity and boosts

economic activity. GVEP supports

seven Senegalese businesses in

various sectors to use improved access

to energy in order to develop their

activities. The businesses benefit from

increased production and profitability,

while the surrounding communities

benefit from job creation and increased

incomes to pay for education and better

food. Projects like this can also reduce

rural-urban migration.

Accessing finance

A recent GVEP study found almosthalf of energy entrepreneurs cited

lack of capital as a barrier to business

growth. GVEPs Loan Guarantee

Fund, launched in 2010, works with

financial institutions and micro and

SMEs to increase the availability

and affordability of loans. The fund

comprises a portfolio of partial

guarantees made with financial and

intermediary institutions, which then

provide credit to entrepreneurs.

The improved security removes theneed for collateral and helps to make

borrowing rates affordable.

We plan to expand this programme to

increase significantly the number and

size of entrepreneurs supported.

Capitalising on energysupply

When a new supply of reliableelectricity arrives in a community, it

creates opportunities. New businesses

are established and existing ones

expand, diversify and increase

productivity. It isnt simply energy-

related businesses, such as phone

charging, that appear though. A reliable

energy supply allows entrepreneurs to

develop workshops, crop processing

and food preservation companies.

GVEP wants to work with entrepreneurs

to develop projects like these, so-called

productive use projects. We can help

them realise the full economic potential

of improved energy access.

Market developmentWe want to continue our work with our

existing entrepreneurs to boost their

markets by creating links between

businesses. For example, linking

cookstove assemblers with retailers.

Such links increase market reach

and sales. We hope to do this with

individual links and through group

market development activities. We

also want to help create demand

for the entrepreneurs products bydemonstrating to communities what

they can achieve with access to clean,

reliable energy.


Isesa is a remote Tanzanian village with

3,000 inhabitants with no access to theelectricity grid. Mpanduji Mhanda runs a

solar phone-charging business and owns

a solar-powered hairdressing salon and a

video shop.

Mpanduji benefited from GVEPs technology,

business management skills, marketing

and customer care training. He now plans

to expand his business, renting solar

lanterns and selling solar panels, batteries,

inverters and charger controls. The localmine workers, as well as teachers and health

workers, are all potential customers.

Case study


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Energy is at the heart of any

home. For most households

cooking is the most important

energy need; 95% of basic staple

foods need cooking. Most cooked

food also requires water, which

must be pumped and transported,and in some cases boiled. Homes

need lighting and heating, food may

need to be preserved, and modern

energy services can also provide

opportunities for income generation.

Actual energy use in a household

varies depending on the local

environment, availability of energy,

livelihoods and incomes. However,

throughout the developing world,

the majority of women still cook

and heat water with fuelwood,

charcoal, biomass or coal-based

fuels on inefficient fires and stoves.

In rural Africa, poor households can

spend up to 35% of their income

on inefficient energy forms, such as

kerosene, charcoal and batteries.

Affordable and efficient cookingfuels and stoves can reduce indoor

air pollution, cut household energy

costs and reduce time lost in

gathering fuelwood. Although the

options for clean cooking include

more expensive LPG, gas, bio-

ethanol and electricity, reliance on

traditional biomass for cooking and

heating will probably continue for

decades to come. Therefore, one of

the important ways of addressing this

urgent problem is the introduction of

improved cookstoves.

Further, the 1.3 billion people with

no electricity in their homes must do

their work and study from dawn to

dusk, or rely on expensive candles or

kerosene lamps. These provide poor

illumination, affect their health and are

a fire hazard. Radios use expensivebatteries and charging a mobile

phone could mean travelling miles.

Gasoline and diesel are also used

for transport and agri-processing but

tend to be used by households with

higher relative incomes.

The energy needs of most of these

people are modest yet they need

quality light to be able to earn income

from handicrafts or for extendedopening hours in the market, mills

and shops. Their children need

good light to study in the evenings,

and access to modern forms of

communication can ensure they

are not cut off from the world, their

relatives and friends, or their markets.

As incomes increase, electricity can

also provide the opportunities for

other household appliances such as

fans, irons, TVs and refrigerators.

The electricity requirements for

these needs are minimal and, where

communities are off-grid, they can

easily be met by decentralised

renewable energy technologies.

Biogas can also provide light and

cooking where there is sufficient

feedstock, and mechanical power is

an option for water pumping.

Currently, the problems of accessto modern energy services are

greater in rural areas. However, with

increasing urbanisation there are

increasing gaps in access in poor

urban areas

Households


23/36

Tanzanian Helena Msamaba

(pictured right) got an improved

cookstove for her large

household. The benefits for her

are clear. She can cook with more

than one pot at a time, saving

her time, and she saves on fuel

too. Since getting her cookstove,

Helenas expenditure on fuel has

reduced from

Tsh 80,000 ($50) a month to Tsh

20,000 ($12).

Getruda Ndungile (pictured

right) is a teacher from Ngudu

in Tanzanias Kwimba district,

who also sells cookstoves. Since

being trained by GVEP, she has

expanded her business, opening

a second outlet and hiring a

new employee. With the supportof her GVEP mentor, her sales

have increased. Getruda started

by selling two or three stoves a

week, but having engaged with

the community to explain the

benefits of the stoves, she is now

selling 10 a week.


Clean cookstoves inKenya, Tanzania andUgandaThe health, financial and time-saving

benefits of clean cookstoves are

well documented. However, there

are still challenges as the business

is largely informal and fragmented,

meaning standards and quality are

not consistent. GVEP is helping 400small-scale cookstove producers and

distributors overcome these challenges,

by strengthening their business skills,

developing their marketing awareness

and customer care and providing

access to finance and technology

support, as well as promotingknowledge sharing and research.

Last year, they sold over 275,000

stoves.

Examples of

GVEPs work

Case studies


24/36


Solar power in Tanzaniaand UgandaGVEP is helping to promote the use of

solar products, such as lanterns and

larger home systems, by providing

local stockists with technical advice,

marketing training, business coaching

and facilitating access to affordable

loans with its loan guarantee

programme.

Ngudu town in Tanzanias

Kwimba district is connected to

an unreliable electricity grid. To

overcome this and to support

themselves financially, Emmanuel

Stephano and Musa Tembe set up

a business selling and installing

solar home systems. Over time,

these systems are significantlycheaper than connection and the

monthly charges from the national

grid. Some customers can afford

to pay for a system from their

savings, while others pay by

instalment.

Since getting training and support

from GVEP, Emmanuel has seen

his sales rise. He has also learnta lot about the different solar

systems available and, with his

mentor, he has written a business

plan. His next step is to open a

shop in Maloya.

Emmanuels increased earnings

mean he can educate his son and

buy a plot of land where he hopes

to build his own home.

Teacher and mother of seven, Bogusu Kanyumbu (pictured

above) bought her 65kW solar panel, charger and controls

from Emmanuel. She can run a small television, as well as

lighting and charge her mobile phone. To install the system,

Bogusu took out a loan from her bank, and despite the initial

cost, she is very happy with her system.

Once she has broken even, she plans to use the savings to

add to her system to improve her familys life.

Case studiesThanks to solar power,

off-grid communities canenjoy all the amenities

of an urban household

would.


25/36


Maria Peter from Tanzania also

bought a solar home system.

She used part of her husbands

retirement fund to buy it after

recognising the importance of

solar power compared to the

unreliable national grid. She is

saving both time and money

which she now uses to support

her extended family.

Businessman Godfrey

Kasimagwa (above) sells solar

lanterns, buying from retailers

in Kampala, and selling to

customers in rural districts.

He started his business with a

loan, and GVEP has provided

him with training and advice.

Now he employs four people in

this thriving business, payingthem a share of the profits.

One challenge is customer

awareness. GVEP is helping

overcome this too, providing

support, including marketing

materials, to build awareness.


26/36


Mobile phonecharging in TanzaniaIn major cities, mobile penetration is

approaching 100%, but in rural areas,

its closer to 30%. Using mobile phones

in off-grid areas can be inconvenient;

many users travel several kilometres

to charge their phones. This limits their

ability to use their phones ef fectively, forexample for banking and information.

The demand for phone charging is a

key driver of rural electrification. Solar

systems are emerging as viable phone-

charging methods in areas where grid

access is not available or intermittent. It

is also a profitable business proposition,

but lack of access to funds is hindering

development. GVEP believes supporting

these businesses is an effective

way of driving economic and social

development in rural, isolated areas.

Biogas in rural and urbanareas of Kenya andUgandaBiogas can be an excellent alternative

to fuelwood or charcoal. Cow manure

and small-scale biogas digesters are

a sustainable source of power all yearround. Easy to make, operate and

maintain, biogas digesters also provide

a useful by-product: fertiliser. They have

the potential to improve health and

livelihoods throughout the developing

world.

GVEP works with installers of small

biogas systems in Kenya and Uganda

to boost awareness of the benefits and

demand for their services.

Case studySamuel Kinoti (pictured)

is CEO of Sky Link

Innovations, a Kenyan

biogas company installingdomestic and institutional

biogas systems as well

as importing and selling

biogas accessories. Its

domestic systems are

designed for households

with between three and

eight cows. The gas is used

for cooking but can also be

used to generate electricity.Sky Link also installs larger

systems in institutions such

as schools and prisons,

which use human sewage

from the latrines.

Trading for four years

now, Sky Link improves

awareness of biogas

technology throughits network of local

entrepreneurs. The

business is growing and

diversifying. A previous

winner of an Ashden

award, it has also benefited

from seed funding and

growth advice provided by

GVEP.


27/36



Clean cookstove supplyIncreased penetration of clean cookstoves

is being driven by a combination of factors

including national government policies,

support from the Global Alliance for

Clean Cookstoves, and the development

of relevant methodologies in the carbon

markets. While this demand can be

met by imported stoves in many cases,

there is also an oppor tunity to develop

local supply-side capability to capture

a higher share of the economic value in

the country. Based on our experience of

working with many local businesses in the

stove sector, GVEP sees significant scopeto contribute to this opportunity.

Helping microentrepreneurs expandGVEP plans to continue helping micro-

businesses to grow in the domestic energy

product markets. We are interested in

helping to create a bigger market for more

energy products, for example encouraging

householders to upgrade from a single

solar lantern to a solar panel.

We envisage a programme supporting

micro and SMEs to build their businesses

through stimulating marketing awareness

and facilitating access to finance in rural

Sub-Saharan Africa. Growing these

businesses will increase income and

employment opportunities. There are also

indirect benefits, such as an increase in

access to clean energy for their customers

and local communities.

Converting to solar orhybrid systemsGVEP hopes to work with diesel powered

mini grid companies and provide grant

money to small businesses to convert

their energy sources into solar or hybrid

systems. These businesses will save

money, by purchasing less or no diesel,

which they can then reinvest in their

businesses, allowing them to expand and

create more jobs. Replacing unreliable

diesel-based systems with solar or hybrid

energy sources also means households

get an improved energy supply.

Corporate servicesGVEP is looking to work alongside large

companies and corporations whose

products target African household

markets and who are keen to improve

their marketing profile by subsidising

energy access products.

Helping local communities meet their

energy requirements can boost the

success of companies working indeveloping countries. It has value too as

a corporate social responsibility (CSR)

initiative.

With our expertise and experience, we

can act as strategic partners to help

companies implement programmes to

meet communities needs and to meet the

companies own corporate objectives.

Improving financial inclusion is also akey element here so we anticipate that

financial services companies will be

interested in working with us.


28/36


Improved cookstoves inSub-Saharan schoolsSub-Saharan African schools spend large

amounts of money on wood or charcoal

for cooking. This could be reduced if they

had improved cookstoves that require

50% less firewood.

GVEP estimates that the cost savings

involved for a typical school of 300

students would be more than enough to

fund the appointment of an additional

teacher, for example. In addition, the

reduced demand for firewood helpsalleviate pressure on scarce natural

resources.

Facts and figuresUsing 2 cookstoves can save a school

around $3,000 per year.

If200 schools adopt improved

cookstoves, 9,000 tonnes of wood could

be saved every year.

Education defeats poverty. It is

one of the best investments a

population can make in its future;

an extra year of quality schooling canlift a countrys annual economic growth

by 1%. Yet this opportunity is limited for

millions of children because of poverty,

conflict, health issues or the need to

support their families. Although energy

alone cannot address the root causes

of these problems, improved access

to energy means more children can

have the chance to receive a better

education.

Children in poor families often have

many demands on their time, which

prevent them from attending school.

They help with farm work, food

preparation and income generation.

Where there is a lack of electricity

and a reliance on inefficient cooking

stoves, children are expected to collect

fuelwood and fetch water. School-age

girls are particularly affected by

these chores. Modern energy

services in the home can reduce

the burden on children, givingthem more time to study and attend

school. They can also provide

lighting to allow studying after dark.

Meanwhile, access to electricity in

schools offers greater opportunities

for learning. Schools can open

in the evening, whether for extra

classes for kids, or for adult

education and literacy classes.

Modern learning technologies suchas computers and the internet

provide access to educational

material, distance learning and

continuing education for teachers.

Better facilities can also be used by

the community for other purposes,

and can also improve retention

rates of qualified teachers.

EducationExamples of

GVEPs work

Case study

Based in Nairobi, Kenya, Kartech

Agencies manufactures improved

cookstoves for institutions. The

high upfront costs of cookstoves

pose financial challenges for

schools, which typically collect

fees on a term-by-term basis.

They can therefore only place

orders at certain times of year,

which impacts on Kartechs

workflow.

GVEP is helping to overcome this

problem with its loan guarantee

programme. A local financialinstitution provides credit to the

schools so they can buy stoves

Safer, cleaner energy in

schools and homes improves

the educational chances of

many children throughout

Africa, including these children

in a well-lit classroom in rural

Kenya.


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Opportunities for

the future


Solar power in TanzaniaAfter receiving technology and business training from GVEP,

Joseph Robert expanded his solar phone-charging business

and he now sells and installs solar systems.

Joseph has installed a 60W system at Mtumbulo secondaryschool in Nyanzumula village in northern Tanzania. The

school is a mixed day and boarding school with 600 students.

Its headmaster, Mr Bonya invested in the system to provide

lighting so the students can study in the evenings. The school

already used a diesel generator during the day, but relied on

candles and kerosene lanterns in the evenings. The students

couldnt work by this poor quality light.

Since installing the system, Mr Bonya estimates the school

has saved TSh 300,000 ($190) per month. The savings are

spent on books and equipment.

Clean cookstoves in schoolsGVEP plans to expand its improvedcookstoves programme for schools across

East Africa. This expansion will bring

economic benefits as well as environmental

and social benefits, such as reduced carbon

emissions and reduced consumption of

scarce biomass and a healthier working

environment for school cooking staf f.

Two hundred schools with improved

cookstoves could save up to $240,000 per

year, for reinvestment in education, benefiting

60,000 children. Such programmes also

create business opportunities for energy

entrepreneurs.

Solar for schoolsSchools are a focal point for community life.

As such they are a doubly attractive target

for solar technology deployment, to increase

both the effectiveness of schools, and to

demonstrate the benefits of the technology

to the wider community. GVEP intends to

continue its work in this area and develop

programmes supporting the development of

this segment of the market.

Community hydro projectsCommunity and social facilities, such as

schools, are frequently among the primary

beneficiaries specified in the business case

for a new mini-grid or micro-hydro project. We

intend to continue to identify these projects

and their development teams, provide them

with development advice and support and

access to capital, so that their benefits may

be realised.

from Kartech Agencies and they pay it back in

instalments over two years.

Kartechs Marketing Manager is Antony Riri. Thanks

to our training, he has developed strategies to help

him market to schools, for example explaining the

fuel savings.

Rockfields boarding school is making such savings

since it acquired stoves from Kartech. It is now

reinvesting that money in education.


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Enterprise development DEEP Developing Energy

Enterprises Project, operational

since March 2008. This 4 million

initiative supported by the European

Union and Dutch Ministry of Foreign

Affairs (DGIS) aimed to deliver

energy access to 1.8 million people

in Kenya, Tanzania and Uganda by

the end of the project. This target

was achieved in April 2012, 10months ahead of schedule. There

are 900 small-scale entrepreneurs

participating in the programme,

involved in the manufacture and/

or supply of clean cookstoves,

solar PV products and services,

clean fuel briquettes and biogas

systems. GVEP provides them with

mentoring, training and support

services covering: product quality

and technical issues, business and

sales skills, access to finance and

the supply chain.

At a project cost per beneficiary

of2per head, DEEP represents

excellent value.

ESME Supporting Energy SMEs

Project support in Sub-Saharan

Africa, a $30 million programme

funded by the Russian Government,

managed through the World Bank,

and covering Kenya, Tanzania,

Rwanda, Mali, and Senegal.

GVEPs activities include: assisting

developers of mini-grids and small

hydro systems to finance and

deliver their projects, supporting the

development of the solar PV market,

and providing capacity building and

technical assistance to government

agencies.

Climate Innovation Centre GVEP

is one of the lead members of the

consortium recently selected by theWorld Bank, after an internationally

competed procurement, to set up

and run the Kenya Climate Innovation

Centre, a $10 million incubator for

businesses developing technologies

and business models associated

with climate change mitigation and

adaptation. The centre will provide

business and technical advice and

services, access to facilities and

small start-up grants, as well as

access to a seed capital investment

fund.

Access to finance Loan Guarantee Fund Matching

Energy Entrepreneurs with Financing.

In 2009, GVEP started a small

Loan Guarantee Fund to increase

the access to finance for energy

SMEs by linking them to financial

institutions. The fund also aims to

stimulate consumer product demand

through end-use consumer financing

initiatives. Funding from USAID and

support from the Garfield Weston

Our programmes

GVEP in action: running a workshop

with entrepreneurs in Kakuma,

Kenya. GVEPs programmes

throughout the developing world

focus on improving energy access

to alleviate poverty.


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Foundation, Jump Up and Barclays

Bank allowed GVEP to set up the

fund and to work with microfinance

institutions to develop loan products

for energy enterprises. This year we

received a further grant from the

Vitol Foundation, and this will be

significantly extended as part of our

recently agreed programme with the

Swedish International DevelopmentCooperation Agency.

Prometheus Fund GVEP has

recently partnered with AlphaMundi

Group, a Swiss impact investment

fund manager, to raise and manage

this fund with a target of50

million. It will make investments of

0.5-8 million in renewable energy

companies and projects in Sub-

Saharan Africa. The fund will targetpropositions which demonstrate

significant and measurable social

and environmental impacts, as

well as financial viability. It will

consider generation projects such

as hydroelectric and wind facilities,

as well as companies which provide

products to the base of the pyramid,

such as solar product and cookstove

manufacturers and distributors.

Prometheus is a key initiative to

leverage GVEPs donor-funded

support with private sector capital to

generate even more scalable impact.

Energy Challenge funds/contests

In 2010, with support from

Barclays Bank, we awarded grants

of between $15,000 and $75,000,

plus follow-on business support,

to eight small renewable energy

businesses in Kenya, Uganda,

Tanzania, Mozambique and Rwanda.The technology scope covers

wind, small hydro, waste-to-energy,

biogas and biofuel. In addition,

GVEP operates a series of larger

Energy Innovation Contests, called

IDEAS, in Latin America and the

Caribbean, in partnership with the

Inter-American Development Bank.

In 2010, we awarded up to $200,000

to 26 projects in the region; the latest

round, funded by DFID, recently

announced awards to eight projects.

We are also contracted by AGRA

(Alliance for a Green Revolution

in Africa) to provide advice to

renewable energy businesses

participating in the Africa Enterprise

Challenge Fund (AECF).

Grant funding Our ESME

programme includes the provision

of partial grant funding for certain

energy enterprises, such as mini-grids and solar products suppliers.

In these cases, the balance of the

capital requirement is due from

private sources. With quality advice

to ensure the associated business

plan is robust, the objective is to

minimise the proportion of grant

money in the overall capital mix,

consistent with allowing adequate

returns to the private capital.

Expert adviceWe also undertake selected

consultancy assignments where

clients requirements align well with our

strategic objectives. 2012 projects have

included:

An assessment of the clean

cookstove market in East Africa,

for the Global Alliance for Clean

Cookstoves (GACC).

A study on results-based financingfor the World Bank.

A study of household-level

renewable energy technologies for

the African Wildlife Foundation/Jane

Goodall Institute.

ImpactTo date, GVEP initiatives have provided

almost two million people with access

to clean energy, and a wide range of

technologies have been deployed,eg. improved cookstoves, solar lanterns

and solar home systems, energy

efficient briquettes and micro-hydro

schemes.

Over the last five years, as a result of

our activities:

1.3 million tonnes of CO2

have been

saved through the use of renewable

energy;

$20 million has been leveraged to

support the development of energy

products and services across the

developing world;

over 2,500 local energy jobs have

been created in Africa and Latin

America; and

around 70 entrepreneurs have

accessed capital through our Loan

Guarantee Fund.


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GVEPs strategy is to remain

focused on what we do best:helping small energy businesses

to grow in order to expand

energy access. We will continue

to do that by providing those

enterprises with business and

technical advice and helping

them to access capital, in some

cases provided by GVEP. Our

country strategy will allow for

some geographic expansion,particularly when pulled by a

specific donor, but will also be

informed by our view that, in

general, we will be more effective

doing a lot in a small number of

places than a little in many places.

We intend to continue our focus on

supporting innovation in the sector.

Technological innovation is often said

not to be the main issue, and that is

true, but it can be part of the answer,

alongside new business models and

new financing structures. We are

working with some of the leading

businesses in the sector, and intend to

continue doing so, for example through

the new Climate Innovation Centre. Our

proposed investment fund is another

example of this innovative approach,

using our on-the-ground network to

attract new sources of capital into thesector. Similarly, we want to continue

supporting policy innovations from

the public sector. Key trends here are

the growing interest in leverage (how

many private investment dollars will be

attracted for every taxpayers dollar),

and in results-based financing (RBF,

an approach in which aid money is

only paid out once a targeted result

has been achieved). We identify with

both of these: maximising leverage is

a key principle of our new partnership

with Sida, and we have worked on RBF

for both the World Bank and the UK

government.

We have developed a five-year

schematic programme built on these

principles to deliver our vision of

cumulatively impacting 15 million

people by 2016. Acknowledging

that our actual programme will be

determined by the demands and

priorities of different donors, we see

three types of work:

Large-scale programmes, across

a wide-ranging technology and/

or geographic remit, supporting

multiple businesses with a

combination of advisory and support

services. We anticipate these will

be funded predominantly by donor

governments overseas development

agencies and their multilateral

counterparts.

Smaller projects, providing similar

types of support, but with a more

narrowly defined objective or

beneficiary group. These projects will

target the specific agendas of less

deep-pocketed sponsors, such as

some foundations and corporates.

Initiatives specifically focused on

improving access to capital for

entrepreneurs and their customers

in the energy markets. This includes

managing or supporting grant

award programmes, scaling up our

loan guarantee programme, and

launching Prometheus, our impact

investment fund targeting renewable

energy/energy access projects and

businesses.

In terms of income, our ambition is to

fund this strategy through increasingly

diverse sources, moving away from

reliance on a small number of big

spending government agencies, to

include foundations, philanthropists,

impact investors and the corporate

community. In respect of the latter

group, we see particular opportunities

for our work to reinforce or otherwise

add value to a potential sponsors core

business. We are already in discussions

on this basis with a number of major

players from the extractive, consumer

products and financial services

industries.

Turning to the short term, our immediate

priorities for the next year are:

focusing on efficient and effective

delivery of our established

programmes: DEEP, ESME and

IDEAS;

establishing and launching our

new and recently announcedprogrammes, in particular the

Climate Innovation Centre in Nairobi,

the Prometheus Investment Fund,

and our major new partnerships with

Sida and OFID;

strengthening our business

development and fundraising

capabilities to build a steady stream

of potential prospects to replace and

build on our established programmes

as they approach maturity.

Our contribution will always be tiny

when compared to numbers like 2.7

billion living in energy poverty. But we

are making a difference, and can do

much more, on a scale that the team,

the trustees and our sponsors can be

proud of. Thank you again to all who

have helped us achieve what we have

achieved so far.

The next fi ve years


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GVEP International is governed by

a Board of Trustees

Matthew Mendis ChairpersonMatthew is the Managing Director of

C-Quest Capital LLC a carbon finance

business focusing on leveraging private

capital for investments that reduce

greenhouse gases while improving

the welfare of poorer communities. He

has devoted his career to addressing

issues of energy, poverty, and the

environment in developing countries.

He is an advisor to many international

development agencies and serves

on the Boards of a number of other

organisations.

Carole BrookinsThe Honourable Carole L. Brookins

served from 2001 to 2005 as the

United States Executive Director to the

World Bank in Washington, D.C. An

international consultant, she is currently

a Managing Director of Public Capital

Advisors LLC, and serves as a director

on both corporate and non-profit

boards, including the NTR Foundation

Advisory Board, Rabobank North

American Agribusiness Advisory Board

and the Center for Financial Stability

Advisory board amongst others.

Valery SorokinValery is a professor in the Russian Oil

and Gas University and a consultant of

the Expert Administration of the Russian

President. Previously he spent 10 years

in Washington with Russias diplomatic

service and also worked in Brussels as

the Deputy Secretary General of the

Energy Charter Secretariat. In 2005/6

he acted as head of the Group on

Global Energy Security of the Expert

Council on Preparation and Support ofthe Russian G8 Presidency and since

then he has consulted on the Russian

participation in G8 and G20 Frameworks

on Energy and related issues.

Joe LudlowJoe joined Nesta in 2010 to lead their

work on social venturing and investment,

including making and managing a

portfolio of investments in impact

investment funds and products. Joe led

Nestas involvement in the development

of Big Society Capital both running

Nestas own pilot fund the 1.5 million

Big Society Finance Fund, and advisingthe Big Lottery Funds Big Society

Investment Fund. Joe has been active in

impact investment since 2005, previously

working at CAF Venturesome, a leading

UK impact fund, investing in growing

social enterprises and charities.

Emily UnwinEmily is a lawyer with ClientEarth,

a public interest environmental law

organisation and works within theirClimate & Forests programme, based in

Brussels. She was previously a lawyer

with Bates Wells & Braithwaite, a London

law firm that works with commercial

and third sector organisations, where

she advised on environmental and

commercial law. She has a Masters in

international environmental law a

GVEP International - Annual Review 2011-2012

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