The UNCDF CleanStart team joined the Global Off-Grid Solar Forum in Hong Kong in January 2018. This event gave us an opportunity to reflect on how the program can evolve to meet the demands in one of the fastest evolving sectors cross-cutting clean energy, finance, and low-income financial inclusion.
UNCDF CleanStart began in 2012 with the mission of using grants and technical assistance to support microfinance institutions (MFIs) to take on energy lending that will enable low-income households and businesses to access energy solutions. In 2015, recognizing the rising role of other value chain actors in providing finance for energy solutions, we expanded our mandate beyond working solely with microfinance institutions.
Today, our portfolio of partners receiving grants as risk capital in Nepal, Uganda, and various countries across West Africa include nearly as many non-MFIs as MFIs. This is symbolic of the diversity of players gaining traction in energy lending. As of 2017, we have invested partnerships in:
- 15 MFIs including one that created a sister energy company
- 11 energy service providers
- 3 other financial institutions such as development banks, farmer cooperatives, etc.
In 2018, UNCDF CleanStart expects to grow its portfolio with even more solar energy partners through our latest Renewable Energy Challenge Fund in Uganda.
The Global Off-Grid Solar Forum this year gave us two major takeaways that will inform our strategic activities that drive our mission on energy access through financing:
1. Do MFI’s still have a role to play? If so, what is it?
UNCDF CleanStart programme manager, Vincent Wierda, moderated a panel on “Is PAYGO the Only Way to Go? Exploring Alternative Approaches to Consumer Financing”. During this session, an audience poll revealed that while PAYGO is the rising form of financing energy solutions for low-income households, MFIs still have a role to play.
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