LISBON/BARCELONA (Thomson Reuters Foundation) - After learning that three babies died in a government hospital in the Sierra Leone city of Bo last November when a power cut switched off machinery keeping them alive, London-based energy adviser Michael Liebreich decided to act.
He set up Project Bo to provide a solar electricity and battery system to supply uninterrupted power to the hospital’s oxygen devices and baby “warmers”.
The campaign has so far raised just over three-quarters of the £100,000 ($135,830) it is seeking.
A shift in thinking is needed to channel more funding to places where a lack of clean, reliable power is putting babies in danger and holding people back, Liebreich told a Lisbon conference on improving access to energy this month.
“The economic value of saving that life is currently not financeable,” said the founder of Bloomberg New Energy Finance, urging greater efforts to work out how it could be turned into something “markets can spray money at”.
Shine, an investment campaign officially launched at the Portugal forum, aims to do just that.
It brings together more than 35 faith, financial and philanthropic organizations - including the IKEA Foundation, the World Evangelical Alliance and Oikocredit, a cooperative and social impact investor - that will galvanize new money and expand solutions to boost energy access in the world’s poorest communities.
U.N. data showed last week that roughly 1 billion people on the planet still have no electric power, while about 3 billion cook with polluting fuels such as kerosene, crop waste and dung. [nL8N1S94S5]
Investments by governments and business are lagging far behind the amounts needed to close the gap in providing sustainable and affordable energy to everyone by the U.N. deadline of 2030.
Experts estimate that would require just 0.2 percent of global gross domestic product.
While the energy sector receives some $2 trillion in investments each year, only $13 billion of that prioritizes those living without electricity, according to Shine.
Ellen Dorsey, executive director of Wallace Global Fund, a private foundation and one of the founding partners in the campaign, said Shine - which aims to mobilize $100 million this year - will help investors put their money to good use in getting power to the world’s poorest people.
“We needed to have a champion, a constituency to stand up and say the billion (people) must be reached first,” she told the Thomson Reuters Foundation from Washington DC.
Virtually all the 17 Sustainable Development Goals - from ending poverty and hunger, to providing healthcare for all - will be influenced by people’s access to energy, she added.
Wallace Global Fund has committed to put 1 percent of its capital into impact investments in energy access, and to provide at least $1 million in grants each year with a focus on helping women in sub-Saharan Africa.
Rachel Kyte, CEO of Sustainable Energy for All (SEforALL), a U.N.-founded body which organized the Lisbon forum, said entrepreneurs trying to build local markets for small-scale solar systems in developing countries are struggling to find capital, including from development banks.
“The money is beginning to flow from the top, but... it’s not reaching some markets and in other markets, it’s reaching (there) but it’s too expensive,” she said in an interview this week.
Shine, in which SEforALL is a partner, hopes to attract new funders that could contribute to filling those gaps - whether in geographical locations or supply chains - with low-cost “patient” capital which is invested for at least three years.
“We need to stay committed until we get the job done,” said Dorsey. “This can’t be a fad.”
Some governments - including in Mexico and Rwanda - have set up funds dedicated to boosting investment in renewables and getting electricity to those without, and are cross-subsiding those efforts with levies on large power consumers.
Meanwhile, energy investment businesses like SunFunder are starting to raise larger amounts of debt finance for companies that are building off-grid solar systems in sub-Saharan Africa, often based on pay-as-you-go technology.
In a report this month, SunFunder said “catalytic capital” from foundations and impact investors, including Facebook and The Rockefeller Foundation, had been critical in helping attract institutional investors to its debt funds, by bearing upfront risks.
Yet despite a rise in investor interest, development and energy experts in Lisbon agreed that commercial dollars are unlikely to reach the most marginalized communities any time soon - especially impoverished women.
“There is a crying need among financiers to better understand the needs of small enterprises doing the last mile,” said Lucy Stevens of development charity Practical Action, referring to companies bringing clean energy to remote areas.
Researchers spoke about the importance of helping local people develop businesses that will stimulate demand for the power generated by micro-grids using renewable energy sources.
In south Tanzania, for example, a community-run hydropower utility set up agricultural processing plants whose revenues go towards maintenance costs and subsidizing cheaper power.
But in some cases, where a sustainable business model is simply not possible, governments and development agencies may need to look at bundling access to energy into social safety nets for the poorest, said SEforALL’s Kyte and others.
Andrew Scott of the London-based Overseas Development Institute said there would always be a proportion of people who cannot afford to pay for electricity or cleaner cooking fuels.
Under social protection programs, they could be given cash transfers and vouchers, or free power connections and equipment, he added.
Kyte said “all kinds of new capital” would be needed to meet the world’s energy access targets.
To that end, the Shine campaign can link the growing ranks of philanthropists and investors looking to make a social impact with in-depth evidence on how to achieve that by supplying clean energy to the poor, she said.
“We’ve been able to converge these different conversations around ‘this is the time, this is the place, we are the people’,” she added.