Design of the Smart Outcomes Component – Clean Energy and Energy Inclusion for Africa Foundation



Contract partner: Stichting Clean Energy and Energy Inclusion for Africa (CEI Africa) Country: Afrika, regional/länderübergreifend Funding amount: € 85.366,00 Project start: 14.02.2022 End: 31.07.2022

Short Description:

Overall goal


The foundation Clean Energy and Energy Inclusion for Africa (CEI Africa) aims to support the growth of renewable energy solutions in the energy access sector in Sub Saharan Africa by delivering a variety of debt, equity and risk mitigation instruments in combination with Results Based Financing (RBF) grants. By funding providers of rural electrification methods like Green Mini Grids (GMG) and Solar Home Systems (SHS) as well as a productive use of electricity (PUE) through Social Impact Incentives (SIINC), CEI Africa targets a social and economic development and creates opportunities for “Bottom of the Pyramid” BoP customers and the communities involved.

The goal of the initial phase is reached, when the Smart Outcomes component is designed and ready to be implemented.


Expected results


RBF is a grant-giving mechanism that places the bonus of achieving the result on the beneficiary; the grant provider runs little to no risk because nothing is paid unless results have been achieved and verified. The Social Impact Incentive model is a form of RBF that focuses more on incentivizing service providers to improve the economic or physical impact that the product or service has on consumers or consumer’s communities. It is focused on outcome and therefore has greater leverage than traditional RBF, which is solely outputs-based. In particular, the adoption of PUE can have far-reaching impacts, such as increased incomes, gender economic inclusion, job creation, and improved health care. In addition, the Social Outcomes component will help meet energy needs in rural Africa.


Target group / Beneficiaries


During the initial phase the Smart Outcomes component is focused on the GMG sector and on supporting GMG developers. Beneficiaries are also African SMEs that depend on the additional energy delivered by the renewable energy solutions. Furthermore, the Smart Outcomes component is designed to contribute to the economic empowerment of woman.

CEI Africa will operate in Sub-Saharan Africa. Specific countries and regions will be decided in the initial design phase.


Activities


This initial phase includes the design and development of the following aspects:

- Define general parameters of the SIINC.

- Consultation and validations by important stakeholders to collect inputs.

- Define discrete objectives that are specific, achievable and measurable and that are indicative for positive social and economic changes. The objectives selected should ideally represent win-win situations for the community as well as the energy providers.

- Fixing allocations by determining concrete PUE technologies objectives and calculating the paid bonuses with the help of a point system.

- Select SMART indicators to quantify the Smart Outcomes objectives. Therefore, data will be colleted first.

- Structure the Facility.

- Building and selecting of useful pipelines.

- Fitting the Smart Outcomes component into the overall CEI Operations Manual and addressing the required operations details.

- Design a monitoring and evaluation protocol to isolate the impacts particulary attributed to the Smart Outcomes component and funding.

- Budgeting and preparing an Implementation Schedule.


Context


Under the Energizing Development (EnDev) program in Kenya, the companies Roots of Impact and 60 decibels are piloting a full SIINC model where the payout of the RBF is directly linked to measured outcomes. The observations of this study, though based on only preliminary results, provide a good framework for areas of focus and improvement in design of the Smart Outcomes component of CEI Africa. The Foundation Management Consortium members are particularly aligned on testing the idea of a hybrid program to provide some amount of up-front grant funding with the larger share disbursed upon achieving SIINC outcomes which could help to de-risk some of the companies with regards to expectation on income from the grants and how to model their cash flow.

project number 2735-01/2022
source of funding OEZA
sector Banken und Finanzwesen
tied
modality Project-type interventions
marker Environment: 2, Climate change mitigation: 2
  • Policy marker: are used to identify, assess and facilitate the monitoring of activities in support of policy objectives concerning gender equality, aid to environment, participatory development/good governance, trade development and reproductive, maternal, newborn and child health. Activities targeting the objectives of the Rio Conventions include the identification of biodiversity, climate change mitigation, climate change adaptation, and desertification.
    • 1= policy is a significant objective of the activity
    • 2= policy is the principal objective of the activity
  • Donor/ source of funding: The ADA is not only implementing projects and programmes of the Austrian Development Cooperation , but also projects funded from other sources and donors such as
    • AKF - Foreign Disaster Fund of the Austrian federal government
    • BMLFUW - Federal Ministry for Agriculture, Forestry, Environment and Water
    • EU - Funds of the European Commission
    • Others - various other donors are listed in ADA’s annual business report.
  • Type of Aid – Aid modalities: classifies transfers from the donor to the first recipient of funds such as budget support, core contributions and pooled programmes and funds to CSOs and multilateral organisations, project-type interventions, experts and other technical assistance, scholarships and student costs in donor countries, debt relief, administrative costs and other in-donor expenditures.
  • Purpose/ sector code: classifies the specific area of the recipient’s economic or social structure, funded by a bilateral contribution.
  • Tied/Untied: Untied aid is defined as loans and grants whose proceeds are fully and freely available to finance procurement from all OECD countries and substantially all developing countries. Transactions are considered tied unless the donor has, at the time of the aid offer, clearly specified a range of countries eligible for procurement which meets the tests for “untied” aid.
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