Digitalization for Energy Access in Sub-Saharan Africa : Challenges, Opportunities and Potential Business Models

Abstract

Innovative business models supported by digital technologies, together with the widening connectivity and data collection, are already giving a big contribution in fostering the access to electricity and clean cooking in Sub-Saharan Africa. This paper gives an overview on the actual state of energy access in Sub-Saharan Africa and the current technologies used to provide it, followed by a description of the key trends and drivers of the ongoing African digital transformation. A deep analysis of the Pay-as-you-go business model in the off-grid solar sector will shed light on how this transformation started some years ago and the way it is affecting society in many ways. Strengths and opportunities-as well as weaknesses and risks of the model-are provided through a screening of the most representative business experiences in East and West Africa, financial aspects and market analysis. The perspective of both companies and endusers have been considered here. The last section gives recommendations to policy-makers on how to ride the wave of digitalization to foster the access to clean and reliable energy, by acting on the electrification planning, regulations, business environment, distribution channels and mobile money environment.

Solar home systems adoption in Sub-Saharan African countries: Household economic and environmental benefits assessment

“…Several solar business companies offering the PAYGo payment plan for SHS kits are currently operating in different countries in the SSA region, with the highest concentration reported in the East African countries [3,5,6]. From 2012 to 2017, the PAYGo businesses raised about $ 773 million investment funds, equal to about 85% of all the funds raised by off-grid systems sector, an indication that investors have aggressive expectations in the growth of the PAYGo companies [4,5]. Recent reports indicate that PAYGo payment plan accounted for about 24% of the global sales of off-grid solar PV systems and particularly recorded tremendous increase in sales in SSA countries such as Kenya, Burkina Faso, Cote D'Ivoire, Rwanda, Senegal, Tanzania, and Togo in 2019 [3,6].…”

The role of residential air circulation and cooling demand for electrification planning: Implications of climate change in sub-Saharan Africa

“…Our findings should not be interpreted as arguing against decentralised energy access systems; to the contrary, these systems have the major advantage of allowing for minimum levels of electricity access at relatively lower pricesand chiefly in areas where the grid extension would require very large investments. In fact, decentralised systems are only growing in relevance and potential thanks to emerging, innovative business models and technological advances (Mazzoni, 2019) that can abate upfront cost barriers. Energy-ladder (Chattopadhyay et al, 2015) and energy-development nexus theories (Riva et al, 2018) argue that basic energy access can provide the spark to initiate socio-economic development, and allow households to "climb the ladder" towards more robust energy supply systems.…”

Satellite Observations Reveal Inequalities in the Progress and Effectiveness of Recent Electrification in Sub-Saharan Africa

“…Overcoming these barriers requires smart payment schemes and innovative business models. 100 Challenges in extending central grid infrastructure to remote regions have resulted in an increasing market penetration of decentralized energy solutions that are forecast to be the least-cost option to bring electricity to households currently without access in many locations across the continent. 84,101,102 Care is required in the sizing of such distributed solutions because if underscaled, they may be insufficient to meet growing demand from different sectors and thus exacerbate inequalities, while an oversizing could make the system economically unsustainable for both users and the companies managing the infrastructure.…”