Beyond the Grid Fund for Zambia Mainstreaming offgrid

Beyond the Grid Fund for Zambia Mainstreaming off-grid electrification in sub-Saharan Africa REEEP | Martin Hiller COP 24, Katowize | 11 Dec 2018

REEEP MISSION REEEP mobilises private investment into clean energy services in low- and middle-income countries in Africa and Asia.

REEEP Founded 2002 Over 200 RE/EE projects worldwide IT and knowledge management in climate and energy Private Financing Advisory Network PFAN, jointly with UNIDO Leveraged 200 m USD investment in 2018

REEEP ACTIVITY AREAS Expanding offgrid electrification Energy in agriculture Innovative public-private financing models Market intelligence and analytics

BEYOND THE GRID FUND FOR ZAMBIA

Payments Cash & Carry or 12 to 18 months pay-back

WHY A BEYOND THE GRID FUND? 100 % At current pace: SDG 7 missed by more than 100 m households Share of SSA Households with Electricity Access: SDG 7 vs. BAU UNDER BAU: 90 % million $11 billion of HHs will have electricity access by 2030 80 % 70 % HHs will remain without access (only 20 M fewer than today). 60 % 50 % 40 % 30 % 65 % 104 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Historical Reference: Shell Foundation 2017 Business as Usual SDG 7 Met In capital required for minigrids and SHS

BEYOND THE GRID FUND FOR ZAMBIA (BGFZ) EUR 20 m Swedish Fund Electrify 1 million Zambians in rural and peri-urban areas Market Creation - injects public sector funding to overcome early structural challenges in the market Utilizes procurement tools to incentivize early-stage start-up and longer term scale-up needs of DRE enterprises Incentivizes innovation, customer rights and compliance with strict quality / standards Builds investor confidence to mobilize downstream

BGFZ: FUNDING ROUND 1 (2017 – 2021 | € 11. 5 m )

BGFZ IMPACT - 92% ABOVE TARGET – OCTOBER 2018 64, 598 ESS Contracted Actual delivery 90000 83891 80000 3. 758. 670 EUR disbursed* 70000 60000 50000 33577 30000 25292 20000 3604 10000 0 46983 43037 40000 335, 909 Zambian beneficiaries** 65437 64598 0 Start * Exchange rate as of 13. November 2018 (SEK 1 = EUR 0. 09731) ** Based on an average household size of 5. 2 people. 3246 20171 11432 13333 6492 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19

1 2 BGFZ IMPACT - FINANCE AND EMPLOYMENT Leveraged USD 21 million 26% of co-finance target Other Grant 9 7%new 5% Debt 35% third-party financiers providing finance to BGFZ ESPs, more in pipeline Equity 53% Enabled the recruitment of additional 294 people 871 new commissionbased sales agents 32% of primary customers are women

BGFZ | RESULTS-BASED FINANCE Energy Service Subscription (ESS) Provision of energy services Technology: Product technical specifications Terms of Service: Deposit, PAYG loan, repayment, tariffs, etc. Duration of Service: minimum 3 -year warranty, up-grade options Sustainability of Service: solid business model, performance Results are pre-financed based on agreed business plan and roll-out schedule Results-based monitoring at transaction level - EDISON

Energy Data & Intel System for Off-grid Networks Draft Numbers

BEYOND THE GRID FUND: 3 PILLARS Incentives and Procurement New affordable, reliable, sustainable, modern renewable energy services Market Information & Analytics EDISON and MEL provide real-time evidence and market data Platform for Market Change Off-Grid Energy Taskforce: PP forum for addressing market barriers and issues

Thank you! Martin Hiller REEEP Martin. Hiller@reeep. org