Energy Access Sector Comes Together for Sector Relief Fund
A note from CLASP CEO, Christine Egan
As the world battles the COVID-19 pandemic, the role of appliances in mitigating its impacts, particularly in vulnerable off-grid communities, is becoming clearer. Medical appliances are critical to run diagnostics and treat patients in health facilities. Televisions and radios enable people to stay informed and access education. Refrigerators help households preserve food and reduce trips to the market, and solar powered pumps provide water for drinking and sanitation.
Over the last seven years, CLASP has worked hand in hand with companies and innovators to build markets for high-quality and energy-efficient lights, appliances, and machinery that are used by households and businesses that lack access to grid electricity. For example, through the Global LEAP Awards program, we have worked with 101 companies to sell nearly 300,000 fans, televisions, solar water pumps, and refrigerators, providing new or enhanced energy access to 1,289,000 beneficiaries.
Now these companies are at risk as their businesses are facing severe disruptions from the current health and economic crisis.
CLASP has joined many of our partners and endorsed a letter calling on all donors, foundations and philanthropies to quickly mobilize to provide relief funding for the energy access sector—this is critical to safeguard the collective progress we have made towards sustainable, clean and reliable energy for all.
We spoke with 30 companies that sell efficient appliances and found that lockdowns and economic turmoil is impacting all aspects of their business—from inventory management to sales and distribution to customer service. Nearly a third of these companies lack the capacity to sustain their business without immediate relief, and half only have a three month cash runway, after which they would face serious trouble.
Most companies need relief funds and bridging loans to sustain operations, and the majority of these companies need grants or loans of less than $50,000.
According to Russell Sturm, Global Head, Energy Access at IFC, “The Off-Grid Solar industry has been the game-changer enabling 420 million people to access affordable, clean modern energy services for the first time. Now the viability of the industry — a critical driver for realizing universal energy access — is at risk, as COVID-19 strikes at the heart of the most vulnerable markets where energy poverty remains a brake on sustainable economic development. This is doubly concerning because distributed solar products will be essential for providing the energy needed by health clinics and hospitals as they struggle to manage the escalating demand for health services needed to deal with COVID-19.”
Resources on technical assistance, sector-wide policy interventions, consumer protection, and financial assistance for energy access companies are available on the Covid-19 Energy Access Relief Response website.