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Financing for Impact: Providing Affordable and Sustainable Energy Solutions in Ethiopia

With CLASP's financing support, Green Scene Energy is able to extend affordability and accessibility to solar water pumps for off-grid communities in Ethiopia.

Lisa Kahuthu

Rain-fed agriculture is a fundamental pillar of the Ethiopian economy. In 2022, agriculture employed about 80% percent of the country’s workforce and contributed nearly 38% to gross domestic product (GDP).1 However, persistent droughts have posed significant challenges to farmers’ livelihoods and reduced food yields.

Off-grid irrigation as a solution

Solar water pumps are a sustainable, off-grid solution to improve small-scale irrigation, strengthen community resilience, and support sustainable economic growth. Powered by the sun, solar water pumps also reduce the use of fossil fuels, so they are less harmful to the climate. Rekik Bekele is the founder and CEO of Green Scene Energy, a thriving solar appliance distributor. Green Scene recently received business support through CLASP’s Productive Use Financing Facility to increase its supply of affordable solar water pumps.

Providing Affordable and Sustainable Energy Solutions in Ethiopia

Founded by Rekik Bekele in 2016, Green Scene Energy provides affordable, high-quality solar energy products in off-grid areas of Ethiopia. Green Scene began by specializing in solar home lighting systems, later expanding its portfolio to include solar mini-grid, commercial and industrial solar engineering, procurement and construction (EPC) solutions for off-grid projects.

In 2022, in response to the growing need for irrigation pumping in rural areas across Ethiopia, Green Scene began distributing solar-powered water pumps. To date, the company has successfully positioned itself as a market leader in the provision of affordable solar water pumping systems.

Credit: Green Scene Energy

Financial support catalyzing progress

Despite a growing demand for solar water pumps, the substantial upfront capital required exposes significant challenges. According to Rekik, CLASP’s Productive Use Financing Facility has been instrumental in allowing Green Scene to continue selling solar water pumps in 2023. “We had been seeking investment for some time; by the end of 2022, we were only importing small numbers of pumps at a time, using existing sales revenue,” observed Rekik.

“Green Scene’s expanded capacity to make larger, more efficient orders, is allowing us to reach many more end users. Response to the introduction of the pumps is incredibly positive. The farmers are pleased with the improvements.”

Appliances with a transformative potential

Efficient productive use appliances (PUAs), like solar water pumps, refrigerators, and milling machines, have transformative effects on local communities, small businesses, and the environment. However, despite their potential for income generation, PUA sales remain remarkably low in emerging markets due to their relatively high upfront costs and a lack of access to finance. CLASP’s innovative financing facility addresses these challenges by helping distribution companies like Green Scene sell their products at lower prices.

Multifaceted support

The Facility’s support to Green Scene is multifaceted. Subsidies to lower product prices are easing import constraints, while increased performance testing verifies product quality. A capacity-building grant is also helping with a variety of one-off costs and purchases associated with introducing new product lines.

“The funding has assisted Green Scene in selling over 50 solar water pumps,” adds Rekik. “We expect to sell at least another 250 during the upcoming months.”

According to Rekik, demand is leading Green Scene away from the sole retail of solar lighting, toward a greater focus on solar-powered productive-use appliances (PUAs). She attributes this strategic transition to the considerable success achieved with solar water pumps and a recognition of the tremendous potential within the PUA market.

Assisting customers to access finance

In addition to expanding and diversifying its portfolio, Green Scene Energy has also leveraged the Facility’s support to unlock consumer financing for solar water pumps. Rekik and her colleagues have been working closely with an Ethiopian bank to design the bank’s first-ever consumer loan product for solar water pumps.

“Previously, the Bank had provided loans for solar lighting to consumers through Micro-Finance Institutions (MFI),” explains Rekik. “However, solar water pumps have become more expensive and technologically complex. For the first time, the MFIs are now offering collateral-free loans for solar water pumps.”

According to Rekik, CLASP’s financing has been critical for Green Scene because it is in a scale-up stage. They have been able to use the funding to gain confidence and trust in their business, which has in turn facilitated the securing of additional private financing.

 

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About The Productive Use Financing Facility

CLASP is proud to be coordinating the Productive Use Financing Facility, supported by The Global Energy Alliance for People and Planet (GEAPP). By supporting businesses like Green Scene Energy, CLASP ensures more transformative appliances are made accessible to those who need them the most. Learn more about the Facility.

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