Dangerously insufficient: COVID-19 Energy Access Relief Fund

Harald Schützeichel

The idea of a relief fund for off-grid companies is in principle a good and important step, but if you look at the criteria for participating companies you will soon realize that the one now published by GOGLA is certainly not a Relief Fund for the whole industry. Its mainly a business facilitation package for well-off and well-connected foreign based companies.

The Fund in its current form is dangerous for the off-grid industry as a whole because it carries out an ominous selection among the off-grid companies: Only the healthy are supported, companies “with pre-existing diseases” are left to their fate. This is certainly not a Relief Fund for COVID-19 victims, but it is a relief fund to secure the capital of international investors. From the point of view of the investors involved in the fund, such as Persistent Energy or Responsability, this is a legitimate idea, but it should be clearly identified as such. As a COVID-19 Relief Fund for the entire off-grid industry, the fund is in any case not suitable and raises false expectations.

The Fund is likely to widen the existing gap between international and local companies because the special needs of local SMEs are not addressed. If it remains the only instrument the Relief Fund definitely will have negative impacts for the off-grid industry as a whole.

In order not to cause any damage in the off-grid sector, this Relief Fund urgently needs to be supplemented, especially to address the needs of all the small-sized solar companies in the off-grid sector (which often have “pre-existing conditions”). But they form the foundation of our sector and they need other support than this Relief Fund offers.

As it seems that the wishes and needs of local SMEs are not sufficiently known, Sun-Connect will publish the results of a survey among East African solar companies on Wednesday (29.04.). The results can be the basis for a further Relief Fund.

Article updated 28.04.2020.

 


 

 

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