This report summarises the findings of the Smart Villages Initiative’s workshop on business and financial models held in Cambridge in January 2016. The workshop brought together 36 participants from academia, the private sector, NGOs, and the public sector to share their perspectives and experiences concerning business and financial models for home-based electricity services and decentralised mini-grids. Findings from the workshop will be incorporated into the Smart Villages Initiative’s technical reports on business and financial models and recommendations shared with policymakers at national, regional, and international forums.
Participants from the private sector and NGOs discussed the successes of their business models in helping provide access to modern energy to remote, off-grid communities and the consequent socio-economic benefits that materialise. They also addressed the financial, logistical, and political barriers that must be overcome to achieve further scale and growth. Investors noted that there is a view that off-grid technologies represent an energy revolution in developing countries. In order for this to happen, significant debt-financed investment is required for what, despite the success of pioneer firms, are currently often considered unbankable business models. Representatives from the public sector and donor community explained their role in promoting innovation and facilitating market-based approaches, reducing risks and reaching the base of the pyramid, working with intermediaries, engaging with governments, and building the evidence base.
Discussion among participants highlighted three main points: that the entire range of technologies, business models and financing vehicles must be harnessed so that every customer and income bracket can be reached; the need for all stakeholders to work together and for government to play a coordinating role; and the recognition that energy is a means and not an end, and that a holistic vision of success can turn the energy access issue to being seen as an opportunity rather than a challenge.