Supporting sustainable energy markets: More critical than ever in the face of COVID-19
SNV joins the world community in fighting the impacts of the coronavirus disease (COVID-19). The poorest countries and the millions of people who are living in extreme poverty without access to energy face even greater risks now. More than ever, we need to ensure that our interventions leave no one behind.
Interventions to provide and improve access to energy are an important component of an effective COVID-19 response. Not only is energy critical in powering health clinics and appliances needed to treat patients, it allows people to communicate (by powering cell phones, radio and TV), to stay informed on preventive measures and minimise the spread of the virus. Lighting and power allow people to cope with stay-at-home measures, and to increase the resilience of communities, e.g. in ensuring food security by powering agriculture. Clean cooking reduces risks of respiratory viral infections (like COVID-19) by reducing indoor air pollution, and lowers the burden of collecting and using fuel wood, especially for women whose care duties increase due to the pandemic.
SNV remains fully operational with energy access interventions in 17 countries across Asia, Africa and Central America. Our in-country teams have shifted to business continuity mode, and have a good view on how the crisis is developing so we can customise our responses.
Our short-term response
In the short term, SNV has adapted its existing and ongoing programmes, which provide sufficient flexibility for tailored responses to COVID-19. In our work with decentralised energy businesses, Technical Assistance (TA) is provided supporting companies to continue operations and to adjust their business and marketing strategies, with a particular focus on vulnerable communities. Local enterprises engaged in production, distribution and sales of off-grid energy products generally do not have access to other TA facilities. For example, SNV provides training for local cookstoves producers on COVID-19 preventative measures (hand washing, social distancing, etc.) that allow them and their distributors to continue doing business as much as possible.
Financial support mechanisms are adapted as well, until the extent possible. For example, in the Results Based Financing (RBF) facility for off-grid solar in Tanzania, an emergency clause was activated which allows for a 20% increase of RBF incentive levels for all sales claims submitted by companies since the pandemic started. This effectively increases subsidies for sales of off-grid solar products, providing an additional buffer for companies struggling to survive the current crisis. The BRILHO Call for Proposals which is now open in Mozambique, allows participating companies to request a higher level of pre-finance (milestone based funding) compared to RBF. This allows companies offering clean cooking solutions, solar home systems and mini-grids, to better deal with the current situation, and to continue delivering energy access to those who need it most.
Moving forward, while continuing our existing interventions in the energy sector as a critical element in addressing the COVID-19 crisis, implications of the current pandemic will inform proactive COVID-19 responses. Possible intervention areas include:
- Consumer financing: With production, employment and income being affected by the crisis, capacity to pay for energy access is becoming an increasing challenge for households and small businesses, particularly in vulnerable areas. Building on our experience in managing early stage grants and RBF facilities, as well as prior experience in consumer financing, SNV will engage more in this area to ‘keep the lights on’ and ensure continuity at the demand side of decentralised energy markets.
- Powering health: Health clinics in off-grid areas will need power in order to operate and treat patients. Also, reducing household air pollution by promoting clean cooking reduces health impacts of COVID-19 and other illnesses. RBF incentives can be directed to businesses to stimulate dissemination of clean cooking solutions, to power health centres and/or to deliver particular appliances (cooling units, ventilators, other). Health considerations are also expected to get more attention in our Behavioural Change Communication (BCC) work.
- Powering agriculture: The current pandemic has a significant impact on the economic situation and food security in the countries in which we operate. Productive use of energy is expected to become increasingly important in our work, particularly in relation to agriculture. Bio-slurry resulting from bio-digesters is a potent organic fertiliser contributing to increased agricultural production and reduced use of chemical fertiliser. Solar powered irrigation, cooling and drying, amongst other renewable energy solutions, can contribute to reliable and stable local food supplies, and to people’s resilience to the effects of the current pandemic.