Power Africa: Beyond the Grid Fund for Zambia

The Power Africa: Beyond the Grid Fund for Zambia (BGFZ) is an ambitious multi-year program aiming to increase energy access, improve livelihoods and catalyse economic activity in rural and peri-urban areas. The BGFZ aims to bring modern energy services to at least 167,000 households – translating to one million Zambians – by 2021.

The core of the BGFZ is a EUR 20m results-based “social impact procurement” fund. Unlike a challenge fund or other traditional concessional financing, the BGFZ operates rather like a traditional public procurement – following strict guidelines on eligibility and tender from potential awardees, and enforcing deployment and delivery schedules.

The major difference between the BGFZ and a traditional procurement lies in what we are procuring, and in how our we evaluate, investigate, monitor and verify our projects. Rather than a distinct physical asset or service, the BGFZ is procuring social impact: the provision of energy services for Zambian consumers. The programme is not buying the energy services on behalf of customers; rather the fund closes the “viability gap”, on a per-connection basis, incentivising rollout and scaling up in areas that would – in the absence of the BGFZ – not represent viable markets for companies.

To ensure that these energy services meet the needs of the Zambian market and Zambian consumers, we have developed a series of criteria defining Energy Service Subscriptions – or ESS – of various types (scroll down for more on ESS and the ESS Tier System).

Because delivery of energy services at scale will take time, REEEP puts special emphasis on evaluating and testing the capabilities, track records, and business plans of bidders, so as to minimise the risk of failures throughout the programme period. REEEP monitors each Awardee closely throughout the programme lifecycle, and tracking the deployment of every single ESS electronically to ensure compliance with the procurement.

BGFZ will contribute to the Government of Zambia’s rural energy access goals through an innovative public partnership approach, which aims to bring electricity to 1 million Zambians by 2021, while supporting the long- term growth of sustainable energy markets in the country.