Project Context
The Economic Community of West African States (ECOWAS) has set up a private-sector
Entrepreneurship Support Facility (ESF) and Financial Support Facility (FSF) under the Regional Off-Grid
Electricity Access Project (ROGEAP). ROGEAP is financed by the World Bank, the Clean Technology Fund (CTF) and the Directorate General for International Cooperation (DGIS) of the Government of the Netherlands. ROGEAP aims to increase access to sustainable electricity services in the fifteen ECOWAS member countries and Cameroon, Chad, Mauritania, and Central African Republic. ROGEAP intends explicitly to:
- Improve access to sustainable energy by building a regional market for off-grid solar products.
- Support the various stakeholders across the value chain.
- (Support environmental, social and gender risk management for off-grid solar products.
To overcome the supply-side barriers and create an enabling environment for stand-alone solar systems, ECOWAS is setting up a private sector ESF and FSF under Component 1, a credit line for solar businesses and a contingent grant facility for CFIs under Component 2.
Project Purpose And Design
ECOWAS is the implementing agency for Component 1 with the technical assistance (TA) of a Project and Fund Manager (PFM). At the same time, the West African Development Bank (Banque OuestAfricaine de Développement, BOAD) implements Component 2.
The PFM is expected to assist ECOWAS in the practical and successful implementation of the Project’s subcomponents 1A (b), 1A (c), 1A (d), 1A (e), 1A (f) 1B, 1C, and 1D. The PFM is expected to provide financial, entrepreneurship, as well as environmental, social, health and safety risk management support to stand-alone solar energy businesses to address the affordability challenge in the target markets, as well as activities related to the development of a pipeline of projects eligible for the credit line.
Project Objectives
The PFM anticipates offering off-grid solar (OGS) SMEs support through financial, entrepreneurial, and risk management, tackling affordability issues within the specified markets. The PFM is tasked with engaging in activities associated with developing a sound portfolio of projects that meet the criteria for accessing the line of credit.
1. ADDRESSING THE OGS SUPPLY AND DEMAND SIDE
On the supply side, the project supports solar companies of different categories (start-up, early stage, growth-stage/mature) through the provision of grants to strengthen their capacities to install, maintain and provide after-sales services for high-quality solar power systems and enhance their business management and financial expertise. The project emphasises the support of women- and youth-led enterprises to improve their business skills and ability to make investment decisions. On the demand side, awareness and promotional campaigns, the promotion of quality OGS products and services for consumers, public institutions, and private users, and the introduction of innovative consumer finance models for higher uptake of OGS will be considered
2. INCENTIVES FOR CHALLENGING MARKETS
Under the ROGEAP, three (3) grant windows are made available to off-grid solar (OGS) entrepreneurs and SMEs to incentivise them in their start-up (stage 1), early-stage (stage 2) and growth/expansion stage (stage 3):
A. Matching grants (MG) are allocated to start-up (stage 1) and some early-stage (stage 2) businesses for the launching and expansion of their operations. This funding would assist these entrepreneurs develop their ideas into viable businesses or developing and test marketing their products. Each business receiving a grant would be required to provide a matching cash contribution to demonstrate commitment to the proposal.
B. Market-entry grants (MEG) support the entry of stage 2 and growth/maturity stage (stage 3) businesses into a new market deemed commercially viable but carrying first-mover risk.
C. Performance-based grants (PBG) are based on verified results achieved for stage 2 and stage 3 businesses in challenging markets, not deemed commercially viable. Potential customers have insufficient purchasing power to afford the products, and companies face higher costs due to a lack of infrastructure and the low population density of target areas. PBG allow companies to leverage the subsidies against pre-specified outcomes.
While the matching grant (MG) support start-up activities in the OGS sector; the market-entry grant (MEG) and the performance-based grant (PBG) are targeted at addressing barriers and challenges associated with infrastructure service investment in unfavourable/difficult market conditions.
Project Structure And Implementation Approach
1. PFM CORE SERVICES
ROGEAP PFM is and will be involved in the packaging and delivery of four broad categories of interrelated support services to the regional OGS market participants:
- Enabling environment and ecosystem development-related support built around awareness building, market intelligence and facilitation of stakeholders’ exchange, capacity building of CFIs to remove supply constraints for financing activities and exploring new business models to promote the use of OGS in public institutions and productive-use applications.
- Advisory and capacity-building services for OGS entrepreneurs and SMEs at the core through:
the (1) Entrepreneurship and Business Training workshop for Solar Companies (EBT Workshop),
(2) Customised Business Acceleration Support, (3) training for non-solar companies to enter the OGS sector, (4) embedded environmental, social, health and safety risk (ESHS) management support to stand-alone solar energy businesses, (5) access to finance readiness /financial education, (5) partnership with relevant services providers, including for business acceleration; as well as (6) peer-to-peer learning, business plan competition, community of champions and networking opportunities among OGS entrepreneurs and SMEs. - Grant financing OGS businesses through three grant windows to support challenges associated with starting up a business in the OGS market as well as address the viability gap and the relatively large upfront investment requirements related to starting up and operating OGS operations in challenging national markets.
- Capacitation of CFI to deliver efficient and scalable financial services to the regional OGS market participan
2. PFM IMPLEMENTATION APPROACH
The project planning has involved several preliminary technical meetings, including the kick-off meeting in Abuja, various meetings with the ECOWAS PIU, and the Praia Steering Committee meeting with the World Bank, the PIU, and the PFM to clarify project objectives and expectations with the client, ECOWAS, and the financing partner, the World Bank on its own and on behalf of the CTF and the DGIS.
The project implementation is being guided by the Project Operational Manual (POM) and the refined Grant Operations Guidelines (GOG), which will be approved by the client with no objection from the World Bank. The preliminary meetings ascertained and validated several assumptions made for consideration in the review. The project will be implemented per its multiple components, illustrated in the figure below.
For subcomponent 1A, the PFM, in collaboration with ECOWAS PIU, BOAD PIU, ECREEE and the World Bank, will pursue ways for facilitating sustainable approaches and exit strategies for technical assistance (TA) and funding activities, identify and build the capacity of the demand side (critical demand), supplyside (to be available, affordable, and sustainable), financial institutions (to be able to finance both sides), and regulatory bodies to incentivise the uptake of stand-alone solar products.
For subcomponent 1B, the Entrepreneurship and Business Training for Solar Companies (EBT) serves as a core element of the provision of the advisory and training services of the PFM to support stage 1 and 2 businesses to launch and expand operations and increase the share of quality stand-alone solar products in the market.
The guidelines for grant operations under subcomponents 1C and 1D seek to define how the matching, market-entry, and performance-based grant facilities within ROGEAP should operate, including broadly defined eligibility criteria, evaluation/selection process, disbursements, other rules applying to the provision and use of the grant funds, and monitoring and evaluation. ROGEAP considers non-solar companies for stage 3 that meet full-time employment and revenue
criteria
3. THE PROGRESS
The Financial Support Facility (FSF) under the Regional Off-Grid Electricity Access Project (ROGEAP) is financed by the World Bank, the Clean Technology Fund (CTF) and the Directorate General for to increase access to stand-alone solar power services in the fifteen ECOWAS Member states countries and Cameroon, Chad, Mauritania, and Central African Republic.
A total of 13 countries are eligible for financial support under the sub-components: Benin, Burkina Faso, Cameroon, Chad, Côte d’Ivoire, Gambia, Ghana, Liberia, Mali, Mauritania, Niger, Nigeria, and Sierra Leone. The eligible countries per funding source are:
– Benin, Burkina Faso, Cameroon, Côte d’Ivoire, Gambia, Ghana, Liberia, Mali, Niger, Nigeria, and Sierra Leone for CTF grants, and;
– Burkina Faso, Chad, Mali, Mauritania, and Niger for DGIS grants
The Pilot ROGEAP grant proposal application process commenced with the expression of interest on 14th November and ended 28th November 2023 and covered 6 countries (Burkina Faso, Côte d’Ivoire, Ghana, Mali, Mauritania and Nigeria). A total of 1,373 attempted applicants hit the portal.
The Investment committee has recommended a total of 32 OGS companies and SMEs for award with 9 SMEs being led by women (28.12%).
- Burkina Faso: MG (1), MEG (1) and PBG (4)
- Côte d’Ivoire: MG (0), MEG (0) and PBG (1)
- Ghana: MG (1), MEG (2) and PBG (0)
- Mali: MG (1), MEG (8) and PBG (1)
- Mauritania: MG (0), MEG (2) and PBG (1)
- Nigeria: MG (8), MEG (2) and PBG (0)
The Second ROGEAP Grant Call
The second ROGEAP GRANT shall be made to the 13 eligible countries in equal dimension, (the following countries are eligible for this 2 nd ROGEAP Grant call. 1. Côte d’Ivoire, 2. Benin, 3. Mali, 4. Burkina Faso, 5. Niger, 6. Ghana, 7. Nigeria, 8. Mauritania, 9. Cameroon, 10. Chad, 11. The Gambia, 12. Sierra Leone, 13. Liberia.) This is so in order to maximize the outreach and impact generated by the PFM within the first year.
a) The Step and process of the Second grant call
The Following are the planning and process steps towards and during the second grant call. Having learnt lessons from the pilot call, some of the dates and periods may be adjusted prior or during the process.
b) Special request
An application request hereby made, to permit, authorise and approve the Key Experts evaluating both the EOI and the full proposals to working including weekends, (Saturday and Sunday) for the period of the two Lots. This will not only as being considered to speed up the process but fast track the series of events following the grant call process. Approval of this Concept without deleting this clause is considered, clause approved.