Posted on 08/04/2020 14:36:11
What we're doing and why
Events are cancelled, flights have been grounded, businesses have shut their doors, but still many people continue to work, often in a very different way than usual, and many businesses are just getting on with it in the best way they can in order to continue providing the services that people need.
The Energise Africa team are among those continuing to work from home and we thought this was a good time to let people know more about what we’ve been doing, why we’re doing it all and what effects we think the Coronavirus crisis will have on the business.
The problem persists
Even though many of us are still likely to be feeling a little shocked and upset at the moment, there is probably a long list of things we have to be grateful for: perhaps it’s family, a garden or a hobby that we’re now seeing as a blessing. But what about electricity?
You might not have considered it, but having access to reliable power means so much, especially at a time like this. Just think how you would cope without your TV, phones, lights, tablets, fridge or kettle?
But for around 130 million families (640 million people) in sub-Saharan Africa, this continues to be the case and this is one of the key reasons that Energise Africa is continuing to operate during this time of crisis. We remain 100% committed to helping more people in the UK use their money to help off-grid solar businesses to access the up-front finance they need to supply thousands of homes with pay as you go home solar systems.
Adjusting to a changing landscape
However, we are also very aware that things continue to change and evolve almost on a day-to-day basis with the solar businesses that have raised finance via Energise Africa and their operations across the continent.
So we need to continue in a flexible way with our focus over the short to medium term to not only collaborate and work closely to support the solar businesses during these challenging times with the finance they need to continue to provide affordable solar energy for families and businesses, but while carefully balancing this with protecting the needs of the everyday people who invest via our platform.
Here’s a snapshot of what we’re currently doing:
- We’re continuing to work remotely, so the team is still on hand to deal with any enquiries and day-to-day workflow.
- We’re also actively working to build a clear picture of the potential impact the pandemic will have on solar pay-as-you-go (PAYG) businesses across the 13 African countries where our partner businesses operate, with support from our partner E4I, including potential interruptions in the supply chains, the effect of a lockdown on mobile payments, issues for sales cycles and the risks for staff. As this picture emerges, we will keep you updated.
- As we are an ethically-minded lender, we are keen to explore any options that will help the solar businesses continue to operate, while balancing any increased risk to investors. To this effect, we have introduced some temporary measures. These include capping funding raises for existing solar businesses at their current exposure, additional assessments of each business who asks to raise funds via the platform and introducing a 12-month grace period for principal and interest repayments, so the first payment will not be due for 12 months, instead of the usual 6.
Things are changing but some things stay the same
But, importantly, we WILL still be offering investors solar bonds and these will carry a marginally higher rate of interest than usual and a clear message to investors about the increased uncertainty in the market.
It’s important for us to continue to offer these investments as we firmly believe that the businesses providing PAYG solar are key to helping rural African communities develop, grow and rebuild and that they will be even more necessary in the wake of the Coronavirus crisis.
And it isn’t just the benefits to families in rural areas of Africa that drives us, but the potential for off-grid solar energy access to help us achieve the UN SDGs, something that we must continue to focus on in a post- COVID 19 world.
The best solution
Solar energy is the best choice for millions of African families who are currently living off-grid, bringing them a clean, affordable and reliable supply of electricity that will enable them to ditch greenhouse gas-emitting fuels, help them improve education, health and boosts local economies.
Although no one can predict what the post-COVID 19 world will look like, we know for sure that the threat of climate change will still be a reality and the role PAYG solar businesses play in providing thousands of homes with clean energy access will continue to be vital.
So in order to ensure these vital businesses successfully weather the Coronavirus storm, it’s important that we continue to provide them with ongoing access to cash for liquidity purposes. This is also why other institutional investors active in this sector are rapidly working to deploy a $100 million relief fund to also provide a liquidity buffer for solar businesses to access soft loans to support operations in emerging markets.
Like many businesses all across the world, there’s no doubt that solar businesses with good underlying business models will also face varying challenges as a result of COVID 19. However, safeguarding all the progress that has been made with regards to the UN’s Sustainable Development Goal 7 (SDG) is absolutely essential so that once we’re out of the other side of the pandemic, economies in Africa can get back on track in a sustainable and climate-friendly way.
That’s why Energise Africa and other key stakeholders across the solar energy sector are working hard to put measures in place to help them successfully navigate these short to medium-term challenges
A positive outlook
Here at Energise Africa, we remain positive and optimistic - even in the face of this global crisis - that we can continue to help UK investors make a big difference to lives in Africa, where their help may be needed now more than ever and by doing so, together we can help solve some of the biggest problems we will still be facing at the other side of the outbreak.
Our investors, partners and supporters are incredibly important to us and we hope that you all remain safe and healthy at this time. We want to thank you for your continued support and assure you that we remain open and available to answer any questions you might have during this time.