World Bank launches market-driven initiative to "light up" Africa

6 September 2007

The Bank's new "Lighting Africa" program, which was launched this week, seeks to catalyze business interest in developing innovative ways to bring light to millions of Africans who are not connected to the electricity grid. While the attention to off-grid and non-fossil fuel based electricity supply in Africa is welcome, it remains questionable whether the private sector can meet the Bank's goal of delivering affordable lighting to 250 million people on the continent by 2030.

According to the World Bank, over 500 million people in sub-Saharan Africa lack access to modern energy supply today. Rural electrification rates are as low as 2% in some countries.

The proponents of "Lighting Africa" claim that fuel-based lighting is both inefficient and expensive, costing Africans $17 billion every year. This makes cheaper, less environmentally damaging technologies a very attractive alternative. But the environmental benefits of cutting down on kerosene lamps and the development gains from allowing youth to study longer or businesses to stay open later at night aren't the only reasons this initiative is sparking interest. Financiers and investors are eager to tap into what they perceive to be a potentially lucrative rural lighting market on the continent.

This week, the Bank and the IFC, the private sector financing arm of the World Bank Group, opened "a competition for the design and delivery of low cost, high quality, non-fossil fuel-based lighting products targeting low income consumers in Sub-Saharan Africa." Proposals for off-grid lighting products and services (which must be submitted in English), will compete for grants of up to $200,000. In addition to this "Development Marketplace" competition, the initiative will also support initial market research in a select set of Anglophone African countries and facilitate business-to-business information exchange.

The initiative promotes the use of clean, lower-cost, durable lighting technologies such as light emitting diodes (LEDs). Reading recent articles, one might believe that new LEDs represent a panacea for Africa's electricity woes. Some forms of low-watt LED devices can be manually recharged, and thus don't require any access to an electric power source. To date, however, most LED technology remains expensive, so there is no guarantee yet that newer devices will be affordable for average residents in sub-Saharan Africa. Supporters are still hopeful that LED and other types of innovative lighting technology will allow African countries to "leap-frog" in the electricity sector, the way cellular telephones have enabled rapid expansion of the communication network.

Many would agree that the idea is an attractive one, at least in principle. And the increased attention to meeting the needs of average Africans, the majority of whom are without access to reliable electricity sources, is likely to be welcomed by the Bank's supporters and critics, alike. But the $2.5 million that the Development Marketplace plans to award to winning proposals pales in comparison to the magnitude of Bank Group investment in large-scale, grid-based energy infrastructure, such as fossil fuel plants and large dams.

This new initiative should be both welcomed and watched. Its emphasis on smaller scale energy projects should serve as a reminder of the urgent need to rethink the Bank's energy investments overall. What kinds of energy infrastructure are most appropriate to meet the demands of a rapidly growing population in a warming world?

Resources

Read more about the initiative on the Lighting Africa website