A very enlightening perspective that I have never really considered. I am especially interested when you talk about reducing the cost of clean energy, i think this is an area that will have great impact & ofcourse increasing access to electricity to poor communities is critical to any other interventions that the ngo community might want to embark in a particular community.
Excellent note. Far too often, the environmental movement seems to callously ignore the potential impacts of the single-faceted solutions it proposes on those struggling to escape poverty. The science is settled - the earth has warmed. The science is unsettled - how much of that warming is due to fossil fuels. There is a good economic and social case to be made that those of us fortunate enough to live in the developed world ought to use energy more wisely. There is an even better case that those not so fortunate should have assured access to energy 24/7 - and you have done a great job of starting to make that case.
It is time to reconize that energy by itself must be supported if we have to consolídate advances in health, education, poverty fight, women empowerment, agriculture, and so on.
If finance depends on environmental funds, the decisions will be directed to maximize Gas emisions reduction and off grid rural electrification for the poorest people will not be the priority.
I particularly liked this article’s association of electrical energy with the primary human needs. The association of high impact philanthropy for direct social investments particularly in the developing world hits home for me because I am from Kenya and some of the experiences you described of living in a world without power are fresh memories rather than distant imaginations.
There are two things I’d like to add on energy philanthropy.
It is my opinion that a robust increase in social impact ventures from this perspective would have to be tied to some form of early stage profit driven mechanisms. Your analysis of the different catalytic platforms that philanthropy can be applied to increase access to electricity omitted direct investments. See innovation and policy are great but many sub Saharan African economies already have modernized energy laws and national policies. What we don’t have are enough power stations to generate the electricity we need and smart reliable grids to transmit the electricity generated to communities that need it. This is the background for my first point. Simply stated we need long term cheap debt to finance these projects.
Commercial institutions can only offer relatively short term ( typically 7 - 9 year debt) at interest rates priced typically at 7% + LIBOR. This restricts a very small private sector involvement in energy generation which then creates a plausible argument that in these regions energy generation and distribution will continue to be a function of governments (which honestly are better of spending the money on health, security and education).
Philanthropy need not be a revolving circus of high net-worth investors continually reaching into their cheque books to right checks to meet crisis after crisis. Philanthropy channeled to funds that would issue concessionary loans to private developers in Africa to develop projects and build grid infrastructure would not only mobilize a very rapid energy generation platform but also create revenue for support of other financial products so badly needed in this part of the world.
There is a golden thread that is visible in all transformations that have had high impact and success in Africa. 1. They are private sector lead. 2. They increase service access to poor and rural communities. 3. The service use is judicious as they are tied to small profits on large volumes of sales or access to service.
We need philanthropy to provide a platform for an easier entry to business rather than a blank cheque for increased electricty access.
The second point is that the third world needs increased funding for technical universities. We need the scientists and engineers to build and innovate the power plants of the future and unfortunately the local capacity in this region is few and far between. I look with great admiration of India which has risen through its own intellectual capacity to build and export not only electricity as a commodity but also the machinery needed to generate electricity.
What philanthropy can most do for energy is to avail low cost finance to increase electricity generation and access and increase the technical capacity by building the schools and universities needed to develop the engineers, financiers and project managers that the energy sector needs.
COMMENTS
BY Hulk Joshua
ON April 18, 2015 08:51 PM
A very enlightening perspective that I have never really considered. I am especially interested when you talk about reducing the cost of clean energy, i think this is an area that will have great impact & ofcourse increasing access to electricity to poor communities is critical to any other interventions that the ngo community might want to embark in a particular community.
BY M JOHN PLODINEC
ON April 19, 2015 06:41 AM
Excellent note. Far too often, the environmental movement seems to callously ignore the potential impacts of the single-faceted solutions it proposes on those struggling to escape poverty. The science is settled - the earth has warmed. The science is unsettled - how much of that warming is due to fossil fuels. There is a good economic and social case to be made that those of us fortunate enough to live in the developed world ought to use energy more wisely. There is an even better case that those not so fortunate should have assured access to energy 24/7 - and you have done a great job of starting to make that case.
BY Julio Eisman
ON May 13, 2015 03:46 PM
It is time to reconize that energy by itself must be supported if we have to consolídate advances in health, education, poverty fight, women empowerment, agriculture, and so on.
If finance depends on environmental funds, the decisions will be directed to maximize Gas emisions reduction and off grid rural electrification for the poorest people will not be the priority.
BY Nathan Peter Maina Gachugi
ON May 18, 2015 06:16 AM
I particularly liked this article’s association of electrical energy with the primary human needs. The association of high impact philanthropy for direct social investments particularly in the developing world hits home for me because I am from Kenya and some of the experiences you described of living in a world without power are fresh memories rather than distant imaginations.
There are two things I’d like to add on energy philanthropy.
It is my opinion that a robust increase in social impact ventures from this perspective would have to be tied to some form of early stage profit driven mechanisms. Your analysis of the different catalytic platforms that philanthropy can be applied to increase access to electricity omitted direct investments. See innovation and policy are great but many sub Saharan African economies already have modernized energy laws and national policies. What we don’t have are enough power stations to generate the electricity we need and smart reliable grids to transmit the electricity generated to communities that need it. This is the background for my first point. Simply stated we need long term cheap debt to finance these projects.
Commercial institutions can only offer relatively short term ( typically 7 - 9 year debt) at interest rates priced typically at 7% + LIBOR. This restricts a very small private sector involvement in energy generation which then creates a plausible argument that in these regions energy generation and distribution will continue to be a function of governments (which honestly are better of spending the money on health, security and education).
Philanthropy need not be a revolving circus of high net-worth investors continually reaching into their cheque books to right checks to meet crisis after crisis. Philanthropy channeled to funds that would issue concessionary loans to private developers in Africa to develop projects and build grid infrastructure would not only mobilize a very rapid energy generation platform but also create revenue for support of other financial products so badly needed in this part of the world.
There is a golden thread that is visible in all transformations that have had high impact and success in Africa. 1. They are private sector lead. 2. They increase service access to poor and rural communities. 3. The service use is judicious as they are tied to small profits on large volumes of sales or access to service.
We need philanthropy to provide a platform for an easier entry to business rather than a blank cheque for increased electricty access.
The second point is that the third world needs increased funding for technical universities. We need the scientists and engineers to build and innovate the power plants of the future and unfortunately the local capacity in this region is few and far between. I look with great admiration of India which has risen through its own intellectual capacity to build and export not only electricity as a commodity but also the machinery needed to generate electricity.
What philanthropy can most do for energy is to avail low cost finance to increase electricity generation and access and increase the technical capacity by building the schools and universities needed to develop the engineers, financiers and project managers that the energy sector needs.
- My two thoughts
BY Gilbert (Hop Studios)
ON September 11, 2019 04:49 PM
Good read!