Solar Power for the Lamps of Africa: World Bank and IFC Back a Bright Idea

The World Bank and the International Finance Corporation have just launched an ambitious new program to bring electricity to millions of people in Africa who live without it. The Lighting Africa Initiative seeks to bring clean and safe lighting via solar lamps and other clean-fuel methods to thousands of villages and small towns that are not connected to the public grid and rely on kerosene lamps which are both polluting and unsafe. The World Bank estimates that about 500 million Africans (out of a total population of 743 million) lack access to a reliable source of "modern energy"—of these, some 250 million are expected to get access to clean lighting through this new project by 2030.The Bank initiative is worthy for two reasons:1. It is based on sound data. The World Bank estimates that Africans spend $17 billion a year on these unsafe fuels for lighting and other purposes such as cooking. Comprehensive enterprise surveys undertaken over the past decade in Africa show clearly that the lack of electric power is an enormous problem. African businesses spend far more than their counterparts around the world for electricity that is highly unreliable and of poor quality. Any business large enough to afford it has a generator, which produces electricity at three or four times the cost of the grid along with a lot of noise and pollution. The enterprise survey data also show that most Africans who do have electricity experience several power outages a day, often lasting several hours. Energy as a share of indirect costs is three to four times that of the costs of Chinese firms. Losses due to power outages average about 5 percent of sales and run as high as 15 percent. And outside metropolitan areas, virtually no one is connected to the public grid. The World Bank and IFC are focusing on LED technology that now provides useable white light, and on other low-cost lighting products that will help Africans to light their homes, cook food, and increase their security.2. It is based on competition. Rather than designing top-down projects in its headquarters in Washington, the Lighting Africa Initiative aims to provide clean lighting via a competitive grants program. A key component of this initiative is a competition run by Development Marketplace where businesses interested in providing clean lighting to Africa can submit a proposal via the Internet or other means. These proposals are judged by experts inside and outside the Bank Group and finalists are invited to do a "show and tell" before the final awards are made. Development Marketplace has a track record of funding excellent projects in a variety of areas since it was started in 2000. Expanding its reach to providing clean energy to Africa makes a great deal of sense.The Lighting Africa Initiative is not a substitute for clean, reliable electricity on a large scale. That will require large-scale hydroelectric projects (Africa has plenty of potential in this area) and possibly new solar technology that is cost effective. But it is a very good attempt to bring power to a very large number of people in a safe, timely andnon-polluting manner.