Journalist Sam Howe Verhovek interviews Simon Harford, CEO of the Global Energy Alliance for People and Planet.
GEAPP launched at the United Nations Climate Change Conference in 2021 with US$10 billion of committed capital, including up to US$1.5 billion in initial grant funding from The Rockefeller Foundation, IKEA Foundation, and the Bezos Earth Fund. GEAPP aims to scale private, public, and philanthropic capital over the next decade to expand energy access, reduce greenhouse gas emissions, and power economic growth in communities across Africa, Asia,
Latin America, and the Caribbean.
The problem of energy poverty in emerging markets is pernicious, affecting literally billions of people. Roughly 800 million people in the world do not have any access to electricity, but then there are those 3 billion people who have either unreliable or insufficient access to energy, which impacts their lives and livelihoods. It means that in reality 3.8 billion people — that’s nearly half the world — are affected by this problem. We are also here to help low- and middle-income countries transition their economies from fossil fuels to renewables. If they don’t, forecasts are that by 2050, emerging markets will be contributing 75% of global CO2 emissions.
GEAPP includes 18 partners and growing from philanthropy, government, public and private finance, technology, and renewable energy, who work collaboratively with emerging and developing economies to ensure universal access to affordable, dependable, sustainable energy. The Rockefeller Foundation started incubating the concept by talking to other major philanthropies about how they could pool their resources to create an organization whose sole focus is accelerating an equitable energy transition that solves energy poverty.
It sounds like you really have two goals in tandem: not just to lift huge numbers of people out of energy poverty, but to make sure that energy is as green as it can possibly be.
Precisely. GEAPP exists to make a difference — at scale and speed — to assist low- and middle-income countries in ensuring more people have reliable, affordable, sufficient access to energy — and in doing so, grow their economies in line with their national priorities while also helping them switch from being fossil fuel-based to renewables-based.
That’s a great question. In addition to a stable grid, you need a predictable enabling environment with streamlined licensing and administrative processes, and good data and clear regulations to make renewable power attractive to investors.
It’s also important to emphasize that out of the 60-plus countries we are focused on, each has different circumstances and needs. This is why our alliance places such integral value on local partnership. We must understand the nuance in
For example, the majority of Kenya’s current energy production is from renewables; they have effectively harnessed their geothermal, wind, solar, and other resources. It then becomes a question of how Kenya stabilizes its grid using high levels of renewables, which are intermittent, with traditional sources that are not dependent on sunlight or wind.
On the other hand, in Indonesia and South Africa, the bulk of their current power generation is from fossil fuels, predominantly coal. And so, the question is, how do they grow their grid with renewables, so that the proportion of their energy that is clean increases dramatically.
Green transition will embed best when coal is no longer the least-cost, or even a lower-cost option for power systems. This includes countries like South Africa where there are large reserves of cheap coal.
The private sector already has huge experience in investing in renewables in emerging markets, and there’s a lot of capital and willingness to do more, but the private sector and private capital must work in partnership with the host government in terms of enabling policy and regulations.
There is a major role for GEAPP and grant capital to play in catalyzing the market and pooling buyers to drive down costs. Today mini-grid developers in sub-Saharan Africa pay two to four times the global average cost for lithium-ion batteries. We are actively working to reduce the cost of their renewable energy components — including battery storage — with our Demand Aggregation for Renewable Technology program.
Yes! Let’s take one in Asia, and one in Africa. In India, 300 million people, and tens of millions of small enterprises, are being held back by unreliable services and forced to rely on expensive polluting alternatives such as diesel. Therefore, our focus is on renewable sources of power that are off the grid — we are talking about the villages and other remote communities that are hardest to reach with modern electricity. The focus there has been to help create and accelerate the provision of what are called “mini-grids.”
Exactly. There has been excellent work on this, building on what one of our anchor partners, The Rockefeller Foundation, has achieved with its Smart Power India initiative. It resulted in more than 717,000 people improving their lives and livelihoods through access to clean and reliable power; 42,471 jobs created or enhanced, and 65,432 tons of CO2 emissions avoided annually. We are now taking this work to scale. We are putting more capital into small networks that foster economic activity, and what we refer to as “productive use energy,” because the moment you do that, your use of electricity is turning into real income.
To oversimplify it, if you have access to electricity from a solar panel and it powers a light bulb, or it recharges your mobile phone, there is of course an important value to that. Maybe your children are trying to study at night, or you want to power a small refrigerator in your house. But that alone does not fuel productive economic activity. We are providing loans and grants to make sure that individual entrepreneurs and small companies can have dependable and sufficient power to run their businesses and serve their communities. And eventually, if you can run your own business and generate a steady income, then grant capital is no longer needed. That’s the ultimate success.
Three audacious goals by 2030: lift a billion people from energy poverty; reduce carbon emissions by four billion tons; and help enable 150 million jobs.
Another example is Nigeria, which has the world’s largest least electrified population: 90 million people, representing 45% of the country. There is also poor grid supply and widespread use of private diesel generators, which are polluting and expensive. The alliance is therefore working in partnership with the World Bank and others to provide private sector developers with tailored capital for off-grid solutions. It’s often a subsidy, working capital that can kick-start the sustainable energy market.
We also factor in that their revenue is in local currency, and therefore we create a pool of local currency they can borrow to expand. Too much of the financing available is in international currency, which can be difficult and very expensive to access. It’s a jigsaw puzzle where all the bits need to be working for it to be effective.
We’re also helping to drive down procurement costs. There are many small companies involved in electricity generation. Individually they don’t have a lot of purchasing power, but when you create an aggregated procurement platform, you’re essentially creating a single buyer that does have purchasing and negotiating power. This is already having a clear impact, and in the span of only a few months, there has been a 10% to 20% reduction in procurement costs on average, which is hugely significant to a small business.
At the macro level, GEAPP is an open platform where any partner, any philanthropist, and any social investor who cares about these issues, can work with us to make a difference. We are actively looking for partners. The more we are all coordinated and synergistic, the more powerful the outcomes will be.
We’ve set ourselves deliberately audacious goals. First, by 2030, to expand modern energy access to a billion people, and in doing so lift them out of energy poverty. Second, to reduce greenhouse gas emissions by 4 billion tons. Third, to enable 150 million jobs.
It may sound like a cliché but I would love it if we worked ourselves out of a job in 10 years. (Laughs.) Ultimately, we have to be realistic that these are big, challenging, long-term goals. We want to make the biggest difference as fast as possible. But the scale is vast, there are billions of citizens across the world who need access to modern, affordable, clean electricity. And we need to get this right.