Setting up a business means risking success or failure, and when the latter happens, it usually happens before the fifth year and today with a more competitive future, the life expectancy of a business can be reduced even further. The reality is even more challenging for social enterprises working to provide services to people living in fragile countries, and even worse in the midst of a global pandemic.
This has been the case with Easy Solar, an off-grid solar energy company that provides clean and reliable energy to 550,000 customers living in the African countries of Sierra Leone and Liberia. Just starting its operations, the COVID-19 crisis hit and the business faced three problems: supply disruptions that meant stock outages and lower sales; blockades that meant its customers could not pay; and markets that froze, slowing down investments.
Easy Solar is an example of how social enterprises have managed crises to achieve their goals despite adversity. Easy Solar’s CEO, Alexandre Tourre, recalls the actions they took to avoid harming their clients. “We mostly focused on keeping the lights on for our customers by sending them free days of energy ahead of full lockdowns, but we faced a very tight cash situation which had the potential to affect staffing and business continuity.”
Like Easy Solar, hundreds of social enterprises are working to bring affordable renewable energy access to some 470 million people who live off the grid, and who now need to be so because of the demands of the pandemic-driven digital world. Prior to this backdrop, the sector had been growing by as much as six times in investment over the last decade and is now a $1.75 billion market.
There is no doubt how the economic crisis that was generated in the wake of the pandemic jeopardized the progress of various industries, for example, the energy industries that provide access to households that were off the grid in their communities, delayed their progress towards providing access to nearly 800 million people who are still waiting for energy. Arguably, then, the crisis puts at risk the ability to achieve Sustainable Development Goal 7, which calls for universal energy access.
Partnership in favor of people connected
To counteract the difficulties caused by the pandemic, a partnership of public and private investors led by Acumen and CDC Group was formed to help energy access companies in sub-Saharan Africa and Asia weather the global recession. This initiative led to the creation of the Energy Access Relief Fund, which is part of the World Economic Forum’s COVID Response Alliance for Social Entrepreneurs.
The fund seeks to raise $80 million in relief capital, and while the size of the fund is significant, it is intended to target and channel capital well to address market failures. Various private entities, government donors, and financial and development institutions are members who hope to build a financial structure designed to keep energy reaching more people while protecting the growth of the energy sector.
It is well said that there is strength in numbers, and in this case, something similar happened, as the magnitude of the problem due to the pandemic meant that it was necessary and essential to attract several funders and various types of capital. Philanthropic funds are difficult to obtain, however, the conditions allowed for the possibility of obtaining large participation. In addition, the capital management system allows for the possibility of repayment and offers borrowers bridging rates for recovery.
The union of all these actors responds to a commitment to invest and help energy access and the fulfillment of one of the Development Goals to which all companies in the world should aim. The pandemic has now shown us how digitally dependent we are because we live interconnected and share the same fundamental needs. Regardless of where we are, basic services, access to information, and the ability to connect with our loved ones are now essential.
Today, social enterprises are leading clean energy models and strategies, setting examples for companies to follow. The news that they are joining a corporate effort to bring value to the underserved is encouraging. While there are still many difficult markets that continue to struggle with the disruptions caused by the pandemic, the relief fund, and the alliance are putting solutions in place.
Once again we demonstrate the great achievements that are obtained from public and private sector partnerships to implement tools that help more people in meeting their technological and digital needs. At eSmart Recycling we also understand the importance of these alliances, that is why we work with organizations that also look after the education of children and ensure that our work recycling and donating computers reaches the people who need them the most.