2 October 2014: In an effort to accelerate rural electrification in developing countries, the European Commission’s Directorate-General for Development and Cooperation (EuropeAid) has launched an ‘Electrification Financing Initiative’ (ElectriFI), which aims to generate business opportunities in this area by supporting the private sector.

The proposed initiative was discussed during a workshop, titled ‘Empowering Rural Electrification: The EU Framework for Access to Sustainable Energy,’ held in Brussels, Belgium, from 29-30 September 2014. The workshop brought together approximately 300 stakeholders to discuss financial support possibilities to rural electrification projects through joint action by the private sector and civil society organizations. The workshop also sought to identify successful business models for accelerated roll-out of energy access in rural areas.

The ElectriFI initiative will have an initial allocation of €75 million, which according to the European Commission could grow considerably with additional funding from national or regional allocations and through partnerships with other donors and investors.

Arising from the realization that past, grant-based rural electrification support efforts have been lacking in leverage and sustainability, the ElectriFI project seeks to establish a “real partnership, geared by economic results, with beneficiaries and stakeholders.” The initiative will support investments that are scalable and flexible in terms of support to different business models and participation from the private and public sectors.

Targeted projects will involve rural electrification projects that result in greenhouse gas (GHG) emission reductions, are environmentally beneficial, or generate energy savings or carbon credits. While the European Community will hold a veto right in decisions, industry representatives, such as the Alliance for Rural Electrification (ARE), will be involved as advisors.

After the conclusion of the EuropeAid workshop, a workshop titled ‘ARE Energy Access Seminar’ took place at the same venue on 30 September. The workshop organizer, ARE is an international business association supporting the integration of renewables into rural electrification markets in developing and emerging countries. During the workshop, 90 private sector representatives shared experiences and lessons relating to business models for rural electrification and market access. In this respect, the workshop agreed on the need for increased coverage of risk mitigation measures.

ARE also welcomed the ElectriFI initiative, saying it will strengthen private sector engagement by “facilitating and thus multiplying small and medium scale private investments and operations in sustainable energy projects.” [European Commission Workshop Webpage] [European Commission ElectriFI Working Document] [European Commission Workshop Webcast] [ARE Seminar Webpage] [ARE Press Release]