Empowering Our Economies: Harnessing the Power of Productive Use of Energy

Addressing energy poverty for Africans is not a choice, it is a necessity. PUE can help us get there.

Traditional approaches to increasing energy access have had a limited impact on Africans’ ability to secure reliable and resilient access to power; since the start of the millennium, the World Bank estimates that the proportion of sub-Saharan Africans with access to electricity only increased from approximately 25% to 51%. At that rate of progress, the electrification of the continent will take another 40 years - an unreasonably long timeline and one that will condemn multiple generations of Africans to a future of substandard economic, health and equity outcomes. That is why we Africans, with the support of the development community, need to look at more creative, locally oriented approaches to electrification to go beyond the traditional to achieve the transformational. One approach in particular that I have seen work well in our communities is productive uses of energy, or PUE.

?PUE and Power Systems

As I complete my fourth year leading and working on the USAID and Power Africa West Africa Energy Program (WAEP), I’m heartened to see so much incredible change happening. Our work, and more importantly the work of thousands of Africans all over the region, is supporting renewable energy generation; connecting families, schools and hospitals to power across a dozen countries, and mobilizing billions of dollars of investment in power systems across the region.

Increasing energy access is critical to Africa’s development, and one approach to achieving this that’s really caught my attention is PUE. This refers to the development of income-generating activities and devices to strengthen economic sectors such as agriculture and commerce – and thereby maximizing the economic and social benefits of energy access. PUE allows families, entrepreneurs, and businesses to increase incomes and productivity through a combination of community-specific activities and private-sector partnerships.

PUE can be applied to anything from new grain milling machinery to water pumps that help farmers irrigate their crops in more efficient ways, to cooling solutions and supply chains that enable shop keepers or medical clinics to extend the life of their product inventories. And, when PUE is paired with mini-grids or grid-connected storage to improve resiliency, many of these businesses can reduce their reliance on less-clean diesel generators to provide emergency backup power.

Improving PUE Financing to Grow Small Businesses in Rural Ghana

Scaling and financing PUE solutions is a challenge. We know that unlocking financing for PUE projects may be just too large of a risk for many potential funders, but I’m nonetheless excited about the potential to bridge that gap. In Ghana, for instance, our Power Africa team is helping business owners – often in rural and sparsely populated areas – develop and replicate PUE-driven business models and raise capital to expand their operations.

One of the most impactful instances to me was our work with a farmer and entrepreneur named Mumuni Dassanah Issah in Nakori, Ghana. Mumuni first participated in a Power Africa training on PUE agribusiness models. We then helped him to secure a grant to procure agro-processing equipment to expand his processing business , reducing post-harvest losses, and enhancing business performance.

We also helped him obtain a grant from GIZ, Germany’s development agency, to access advanced electrically powered processing equipment for his farm. Mumuni now leads a gender diverse team where he indirectly and directly employs more than 100 women, and the majority of his permanent employees are women. His processing operation has become a lynchpin of the local economy.

In Nakori, as in many other areas of northern Ghana, PUE is a way for utility companies to provide better service to underdeveloped regions. For example, my colleagues are working with a small group in the utility company in Northern Ghana, NEDCo, where they are seeking to understand and improve applicability of PUE to increase their consumer base and boost demand.

Scaling PUE Nationally: Lessons from Nigeria

My home country of Nigeria has also worked extensively with Power Africa to show how PUE strategies can be scaled to meet the needs of Africa’s most populous nation.

In 2019, Power Africa's program in Nigeria helped to structure the Nigeria Electrification Project , a $350 million financing facility for an off-grid electrification project – ranging from solar home systems to healthcare electrification – that combines grant, private sector equity, and commercial debt. The team used these efforts and results from a 2020 study to design and pilot a small-scale mini grid initiative.

Over time, this work has expanded local PUE manufacturers and assemblers in Nigeria, spread PUE adoption in about 30 states, and improved financing of PUE by local financing institutions to support energy access and adoption. It has also helped diversify and innovate PUE technology, such as for cold storage, water pumping and agricultural processing equipment.

This ground-up, localized focus on the types of issues that are common throughout Africa are the key to Power Africa’s ongoing and future successes in increasing disposable income and promoting mini-grid and electricity company profitability and viability.

What’s Next for PUE?

So, what am I looking forward to for next year? It starts with PUE.

The reason: from working in more than 30 countries over the past 14 years, one thing is constant – applying local solutions to local problems (and sometimes accelerating them with a dash of international investment), is the best way to set communities on a path to progress. PUE clearly falls within this framework, and the successes I have seen on multiple PUE projects across Africa are testament to this locally led approach.

Here in West Africa, I am looking forward to 2024, deepening connections with local small businesses – to better understand their needs, apply the right solutions, and make an impact that matters.

And beyond next year? I know that I’ll often think back to entrepreneurs like Mumuni, and micro and small businesses like his that I’ve seen across West Africa. Sustainable change starts small, and grows with support to, and the consent of, local organizations and communities.

PUE, and similar ground-up initiatives are powerful recipes that enable people in underserved areas to generate sustainable incomes and increase demand for their goods and services. Our work has shown that there is enormous market potential for diverse PUE approaches across the region. With the right combination of training, financing, and awareness-building, PUE can help us empower communities and businesses and improve livelihoods across the region.

Opinions are my own and not the views of Power Africa, USAID, or my employer