Need for local energy banks to finance energy initiative

By Hazvinei Mwanaka recently in Beijing, China

BEIJING- Least Developed Countries (LDCs) should introduce local energy banks to scale up energy access and finance in their countries.

Speaking in Beijing during the recent Global Conference on Energy Access’s session on inclusive energy finance to reach the last mile, HIVOS Southern Africa regional project manager Green and Inclusive Energy, Reginald Mapfumo, said LDCs still have challenges in funding energy systems.

“We did an analysis of distribution of climate funds between 2003 and 2015. Out of the total of 14, 1 billion which was distributed, 95% went to high and medium income countries leaving only 5% for LDCs which is a very worrying statistics.

“Out of that 14, 1 billion, 40% went to large scale energy streams and only 3.5 % went to decentralising energy systems while 0, 06% went to energy for cooking,” he said.

“The statistics are a bit worrying because we always say we want to reach the last mile each time, but the money is not going where it is supposed to go so we are likely not to meet the target because we do not have the space. 

“Yes, there are some reasons for that including risks which exists in LDCs,” added Mapfumo.

He, however, said there is need to improve the design of international finance plans to target low income countries since the situation in these countries are different.

“We should also look at subsidises where governments can subsidise large power plants. Of course we (in Zimbabwe)  have had programmes around rural electrification but over the years we have realised that the electricity is not going where it is supposed to go,” he said.

He said the rural electrification programme, had to some extent,  failed to meet the demand in rural communities.

“We have also talked about why we have we not started stimulating local financing to ensure that we reach out to isolated communities and also try to blend with the international finance. Why is it that we do not have local energy banks as is the case with agricultural banks in most of these developed countries? Why are we not mobilising the government to facilitate space for local energy banks,” said Mapfumo.

James Chavula,  a journalist from Malawi,  speaking during the same session, said banks and other sectors should have a focal person who is knowledgeable with sustainable energy for purposes of supporting would-be entrepreneurs in that sector.

In his closing remarks at the end of the conference,  Permanent Representative of Malawi to the United Nations and Chair of the LDC group, Perks Master Ligoya, said action is needed by all stakeholders to support sustainable energy for LDCs.

“LDCs need to give priority to sustainable energy, create national plans and policies tailored to their needs, including access to modern energy for the poorest and act fast to create enabling environment for investment. 

“Partners need to provide support both financially and technically in line with country priorities, including through the South-South Co-operation,” he said.

Post Author: Nyasha Nyakunu

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