Sustainable energy powers opportunity. As noted by the SE4All initiative, 1.3 billion people—one in five globally—lack electricity to light their homes or conduct business. Engaging the private sector to define and implement financially sustainable business models could play a pivotal role in accelerating off-grid rural electrification. The IEA estimates that more than $50 billion annual investment is needed to achieve universal energy access by 2030, much of which will be mobilized from and directed toward the private sector. Yet notable barriers remain for unlocking private sector participation in energy access. As you are aware, we continue to implement a multi-year initiative to explore and support commercially viable business models for private sector engagement in providing energy services to rural, off grid customers. Reaching millions of customers is not a new challenge for the private sector. Around the world, even in rural areas with no access to electricity, industries such as telecom, consumer goods, appliances and automotive are reaching their customers using a network of retailers, distributors, local partners and agents. Despite some obvious and major differences between the energy sector and others, there is room for inspiration and there is a rural customer to be served. A confluence of factors including, recent advancements in renewable energy based generation and storage technologies, development of mobile-phone enabled metering, payment and customer management solutions, availability of high-efficiency household appliances and reduction in costs of these technologies, is creating a unique opportunity for the private sector.
What can we learn from other sectors to help design these business models for the energy sector? How can entrepreneurs who have created unique business solutions and are successfully running their companies in a few villages, scale-up or replicate? How can we engage small private enterprises that exist in most rural areas in becoming local energy service providers? Reinventing the wheel, village-by-village and country-by-country is not necessary. Can we learn and adapt the well-established practice of franchising? Can we help the development of the business method and relationships that could accelerate the pace of off-grid electrification? These are few of the questions for which we seek answers during this E-Discussion.
Focus areas: Is the Franchise approach relevant for A-B-C business models? What are the different types of franchise approaches and their respective modalities? What kind of capacities are required from potential franchisees? What are the benefits of franchise approach in terms of scaling up? What specificities should a franchise model address in order to be relevant for A-B-C business models? What are the key start-up barriers for franchisees and franchisors? How to match-make rural entrepreneurs with franchisors?