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A man adjusts a solar panel on his roof in Kwa-Mutisya, Kenya. Across the continent people are opting for off-grid solar solutions. Photo: Tony Karumba/AFP via Getty Images

For the more than 1 billion people without reliable electricity access, advances in off-grid solar (OGS) solutions present significant promise: A recent World Bank report showed that by 2017 the global OGS sector was providing improved energy access to an estimated 73 million households.

Yes, but: Half of the projected $5.7 billion for OGS to hit its full potential from 2017 to 2022 still needs to be raised. While established multilateral and commercial financiers are expected to partially fill this gap, new financial innovations that tap less traditional investors also show strong potential to help meet the sector’s growing needs.

Financial innovations such as pay-as-you-go business models have combined with falling photovoltaic-cell costs to open funding channels on terms acceptable to newer investors. This financing offers growing OGS companies the resources to expand their activities and increase customer access.

The details: Several features make the OGS market particularly suited to today's financial services innovations (e.g., blockchain, cryptocurrencies, crowdfunding, receivables securitization, data-enabled lending):

  • Newer technology and business models deployed by startups that lack track records or collateral
  • Smaller transaction sizes with multiple parties
  • Typically unmonetized social impacts (e.g., energy access and zero emissions)
  • Decentralized, remote providers and low-income customers
  • Large transaction data volumes
  • Limited financial infrastructure in OGS markets, requiring new models to finance market entry
  • Multiple companies beyond top firms that are needed to serve more customers

What's next: Many private, government and multilateral stakeholders are piloting these financial innovations in the OGS market. This summer, the World Bank will release a study with the Cambridge Center for Alternative Finance assessing these efforts and suggesting ways to scale moving forward.

Jonathan Coony is global lead for green competitiveness at the World Bank Group.

Go deeper

Updated 46 mins ago - Politics & Policy

Here come Earmarks 2.0

DeLauro at a hearing in May 2020. Photo: Alex Wong/Getty Images

The House Appropriations Committee is preparing to restore a limited version of earmarks, which give lawmakers power to direct spending to their districts to pay for special projects.

Why it matters: A series of scandals involving members in both parties prompted a moratorium on earmarks in 2011. But Democrats argue it's worth the risk to bring them back because earmarks would increase their leverage to pass critical legislation with a narrow majority, especially infrastructure and spending bills.

Ben Geman, author of Generate
1 hour ago - Energy & Environment

UN says Paris carbon-cutting plans fall far short

Illustration: Sarah Grillo/Axios

Nations' formal emissions-cutting pledges are collectively way too weak to put the world on track to meet the Paris climate deal's temperature-limiting target, a United Nations tally shows.

Driving the news: This morning the UN released an analysis of the most recent nationally determined contributions (NDCs) — that is, countries' medium-term emissions targets submitted under the 2015 pact.

Biden condemns Russian aggression on 7th anniversary of Crimea annexation

Putin giving a speech in Sevastapol, Crimea, in 2020. Photo: Mikhail Svetlov/Getty Images

President Biden reaffirmed U.S. support for the people of Ukraine and vowed to hold Russia accountable for its aggression in a statement on Friday, the 7th anniversary of Russia's 2014 invasion of Crimea.

Why it matters: The statement reflects the aggressive approach Biden is taking to Russia, which he classified on the campaign trail as an "opponent" and "the biggest threat" to U.S. security and alliances.