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Trouble for the poor as coronavirus crisis threatens to cut off clean electricity lifeline

Companies that provide clean off-grid electricity to the poor in developing nations are looking for ways to remain operational and keep life-saving power on as the coronavirus pandemic threatens economies globally and impacts customers finances.

A number of companies, operating in Africa and Asia, rely on small daily or weekly payments from poor consumers who use mobile money services to buy solar power from mini-grids or cover installments on loans for home solar systems.

In a survey by international organisation Sustainable Energy for All (SEforALL), 80 businesses running mini-grids and selling solar home systems in Africa and Asia said they expected to lose on average 27%-40% of their revenues in the coming months due to Covid-19.

SEforALL CEO Damilola Ogunbiyi said: “We could be in this situation in six months’ time where we have no off-grid companies to be talking about.”

The survey also found cash positions were tight across the industry, with about 70% of off-grid companies having only enough available to cover operating expenses for two months or less.

Economists are warning that the global shutdown is posing a major threat to the livelihoods of street vendors, farm labourers, construction workers and others with insecure employment.

Company officials are now looking at ways to help provide clients with electricity to meet their basic needs, such as offering five hours per day free and charging only for use on top of that.

Mansoor Hamayun, CEO of BBOXX said that job losses could put regular payments for electricity or cooking gas out of reach, which provides solar power to more than 1 million people.

BBOXX which designs, manufactures, distributes and finances innovative plug & play solar systems to improve access to energy across Africa and the developing world said that it does not want to switch off customers that suddenly have a week or one month lack of income.

So far more than 150,000 BBOXX products have been sold in more than 35 countries, including Kenya, Rwanda, the Democratic Republic of Congo and Togo, improving the lives of nearly 1 million people

The firm has not yet had to lay off staff based in Africa, however, cuts at its UK headquarters had to be made as new product development and innovation were put on hold.

In some developing countries, governments are putting measures in place to ensure that people have the energy required for their basic needs.

India’s government said it will give away millions of cylinders of cooking gas to those in need, while in Ghana, a state Covid-19 relief package is subsidising electricity for three months, fully covering costs for the poorest consumers.

Companies that sell solar home systems and operate small-scale grids are seen as vital in getting electricity to 840 million people still living without it, the vast majority in rural parts of sub-Saharan Africa and South Asia.

Meanwhile, investors of the global push to provide universal access to clean power and cooking are currently working together to devise a plan that will keep companies in business as funding dries up.

Efforts are also underway to push renewable energy as part of both the response to, and recovery from, the coronavirus pandemic.

The International Renewable Energy Agency and African Union Commission agreed last week to cooperate on projects such as helping rural health centres and communities deal with Covid-19 by using renewable power to run critical services.

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