Global Woman Award winner Caroline Nijland calls for action to accelerate energy access
14 August 2020 | GET.invest Finance Catalyst advisor Caroline Nijland has helped connect 1 million people in sub-Saharan Africa to clean power, results of her tireless work (+25 years) for the energy access sector, for which she was recently awarded the prestigious Global Woman Award for Sustainability.
In this interview, Nijland speaks about the importance of universal energy access, the challenges she has encountered in scaling up rural electrification, the impacts of the Covid-19 crisis and opportunities lying ahead. The contents of this article are considered to be the personal opinion of the advisor and do not necessarily reflect the views of GET.invest’s donors.
Involved in GET.invest since 2018, Nijland has been advising solar home system and mini-grid companies in countries such as Kenya, Nigeria, Cameroon and the Democratic Republic of Congo. Alongside her assignments for the GET.invest Finance Catalyst, she has been working on providing solar energy to rural areas of sub-Saharan Africa via her own company, Helios Infinitas. Prior to this, Nijland served as a board member and vice president of the Alliance for Rural Electrification (ARE) and as the General Director of the Foundation Rural Energy Services (FRES), where she worked on establishing and monitoring five medium-scale, commercial electricity companies in Africa.
To Nijland, the Global Woman Award for Sustainability is a recognition for this work and that of others dedicated to improving people’s lives through energy access:
“As I was raised in Cameroon, I saw the negative impacts of the absence of electricity in the rural towns and villages early on. My long career in business has been dedicated to creating a positive socio-economic impact in sub-Saharan Africa and improving the quality of lives of populations. This award is a recognition for the work done in a field full of challenges. More importantly, this award is dedicated to the energy access sector that deserves the attention of the general public and the world at large. It is a vote for all those working in this sector with passion and perseverance, dedicated to bringing electricity to the 1,2 billion people that still live without.”
Connecting people to clean energy is especially critical for rural areas and semi-urban areas. Nonetheless, promoting and advancing the development of rural electrification markets can be difficult and progress is slow, with a limited number of businesses willing to take on the challenge to deploy and scale rural electrification activities, according to Nijland. A notable barrier is what she calls a “gap between visions”:
“When we look at regulations and financing, we need a long-term vision, otherwise developers and operators will not feel supported. Companies consider the lifetime of their assets and they want to provide populations with sustainable, long-term energy access. That is why the strategy of companies is to look at the long term. But the funds and regulations look at the short and medium term. There is a gap between these visions that we need to bridge. If we want to have more developers, companies and operators in the field, we need to create a suitable climate for investment and entrepreneurship to thrive. Financial and policy support based on a long-term vision from governments and international funds, is of utmost importance to allow for success. Potential future threats related to climate change must be included in valuation models. Finally, the financial sector should take into account the risks associated with environmental change, including stranded assets and how these risks are mitigated when making investment decisions.”
The Covid-19 pandemic has created additional hurdles for project developers, slowing down implementation, decision-making processes for concessional agreements, market studies and funding. Nijland reports that her clients at the GET.invest Finance Catalyst are encountering liquidity issues and decreased sales, while access to capital is either slowed or reduced, making it difficult for companies to maintain their infrastructure. Indeed, companies have reported an average 20 percent increase in non-payment and defaults, according to Nijland. While existing support instruments have proven useful in helping companies cope with the impacts of the crisis, providing better insights into businesses’ financial situations and supporting them in deciding on strategies to cope, many clients urgently require bridge financing, debt relief and additional grant funding to be able to maintain operations during and beyond the crisis.
However, not all is looking grim, and the crisis represents a chance to raise the importance of energy access on the global development agenda, provided that challenges can be turned into opportunities, insists Nijland:
“This is a call to action for the international community and financial sector to accelerate energy access. With the green agenda of the European Union and the green recovery envisioned post Covid-19, the political momentum to address the topic is there. We have to look at the close interlinkages of energy access and other developmental issues. Energy access provides an opportunity to resolve or at least alleviate some of the global issues we are currently facing. With electricity and technology, education can be provided to every child, anywhere. By equipping and electrifying health care facilities, we can provide effective care to rural populations. Renewable energy solutions can increase productivity, support agriculture and food security, mitigate climate change and reduce migration, deforestation and biodiversity loss.
Energy access specialists are ready to provide sectoral expertise and solutions needed to support the development of national and international agendas. The energy access sector should get a seat at the table of national and international meetings where global issues such as migration and climate change are discussed. At the same time, we are going to require more innovative solutions, and these provide tremendous opportunities for local entrepreneurs and inventors who are well acquainted with local needs, realities and ways of life. Combined with the high levels of creativity amongst the younger generation, countries in and beyond Africa can thrive on local innovation that may drive entire economies towards a new era.”
Caroline Nijland is part of the GET.invest Finance Catalyst team of advisors, which stands ready to support project developers in sub-Saharan Africa and the Caribbean in realising their propositions by solidifying their business plans, identifying appropriate financing options and assisting in contractual negotiations. Support for businesses affected by Covid-19 is available in the areas of strategy including business continuity, business and financial structuring as well as financial modelling, access to finance support, and transaction advisory.