FOCUSBalancing profit and purposeAddressing energy poverty in Africa. By Taona Kokera, Director: Forvis Mazars.Taona Kokera, Director: Forvis MazarsIn the quest to address energy poverty inAfrica, the debate often centres on thetension between profit and purpose. As globalsustainability goals increasingly emphasiseuniversal access to energy, particularly inunderserved regions, the concept of “profit forpurpose” emerges as a crucial strategy.The concept of “profit for purpose” integrateseconomic objectives with social and environmentalgoals. It aligns seamlessly with the United NationsSustainable Development Goals (SDGs), especiallySDG 7, which calls for ensuring access to affordable,reliable, sustainable and modern energy for all. Thisalignment is particularly critical in Africa, where over500-million people lack reliable electricity access.According to the International Energy Agency(IEA) World Energy Outlook 2023 report: “As of2023, approximately 570-million people in Sub-Saharan Africa still lack access to electricity, whichunderscores the region’s substantial energyaccess gap.”This figure is consistent with other sourcessuch as the World Bank’s Energy ProgressReport 2023: “Around 575-million people in Sub-Saharan Africa live without access to electricity,highlighting the ongoing challenges in achievinguniversal energy access.”Profit for purpose therefore seeks to balancefinancial returns with social impact, ensuring thatbusinesses contribute to sustainable developmentwhile remaining economically viable. Thisapproach supports the African Union’s 12 priorities,including the commitment to universal accessto clean and affordable energy. By focusing onunderserved markets, businesses can play a pivotalrole in advancing these goals, demonstrating thatfinancial success and societal benefit are notmutually exclusive.However, investing in energy solutions forpoverty-stricken areas clearly presents uniquefinancial challenges and opportunities. Thechallenges revolve around the high initialcosts. Developing infrastructure in underservedregions often requires substantial capitalinvestment. In addition, these areas may alsopose higher risks due to political instability,economic volatility or poverty. Furthermore,there is limited access to traditional financing, asmany of these markets are considered too riskyby conventional investors, resulting in limitedaccess to commercial funding.Innovative financingThis creates the opportunity for innovativefinancing models. Multilateral finance institutionsand climate finance mechanisms offer potential forblending funding sources. Hybrid models, such asGAUTENG BUSINESS 202524
Investments in off-grid renewable energy solutions tackle energy poverty while alsocreating access to new markets.combining donor funds with private investments,can mitigate risks and attract capital to highimpactprojects. By combining these differentsources of funding – climate finance mechanismsand multilateral finance institutions – the financialburden is shared and the overall risk is reduced. Thisblended approach can make investments moreattractive and financially viable.Shared-value mechanisms offer companies thechance to align social impact with business success.By incorporating social responsibility into their coreoperations, businesses can unlock new marketopportunities and strengthen their competitiveposition. For example, investing in off-gridrenewable energy solutions enables companiesto tackle energy poverty while simultaneouslyentering an expanding market. This approach allowsthe investment in energy solutions to generatenew revenue streams and foster business growth,ultimately becoming self-sustaining through theincreased market potential.Solving energy poverty has profoundimplications for economic growth and socialdevelopment. Expanding access to energystimulates local economies by creating jobs inthe energy sector and associated industries. Thiseconomic activity can boost livelihoods andsupport small businesses. As businesses andhouseholds benefit from reliable energy, they canengage in more productive activities and smallscaleenterprises, which can generate additionaleconomic activity. This increased economic activityin turn leads to higher income and investmentreturns, thereby supporting the self-financing ofenergy projects.Reliable energy access improves productivityby enabling businesses to operate moreefficiently and by providing households with themeans to engage in productive activities, such assmall-scale enterprises.Access to energy enhances living standardsby providing basic amenities such as lighting,heating and cooking. This, in turn, supportsbetter health outcomes and educationalopportunities. Energy access can empowermarginalised communities, particularly womenand rural populations, by providing them withthe resources needed to improve their socioeconomicconditions. Improved quality of life canlead to stronger, more resilient communities thatare better able to support and sustain economicactivities, further contributing to the financialviability of energy projects.Closing the energy gap in Africa can becomeself-financing through such innovative mechanismsand strategies. By leveraging these strategies, theinitial investment in closing the energy gap can beoffset by the economic and social returns generated,demonstrating that such initiatives can indeed beself-financing in the long term. ■PHOTO: Solarise AfricaGAUTENG BUSINESS 2025
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