GIZ Financial Systems Development (FSD) supporting KPI work in the off-grid energy sector Side Event on PAYGo Financial Analysis and Reporting Initiative Sebastian von Wolff USC, 6th of November 2018 Kigali, Rwanda

GIZ - Facts and Figures Federally owned enterprise for sustainable development Promoting complex reform and change processes by technical advisory and capacity development Main client is the Federal Ministry of Economic Cooperation and Development (BMZ) Client base also includes other German ministries, international donor organizations, partner country governments and private foundations GIZ employs more than 17,000 staff members, is active in over 130 countries with offices in 87 countries; business volume > € 2bn

Financial Sector Development (FSD) project examples Ukraine – Financial Sector Stability Support to reform Public Finances Technical assistance to strengthen risk management and supervision Introduce International and European regulatory standards Costa Rica – Green Finance Reduction of CHG Emissions in the Coffee Sector Development of bankable projects Support investments in low-emission technologies via: Credit Fund and financial incentive mechanism Laos – Microfinance Microfinance Services in Rural Areas Supervision Development of village bank structures Improve Financial Literacy Green Finance Financial Sector Stability Microfinance Insurance Rural, Agriultural, and SME Finance Egypt – SME Finance Promotion of Non-Bank Financial Services for SME Development of regulatory and supervisory conditions Training and product development Facilitating Start-Ups Ghana – Insurance Regulation of Insurance Markets Development of a regulative framework Market supervision Targeted educational campaign Improvement of the consumer protection Increasing customer orientation of insurance providers

Why do we support the KPI work (and go further…) Energy Financial Systems Development

Various reasons, for example Off-grid energy finance requires common standards Energy experts and financial sector experts don’t necessarily speak the same language We want local companies and SMEs play a stronger role Significant increase in terms of local debt financing requires local banks’ involvement plus SME support and training Local lenders are conservative and require training Won’t change unless local lenders get familiar with PAYG business model GIZ FSD sees both: a high development impact but also risks!

New activities underway Strengthen interdisciplinary energy (and digital) finance team within GIZ Integrate FSD expertise into several of the existing or new energy projects of GIZ Increase efforts on consumer protection and responsible finance As part of the new initiatives of the German government (Compact with Africa, Marshallplan, etc.) we‘ll also seek to promote SMEs in the off-grid value chain (e.g. distributors) Already implementing: GOGLA cooperation and support

Our current work with GOGLA Side event Abidjan: „Financing the Off-grid Sector: Turning Portfolio into Finance” issue paper on securitization  Action paper Analyzing the impact of off-grid solar lighting and electrification on jobs and income Advancing financial performance measurement Local financial sector involvement in the off-grid solar industry Together with GOGLA, the GIZ sector program Financial system development is currently implementing several measures in the off-grid energy sector. 1) 2) The off-grid solar electrification and lighting industry represents a high growth and high impact market. Providing better information to various stakeholders on employment effects created in the sector. 3) Lack of data poses barrier to investment. The primary aim of the Project is therefore to reduce barriers to investment in the off-grid solar sector, through improved performance reporting. This overall objective is defined by the following benchmarks: - To provide and operationalize a platform for data collection for aggregated public reporting in two countries: Uganda and Cote d‘Ivoire; - To lay the framework for building an anonymous portfolio performance index for the SHS sector.

Thank you for your attention! 22.02.2019 Thank you for your attention!