What is the humanitarian challenge?
Large-scale displacement can have a significant long-lasting impact on local economies and environment which is exacerbated by humanitarian operations, including through the dependency on fossil fuels for powering their operations and programs. The humanitarian sector spends an estimated 1.2 billion USD yearly on fuel oil to power diesel generators across the globe in both remote and urban areas. In Ethiopia, NRC relies heavily on diesel generators to power operations.
What is innovative about this project?
The project addresses an important challenge in humanitarian response. Although there are many ongoing solar projects in the humanitarian sector today, the sector experiences challenges in scaling successful solutions. This project aims to scale and is backed by an innovative financing model to ensure the sustainability of the project.
NRC aims to achieve the intended results through a partnership with Empower New Energy (Empower). Empower is an award-winning impact investment fund manager focusing on small and medium-scale renewable energy projects. Empower’s business model is well suited to this challenge. Empower invests equity into small to medium scale renewable energy projects in Sub Saharan Africa and targets projects that will deliver social impact and measurable carbon reduction in addition to acceptable financial returns. Projects of this size often struggle to attract affordable finance due to perceptions of risk. Empower’s model mitigates this issue by drawing on decades of project development experience in Sub-Saharan Africa to work closely with local partners to ensure projects are investment-ready, before investing in and managing all of its projects as a portfolio from its investment vehicle, Empower Invest AS. The latter means that risks can be balanced, and that projects can be refinanced or leveraged on terms much more comparable to those of larger investments, allowing costs to be reduced.
What are the expected outcomes?
Expected outcomes are to transition the energy supply of NRC Ethiopia’s operations (offices, communal kitchens for unaccompanied minors, training centres and schools) from diesel generators and kerosene to clean, renewable energy and to facilitate the extension of the solar solutions to a wider target group which include other organisations, markets and where possible refugees and host community households.
Read more about the project here.