Clean energy access is a major constraint for the world’s poor. Over a quarter of the world’s population lacks access to electricity, while some 2 billion people are forced to spend disproportionate amounts of time and resources on traditional biomass for cooking and heating. Where modern energy services are unavailable, people resort to expensive and unsustainable systems, which can exacerbate energy insecurity and leave communities more vulnerable to the effects of climate change. In many countries however, thanks to recent technological developments, efforts to widen access to clean energy now depend less on technology and more on financing arrangements, backed by a policy environment that is focused on serving the poor.
UNCDF has partnered with UNDP to develop CleanStart, a programme to help poor households and micro-entrepreneurs access financing for low-cost clean energy.
UNCDF new global facility was officially launched in coincidence with the side event Financing Access to Clean Energy for the Poor, co-organized by UNCDF, UNDP/GEF, the Austrian Development Cooperation and the Swiss International Development Cooperation Agency during the 2012 UN Conference on Sustainable Development, held in Rio de Janeiro on June 20-22.
Continuing its partnership with UNCDF, the Austrian Development Cooperation announced its contribution to the innovative UNCDF-UNDP program aimed at increasing poor households and micro-enterprises access to clean energy by addressing financial and non-financial challenges, supporting microfinance and the development of enabling environments for clean energy financing.
“There is no doubt that access to affordable, available energy is a precondition to healthy socio-economic development. Promoting such access in cooperation with development partners, with a focus on renewable energy and energy efficiency, has been a priority of Austria for many years,” said Ambassador Michael Linhart, Director General for Development Cooperation in the Federal Ministry for European and International Affairs of Austria. “Because access to finance is a major obstacle for the poor to access clean energy, we believe that the development of smart micro-finance tools will play a key role on the road to more equity. For this reason the Austrian Development Cooperation welcomes the Clean Start programme. It addresses this financial barrier together with the non-financial barriers that poor populations and small enterprises face.”
With CleanStart, UNCDF and joined forces to develop an innovative approach to increasing poor households’ access to sustainable, low-cost clean energy. CleanStart fosters poor households’ access to clean energy via (I) the combined supply of technical assistance, grants and loans to MFIs; (II) technical support to the key actors across the energy supply chain; (III) advocacy to promote enabling environments for clean energy financing; and (IV) robust knowledge-management to share lessons learned globally.
“Microfinance institutions, which by definition target low-income clients, are well placed to provide the products and services poor households and micro-entrepreneurs need to pursue clean energy opportunities. CleanStart promotes such financing arrangements, supports quality assurance measures and offers advisory services to contribute to a mutually beneficial cycle of investment, awareness-building and the creation of a new, higher return market segment,” said Ms. Christine Roth, UNCDF Executive Secretary a.i. “We are excited about the potential of this programme to improve the variety of products and services needed reach low income households and proud that this new Austrian Development Cooperation-UNCDF partnership presents another boost for reducing poverty and accelerating progress towards the Millennium Development Goals.”
CleanStart is an innovative approach that builds on successful experiences around the globe to increase poor households and micro-enterprises access to clean energy by supporting microfinance, enabling policy and regulatory environments as well as more efficient value chains. It aims to help lift at least 2.5 million people out of energy poverty by 2017, in ways that can be replicated and scaled up by others.