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Making Light Work

Making Light Work

Geography • Dr Alex Money

February 2018 update

MLW is a research project led by the University of Oxford's Smith School. It evaluates the progress of Scaling Solar, a programme to implement utility-scale solar power in Africa.  We focus on Zambia and review the programme from a policy-centric perspective. Our outputs include recommendations to address specific challenges in the near term; and proposals to improve the programme's efficacy in the medium term. 

We're now some 15 months through and are consolidating some of what we've learned. The renewable energy landscape in Zambia today is already quite different to what it was in late 2016, when we started our project. There are lots of reasons for this, and developments overall have certainly been positive. Equally, it is fair to say that implementation has proven to be more complex than many anticipated, and we'll be producing a report that expands on this in more detail. For this short blog however, I wanted to highlight four themes that fall out of our empirical work to date.

1. Change needs managing

The tremendous opportunities that clean, cheap, renewable energy presents for Africa must be understood in the context of the transition that needs to take place. Perhaps because current levels of generation are low, and/ or many rural dwellers to not have access, the appetite for change is sometimes taken for granted. The reality is, however, that the status quo has its defenders – and often with legitimate cause. Zambia currently generates over 90% of its electricity from hydro power. This embeds practices, norms and behaviours that can be resistant to change at many levels – and so it has proven. The issue is by no means insurmountable, but it needs to be much better understood.

2. Interest needs aligning

Increasing the opportunities for the private sector to participate in the energy transformation is both desirable and necessary in order to make material progress against the SDGs. However where these activities have previously been the sole purview of government (including state-owned utilities) there is an economic, social and cultural necessity to actively align private sector interests with strategic national objectives. In the absence of these alignment, a culture of misinformation, scepticism and mistrust can quickly develop, contributing to delays. A commercially inclined public co-investment partner is a desirable but insufficient criterion to address this. 

3. Investment needs cause

The lack of 'bankable' projects is one of the most frequently cited reasons for the infrastructure deficit in Africa. However, the low cost of capital globally is driving financial innovation, creating opportunities to 'blend' finance in ways that did not exist just a decade ago.  Innovative development finance institutions (DFIs) have a critical role to play in de-risking infrastructure projects for private sector involvement. However, the role should be explicit. Our research shows that many stakeholders felt that concessionary finance from the IFC risked ‘crowding out’ commercial finance, because the private sector would be unable to match those terms. DFI’s need to maintain (but stick to) their catalytic role in mobilising blended finance.

4. Development needs locals

The need to build local capacity if development is to be sustainable has become a generic statement to the point of cliché. However, our work has repeatedly emphasised the value of developing local capacity to fund small and medium scale renewable energy projects. Asset securitisation or the partial flotations of state-owned enterprises on local exchanges can help to develop local liquidity. It is a model that has been successful for emerging markets in Asia and Latin America; but remains underutilised across much of Africa. The energy transformation offers the prospect of a wider development renaissance.

Dr Alex Money writes about his Global Challenges Research Fund project, called Making Light Work.

My subject:

About me:
My name is Alex Money, and I am a Programme Director at the Smith School of Enterprise and the Environment, part of the School of Geography and the Environment at the University of Oxford.

What is my research project?
In December 2016 I was awarded approximately £360,000 through the British Academy’s Sustainable Development Programme, funded by the Global Challenges Research Fund. My project, called Making Light Work, runs through to the end of March 2018.

Making Light Work analyses a new programme, developed by the World Bank, that aims to rapidly increase the amount of energy that is generated through solar power in developing countries. The programme, called Scaling Solar, involves creating a “one stop shop” that pulls together the key elements necessary to develop and implement privately funded grid-connected solar projects, delivering electricity at competitive tariffs.

Solar power could offer a significant and sustainable complement to the energy mix of countries like Zambia, one of our key study sites. Building further upon programmes such as Scaling Solar would support many of the objectives of the UN Sustainable Development Goals, most obviously on energy, but also in terms of economic growth and infrastructure. Conversely, a lack of progress in expanding sustainable electricity generation might lead to greater energy insecurity, with the attendant risks this presents to rapidly growing and urbanising populations. The stakes could therefore not be higher. 

The programme is at an early stage, with engagements in a few countries in Africa. Making Light Work is using the funding provided though the British Academy to empirically evaluate the progress being made through Scaling Solar on specific country programmes. Our objective is to identify the key factors that are necessary for the initiative to succeed at scale.

How my British Academy award helped me:
I am a relatively late arrival to the world of academia, having spent my twenties and early thirties working in finance: first as an emerging markets fund manager, and then in capital markets advisory. In the autumn of 2009, my wife and I relocated from London to Oxford, accompanied by our two young sons. At the time, the intention was to spend ten months in the university city while I completed a master's degree. Eight years later, here we still are.

After finishing my PhD in 2014, I found that the opportunities within academia that were aligned with my particular set of interests and experience were few and far between. I was fortunate to be offered some part-time work within my department as well as within Oxford’s collegiate system, that provided me with the credentials to apply for research funding. But I was especially fortunate to have a supportive family during what was a particularly uncertain period in my career. After what was a difficult year or so of sporadic employment, I gave myself a final further six months to find an opportunity to engage with academia full-time. If unsuccessful, I had determined that I would return to the stability of an income from within the private sector, even though my interests increasingly pointed me in other directions.

It was during the third of these six months that a colleague alerted me to the call from the Sustainable Development Programme of the British Academy. The submission time was tight, and successful projects would be awarded within weeks of the final deadline, so I would know the outcome within my allotted six months. This was the last application that I intended to make before leaving academia. I was therefore delighted to be shortlisted and subsequently receive one of the 16 awards that were made. This provided me with the scope to work full-time as an academic. In the subsequent months since receiving the award, further opportunities have emerged which should hopefully allow me to pursue this career for some time to come. It is therefore of little exaggeration when I say that the British Academy has made a profound contribution to shaping the course of my working life.

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