Strengthening Inclusive Business Ecosystems Experience from Africa in Solar Energy G 2 0 G P I B / I BAN P O L I CY D I A LOGUE, S C A L I NG - U P P O L I CY L I N KS TO A C C ELERAT E C O MME RCI A L LY V I A B L E I N C LU S I V E B U S I NES S ES I N T H E E N E RGY S EC TOR B E R L I N, G E R MA N Y, M AY 5, 2 0 1 7 REGIONAL SERVICE CENTER FOR AFRICA
Like species, businesses depend on supportive ecosystems Introduced in a McKinsey Award-winning Harvard Business Review article, the term business ecosystem refers to the community of interconnected, interdependent players whose actions determine whether or not a company's inclusive business model will succeed." Source: Gradl and Jenkins (2011) tackling barriers to Scale: from Inclusive Business Models to inclusive Business Ecosystems 5/23/2017 AFRICAN REGIONAL FACILITY SERVICE FOR INCLUSIVE CENTER FOR MARKETS AFRICA (AFIM) 2
Inclusive businesses ecosystems (IBEs) are typically weak Key ecosystem stakeholders may lack the capabilities necessary to support inclusive businesses For example, market research firms may lack the skills and techniques to obtain accurate data on low-income customers Key ecosystem stakeholders may be missing These often include low-cost suppliers, credit bureaus, and certification bodies And many inclusive business models are new and unproven They may lack the networks, influence, finances, or track records to obtain the support they need from key ecosystem stakeholders 5/23/2017 AFRICAN REGIONAL FACILITY SERVICE FOR INCLUSIVE CENTER FOR MARKETS AFRICA (AFIM) 3
Strengthening IBEs requires 5 steps Assess scope and feasibility Engage ecosystem stakeholders Cultivate shared vision for change Design collaborati ve action plans Implement and continuously improve Increased opportunities for low-income people through stronger IBEs Enable mutual accountability and learning 5/23/2017 AFRICAN REGIONAL FACILITY SERVICE FOR INCLUSIVE CENTER FOR MARKETS AFRICA (AFIM) 4
Tools for IBE strengthening Training manual with full training slides and tools targeting UNDP Country Offices and their partners: Tool 1: Concept note of an Inclusive Business Ecosystem Initiative (IBEI) Tool 2: Terms of Reference (ToR) for carrying out a Mapping Study Tool 3: Outline for the Mapping Report Tool 4: ToRs for an IBEI platform facilitator Tool 5: Collaboration agreement for the IBEI platform Tool 6: Template for collaborative action plan for the platform Tool 7: Generic call for proposal for support to Inclusive Businesses within IBEI sectors Tool 8: : Guideline on the role and responsibilities of UNDP CO in the Inclusive Business Ecosystem Initiative (IBEI) implementation Primer on the Role of Government in Inclusive Business Showcasing how the Public Sector can collaborate with the Private Sector to achieve sustainable development objectives is available in English and French. 5/23/2017 AFRICAN REGIONAL FACILITY SERVICE FOR INCLUSIVE CENTER FOR MARKETS AFRICA (AFIM) 5
The case of Senegal solar energy - Context Energy is a prominent part of Senegal s development plan Electricity access rates is only 25% in rural areas (75% in urban areas) where more than 50 % of the population lives Senegal is blessed with a good potential for renewable energy, solar energy in particular The sector of renewable energies in general, and solar energy in particular, still plays a marginal role as a subsector of the electricity sector in Senegal Senegal s solar energy market presents clear potential for growth and inclusivity 1.59% 4.02% 0.11% 1.72% 8.30% 84.26% Oil Gas Biofuels Hydro Solar PV Other sources Sources of electricity production in Senegal in 2013 47 5/23/2017 AFRICAN REGIONAL FACILITY SERVICE FOR INCLUSIVE CENTER FOR MARKETS AFRICA (AFIM) 6
The case of Senegal solar energy Steps 1 and 2 in practice IBE mapping - stakeholders map Simplified flowchart of Senegal's solar energy stakeholder map 5/23/2017 AFRICAN REGIONAL FACILITY SERVICE FOR INCLUSIVE CENTER FOR MARKETS AFRICA (AFIM) 7
The case of Senegal solar energy Steps 1 and 2 in practice IBE mapping gap analysis along the 4 Is Information provides businesses with the awareness, knowledge, technology and knowhow required to operate in low-income markets Investment provides the financial backing that enables businesses to venture into challenging low-income markets Incentives provide businesses with the impetus to engage with low-income communities by rewarding positive externalities and reducing the cost of doing business Implementation support provides the logistics, transaction, marketing and communication, and microbusiness support services that allow IBs to function in a variety of dynamic environments 5/23/2017 AFRICAN REGIONAL FACILITY SERVICE FOR INCLUSIVE CENTER FOR MARKETS AFRICA (AFIM) 8
The case of Senegal solar energy Steps 1 and 2 in practice IBE mapping recommendations for action Area Type of intervention Proposed Leading Actor(s) Comments Incentives Review the current system Ministry of Finance Create a level playing field for formal of tax exemptions sector companies and protect them from being companies providing lowcost and low-quality products. Develop mechanisms for quality assurance of solar energy products MEDER - CERER Develop a highly reliable compensation mechanism that meets the conditions of international banks to enable companies to have access to international investments. Review regulatory framework for the rural electrification MEDER Define a feed-in tariff CRSE A feed-in tariff model similar to the EEG in Germany enabling private house owners to install solar PV systems on their roofs and inject the generated electricity into the national grid Extract from the Recommendation section a precursor to the Platform Collaborative Action Plan 5/23/2017 AFRICAN REGIONAL FACILITY SERVICE FOR INCLUSIVE CENTER FOR MARKETS AFRICA (AFIM) 9
The case of Senegal solar energy Steps 3, 4 and 5 in action - IBE Platform Facilitation Platform facilitator hired Mapping validated Platform vision, statutes and collaborative action plan prepared jointly and validated. Signature on April 28, 2017. 2 key types of action for the IBE platform Platform macro-level action Collaborative action plan implementation Platform micro-level action Direct support to Ibs Innovation Challenge 5/23/2017 AFRICAN REGIONAL FACILITY SERVICE FOR INCLUSIVE CENTER FOR MARKETS AFRICA (AFIM) 10
The case of Senegal solar energy Step 3, 4 and 5 in action role of Platform Facilitator Done Step 1: Assess scope and feasibility Early relationship building Managing expectations Initiating dialogue Did not have a facilitator for Step 1 in Senegal Done Step 2: Engage ecosystem stakeholders Engaging and convening stakeholders Making the case Energizing engagement Finding and empowering champions Done Step 3: Cultivate a shared vision for change across the ecosystem Facilitating communication, coordination, and collaboration among stakeholders In process Step 4: Design and implement collaborative action plans Providing or sourcing expert advice Providing or mobilizing financial resources, for example through Micro Challenge Grants, Catalytic Grants or connections with impact investors In process Step 5: Implement and continuously improve Measuring impact Documenting and disseminating lessons learned 5/23/2017 AFRICAN REGIONAL FACILITY SERVICE FOR INCLUSIVE CENTER FOR MARKETS AFRICA (AFIM) 11
Two more IBEIs in process Uganda Tourism Goal: harness the tourism sector as a major source of economic growth, employment and revenue for Uganda Update: mapping concluded in 2016; IBEI platform launched with agreed Collective Action Plan Lesotho - Mobile Money Goal: advance inclusion to formal financial services by supporting and promoting the mobile money ecosystem in the country. Update: mapping concluded in 2016; new dedicated Project Document agreed with IBEI platform to be launched this week 5/23/2017 AFRICAN REGIONAL FACILITY SERVICE FOR INCLUSIVE CENTER FOR MARKETS AFRICA (AFIM) 12
IBE Strengthening - Lessons Learnt so far Need to deliberately and fully engage all key ecosystem players Careful definition of scope of work and selection of IBEI Platform Facilitator Critical importance of explaining and mobilizing stakeholders on IBEI collective action and accountability approach different from traditional donor project led and funded approach Absolute need for development partners to join and contribute Need for early involvement of impact investors and positioning of the IBEI as a tool to de-risk investments and amplify investment deal flow 5/23/2017 AFRICAN REGIONAL FACILITY SERVICE FOR INCLUSIVE CENTER FOR MARKETS AFRICA (AFIM) 13
The role of AIMEC in IB Policies and Replication Opportunities in Africa The African Inclusive Market Center (AIMEC) to be approved as an African Union by 2017 will collate, review, and analyse existing inclusive business and inclusive markets policies and programmes, and support the replication of these in Africa. IDENTIFY IB and IM policies & programs identified and documented FACILITATE Collaboration of key actors facilitated REPLICATE Support scaling of successful programmes and the piloting of innovation in IB and IM REGIONAL SERVICE CENTER FOR AFRICA 14
Thank you! Pascale Bonzom, Programme Specialist, UNDP RSCA pascale.bonzom@undp.org REGIONAL SERVICE CENTER FOR AFRICA 15