IFC Finds Untapped Market Exists for Improving Energy Services for the Poor
27 June 2012: The International Finance Corporation (IFC) has published its findings on improving energy services for impoverished communities by means of private sector support, in a report titled "From Gap to Opportunity: Business Models for Scaling Up Energy Access."
The report concludes that, each year, the poor globally spend US$37 billion in low quality energy solutions for lighting and cooking, a largely untapped market for the private sector to deliver more sustainable alternatives. The IFC concludes that there are a multitude of commercial opportunities for lighting, electricity and clean cooking through innovative business models.
The report studies approximately 100 businesses around the world in order to provide recommendations for successful energy-service-related business models, in which profit margins range from 10-30%. Recommendations for stakeholders include avoiding give-away programs, removing discriminatory taxes on energy access products, and maximizing public-private partnerships to extend electricity grids.
Furthermore, it is recommended that investors: make broad investments on energy service products rather than narrow investments in single technologies; support enterprise development and refinement; and provide sufficient funding for each aspect of the business life cycle. [Publication: From Gap to Opportunity: Business Models for Scaling Up Energy Access]