In Ethiopia's Amhara Region-West Gojam zone, Warga, a small village is known for its steel roofs rather than thatched ones over its mud houses. Normally, the use of steel roofs is celebrated as progress.

However, in Warga village, it is a grim reminder of how one woman lost her sleeping daughter when her thatch-roofed house caught fire. The woman was out looking after their cattle. Drawing strength from this tragedy, the woman and her village were determined never to let a similar fate befall others. As a result, many of the homes began to invest in new steel roofs, earning the village its name ‘Korkoro Sefer', meaning Steel Roof Village.

In another village, Koda, in Southwestern Ethiopia-Kefa Zone, as darkness fell, several women came running to the health facility screaming for help as a woman went into labour. The nurses at the facility immediately sprang into action. While some dashed in various directions looking for torchlights, others instantly put on their phone torches to provide some semblance of visibility for the woman as she gave birth. It is a common occurrence for health facilities in off-grid communities to lack the electricity they need to operate safely or refrigerate vital medications.

Rekik Bekele, a young female electrical engineer, witnessed the scene that day. She was a member of the team from the company installing solar panels for the health facility. It tore at her heart that something as essential as electricity, readily available in the city, was a life and death situation for women elsewhere. From that moment, Rekik knew she had to become part of the solution. That solution was ensuring villages across Ethiopia have access to affordable, reliable, and clean sources of electricity.

Starting from scratch: Green Scene Energy

And so, five years ago, Rekik started her own company, Green Scene Energy, to provide affordable, high-quality solar-powered electrification to off-grid communities. Her vision is to empower clients, especially women who are the domestic heads, with access to solar energy. This can help ensure they have safe access to electricity, which can reduce indoor pollution (for cooking), reduce workloads (collecting fuel), and provide income-generating opportunities. Increasing access to energy and working to close the gender energy gap exemplifies to UNCDF’s Women Builders of Digital Economies approach to Gender Equality and Women’s Economic Empowerment.

“Setting up my own business has not been an easy journey” Rekik says. Her company has had to test different solar devices and distribution channels. Their initial strategy was to distribute the product directly to their target population; however, they quickly realized it was too costly for a small company like theirs. They then explored working with retailers for distribution, but that also hit a snag as most retailers did not have the financial resources to expand their reach.

Green Scene then improved its business model in partnership with microfinance institutions (MFIs). Partnering with six of them, initial challenges such as expanding reach were overcome, but branches were still very far removed from truly rural populations. While competition from more affordable, but lower quality solar panels, limited growth of the company.

Despite these challenges, Green Scene has served over 8,000 households to date. “And that’s still just the beginning," says Rekik, for a country where 56 percent of the population has no access to electricity. Like a true entrepreneur, Rekik is always looking for solutions. In her resolve to reach more off-grid communities, Green Scene explored the government-backed pay-as-you-go (PAYGO) business model in the solar sector. A new government digital payment strategy supported by UNCDF’s Better Than Cash Alliance, created a favourable environment for piloting and scaling solar PAYGO products.

In April 2020, Rekik’s company signed a Memoranda of Understanding with the state-owned telecom operator, Ethio Telecom, to make solar energy solutions available for customers living in rural, off-grid areas. Using a new PAYGO model named "SETT" (Solar Energy by Tele Transfer), customers can make periodic installments for solar products through Ethio Telecom airtime from their prepaid accounts. Customers can then use it for various activities such as lighting, water pumping, device charging, etc.

However, the project kick-off suffered a setback when COVID-19 hit. And when COVID restrictions eased, civil unrest in the country escalated, especially in some client communities Green Scene was reaching. As a result, Green Scene has lost some business and has had to adjust its focus areas.

Start-up Capital by UNCDF

This January, the UN Capital Development Fund (UNCDF) has extended financial support to Green Scene Energy through its Renewable Energy Project in Ethiopia. It has offered the company a US$40,000 grant to pilot and scale-up solar PAYGO technologies to enhance the adoption and utilisation of solar energy technologies in off-grid areas. The project is expected to ensure off-grid communities have access to affordable and reliable clean energy for household and productive uses.

UNCDF's support is critical because, despite Ethiopia's immense potential for solar energy, market penetration remains low. The country has the third-largest energy access deficit in Sub-Saharan Africa. More than half of the population is still without reliable electricity, worsening poverty and preventing far too many people from accessing their basic socio-economic needs .

The lack of financial services and access to banking that cater to the financing needs of rural communities can be a barrier to the uptake of solar energy products in the country. Also, despite the recent introduction of mobile money and digital payments, the supply and adoption of solar PAYGO products remain very low due to the perceived risk of the business model and lack of financial and regulatory support to energy companies. Currently, only a handful of companies are piloting PAYGO.

With the funding received from UNCDF, Green Scene Energy will leverage its existing partnership with Ethio Telecom to expand and accelerate the availability and affordability of PAYGO-enabled solar energy products to off-grid customers. A pilot targeting 1,000 households will hopefully pave the way to scale to 600,000 homes targeting 60 percent women across all regions of Ethiopia in phase two of the project.

The proposed solution, the solar kits, can be bought on installments. Customers will pay 20 percent of the product price at Ethio Telecom shops and receive their ready-to-use solar home system. They can then choose to purchase 1-, 7- or 30-days' worth of energy at a time. The remaining 80 percent of the cost is paid in periodic installments over the following twelve months by purchasing standard Ethio Telecom mobile airtime cards and transferring payments to Green Scene Energy through an SMS short code. Each payment serves as an installment with machine-to-machine technology, keeping the solar home system active if an installment is paid at least once per month.

UNCDF will engage with Green Scene Energy throughout the project, sharing expertise and making available market research and knowledge on customers' behaviour and market constraints to guide implementation. For instance, limited awareness about PAYGO products has resulted in mistrust and low uptake. Therefore, an intensive awareness campaign to improve knowledge will be critical.

Rekik represents the exciting and ambitious young talent in Ethiopia that will play a key role in advancing access to reliable and clean sources of energy – a shining example of a Women Builder of Ethiopia’s Digital Economy. UNCDF believes in building strong relationships with private and public stakeholders to reduce poverty and support local economies. UNCDF is also committed to helping to create Equal Economies.

So, through this pilot project, and eventually, at scale, UNCDF anticipates an acceleration of efforts towards the Government's ambition to electrify some 9.2 million households through solar energy technologies, particularly in unreached and underserved communities, working hand in hand with women leaders to create a more inclusive digital economy for Ethiopia.