Is it really possible to leave no one behind in energy access?

Who’s left behind?

Despite significant strides toward universal energy access, millions of people still lack reliable, affordable energy. Those most affected include residents of displacement camps, urban informal settlements, remote rural areas, and fragile states — where access to clean energy is scarce. This vast underserved market presents significant opportunities for the private sector to step in and drive change.

A closer look at the numbers highlights the scale of this challenge—and the potential. In sub-Saharan Africa, rural electrification is just 30.7%, leaving nearly 500 million people without access to reliable ways to light their homes and cook. Across the continent, around 70% of the urban population lives in informal communities, and typically rely on unsafe and illegal electricity connections or polluting cooking methods. Around 970 million people in Africa still rely on open fires and inefficient stoves, the vast majority of which are in rural, peri-urban and informal urban settlements. Additionally, over 110 million people are currently displaced globally, many in low- or middle-income countries, in formal settlements or refugee camps, as well as in urban and informal settlements. In refugee camps, 81% of people still rely on firewood and charcoal for cooking, while 91% have no dependable electricity.

These communities often remain excluded from energy access due to a range of external factors. According to the UNDP, five key barriers cause and perpetuate this exclusion: discrimination, geographic isolation, socio-economic challenges, governance gaps, and shocks and fragility.

Tackling these challenges is both a humanitarian imperative and a business opportunity for those ready to invest in sustainable energy solutions.

Why clean energy Isn’t reaching everyone

Displacement settings, urban informal settlements, remote rural areas, and fragile countries present unique challenges as operating environments for energy companies — and solutions that work in one context may not be as effective in another.

Low quality housing and infrastructure

Informal settlements are often overcrowded and characterised by low-quality housing. There is a high occurrence of illegal connections and grid electricity theft in these settlements. The high population density makes it challenging to install or maintain infrastructure, and the provision of electricity is often difficult or dangerous due to unsafe building structures and hazardous internal wiring. Unstable roofs further complicate the use of rooftop energy solutions.

Lack of regulatory frameworks and documentation

Electricity utilities attempting to serve these areas frequently encounter low or negative returns, due to relatively low consumption and the high costs of electrification. Additionally, the informal nature of these settlements, with limited property rights and no security of tenure, means that potential customers often lack essential documentation, such as proof of address, making them ineligible for affordable credit-based energy services. The lack of regulatory frameworks governing these areas adds further uncertainty for energy suppliers.

Since settlements are not recognised formally and there are few property rights and no security of tenure, potential customers may lack the required documentation, such as an official address, for an affordable credit energy service. There is often a lack of regulation covering the settlements, exacerbating uncertainty for any energy supplier.

Geographic limitations

Access to humanitarian settings and rural areas is hindered by their remoteness, which raises the cost of delivering energy products and services. Poor infrastructure and limited telecommunications coverage in these areas also undermine the effectiveness of payment solutions like pay-as-you-go (PAYGO), which hinge upon reliable connectivity.

Transient population complexities

Compared to informal settings, recognised camps are typically highly regulated but come with their own set of challenges. The perceived transient nature of these populations makes it difficult to plan for long-term service provision. Factors such as the duration of geopolitical or security crises, refugees’ legal status, employment opportunities, remittance systems, and local market conditions all influence and complicate the feasibility of sustainable energy solutions.

High credit costs and biases

Income instability is a huge challenge in both urban informal settlements and displacement settings. Even when PAYGO models are available, many people are unable to afford them. These populations are often unbanked, leading to high credit costs due to a lack of credit history and the perception that they are high-risk customers. Additionally, there are misconceptions about affordable alternatives, cultural biases, and limited awareness of energy options.

Lack of growth potential

Relatively low energy consumption in these areas also makes them less appealing to businesses, which tend to focus on higher-income customers who offer greater profitability. Many companies, especially those seeking investment, need to demonstrate strong returns and growth potential, which drives them to prioritise customer bases that deliver higher margins with fewer complications.

Exclusion of low-income households

Ironically, as providers attempt to offer affordable credit and PAYGO solutions to low-income households, these capital-intensive systems can become a financial burden. This forces companies to target customers who are more likely to repay, effectively excluding the most marginalised and impoverished populations.

A way forward is possible

Despite these challenges, there is promising progress as more and more companies are finding ways to succeed in these difficult environments. Through innovative business models, emerging technologies, and strategic partnerships, they are demonstrating that it is indeed possible to deliver clean energy to underserved populations.

How are Energy Catalyst-supported companies stepping in?

Energy Catalyst supports such companies to scale by acting as a springboard for innovators to de-risk, accelerate growth, and demonstrate their clean energy solutions. Through financial and advisory support, and by building strategic partnerships and uncovering new insights, it supports the development of technologies and business models needed to realise a just and inclusive clean energy transition.

Zonke Energy is a South African company providing micro-grid solar electricity to informal settlements in Cape Town. Its modular solar-powered DC grids are designed specifically for crowded environments, each serving 16-20 households at a time. By allowing customers to purchase energy in small amounts via mobile money or vouchers, Zonke includes those who are unbanked or on limited budgets. The company works closely with community leaders and early adopters to expand connections. With support from Energy Catalyst, the company is now exploring opportunities to expand through government subsidies like the Free Basic Electricity (FBE) allowance. This follows the model used by iShack, a South African social enterprise that provides off-grid solar electricity to residents of informal settlements, which partnered with the government to provide solar home systems (SHSs) in one of Stellenbosch’s informal settlements.

Addressing the often-overlooked challenge of safe and sustainable heating for refugees and disaster relief, Mat Zero provides a solar-powered heated sitting mat designed for refugee families enduring harsh winters. Current heating methods in such settings are often dangerous, emitting toxic fumes and posing fire hazards, while also damaging the environment. Mat Zero has designed a solar powered heated sitting mat that provides a sustainable, safe and simple solution providing heat to refugee families. Extensive development has gone into creating an efficient heating element to keep costs low. Following consultation with NGOs to better understand their users’ needs, Energy Catalyst is supporting Mat Zero to refine its design and trial it over the winter months in Nepal. Looking ahead, Mat Zero sees potential in exploring more commercial markets, which could then help subsidise supply in the humanitarian market.

Who else is making a difference?

Several other key players are making a meaningful impact on energy provision in these challenging settings, including:

In collaboration with UNHCR, the private LPG company SONIHY has established a sustainable LPG market in Niger’s Diffa region, serving refugees, internally displaced people, and host communities. Initially, UNHCR provided 25,000 households with LPG cylinders, stoves, and first refills, while SONIHY invested in 30 new selling points. Even after the subsidy ended, 70% of households continued using LPG, and an additional 5,000 customers were recruited. The initiative’s success was due to LPG being cheaper than firewood and the inclusive approach targeting all three communities, plus strong buy-in from local leaders, communities, and the government.

ECOCA is another example of partnership and innovation, having established a foothold in refugee camps in Uganda. This company sells solar electric cookstoves and employs both refugees and host community members. By partnering with local retailers and village savings groups, they offer PAYGO services, allowing the company to extend their reach.

Founded by a Congolese refugee in Kenya’s Kakuma Camp in 2018, Okapi Green Energy provides solar mini-grid electricity within Kenyan refugee camps. Initially serving 50 businesses and 150 households, Okapi is now scaling up. With support from USAID, EDP, Mastercard, and GIZ, and in partnership with Renewvia, Okapi is expanding the solar mini-grid in Kalobeyei camp to 2.4 MW. Additionally, the venture is providing technical skills training to 750 displaced individuals, helping to empower the local population.

What’s the secret to their success?

By examining the companies that have made significant strides in energy provision within such environments, several success factors emerge:

1. Innovative technologies and new business models: For example, flexible billing systems, such as Zonke Energy’s pay-per-Watthour system, help make energy affordable to low-income households.
2. Strategic partnerships and leveraging existing networks and credit organisations: By collaborating with governments, international organisations, and local businesses, companies can create sustainable energy markets that benefit everyone. SONIHY’s partnership with UNHCR in Niger and ECOCA’s expansion through local networks demonstrate the power of strategic alliances in scaling solutions.
3. Carbon credits: For companies like ECOCA, carbon credits have been instrumental in making their clean energy products more affordable. This approach has been made more accessible with the approval of a new methodology, the Comprehensive Lowered Emissions Assessment and Reporting (CLEAR) methodology, combined with PAYGO and IoT technology. Other clean energy ventures, especially in the cookstove market, could benefit from this model.
4. Co-designing solutions with end-users: Involving communities in the design process ensures that products meet the actual needs of users. For example, Mat Zero works closely with refugees to tailor its solar-powered heating mats, making them more relevant and effective in addressing real-world challenges.
5. Matching products to market needs: Tailoring solutions to what local populations can afford is crucial; otherwise, commercial enterprises will flounder. Offering smaller, more affordable options, such as SONIHY’s introduction of 3kg LPG cylinders (as well as the standard 6kg), enables lower-income households to make smaller, more frequent purchases.
6. Local presence: Establishing a physical presence within or near refugee camps enables companies to be more responsive to local needs. Okapi Green Energy’s operations within Kenya’s refugee camps have allowed it to foster community involvement and ensure solutions are tailored to the local context.
7. Balancing customer segments: Mixing higher- and lower-income customer bases helps mitigate the financial risks of serving low-income populations. Companies like Envirofit achieve this by offering a range of products for both urban and rural markets, catering to different income levels. However, serving multiple market segments may not always be as efficient as focusing on a single, well-defined customer base.

Creating enabling conditions for broader impact

It’s important to recognise that many of these success stories were made possible by initial subsidies or de-risking mechanisms. Without such support, these ventures could have struggled to reach the most vulnerable populations. For widespread and sustained success, it’s essential to create conditions that allow both businesses and communities to thrive. In addition to continued technical and financial investment, several key actions are needed:

Developing supportive policy and regulatory frameworks: Governments must address the unique challenges faced in humanitarian settings and informal communities by integrating these populations into national energy strategies. Policies should be tailored to their specific needs, and disaggregating data on energy access can help set clear goals and track progress more accurately.

Aligning government and private sector efforts: Collaboration between the public and private sectors is critical for scaling energy solutions. Governments should work closely with businesses to create a coordinated approach, including offering incentives to companies willing to serve hard-to-reach or marginalised markets.

Providing impartial information on clean energy alternatives: Many low-income households lack awareness of clean energy options. By offering clear, unbiased information, governments and organisations can empower people to make informed decisions that suit their financial circumstances and energy needs.

Can we really leave no one behind?

The answer is complex. While some companies are making impressive progress, the scale of the challenge remains immense. However, the successes of companies like Zonke Energy, ECOCA, and Okapi Green Energy provide reason for optimism. With the right combination of support, innovation, strategic partnerships, and tailored solutions, we have seen it is possible to extend clean energy access to even the most challenging and underserved markets.

Resources for energy providers

Global Platform for Action on Sustainable Energy in Displacement Settings (GPA): Promotes sustainable energy services for displaced persons and associated humanitarian responses. It includes the Transforming Humanitarian Energy Access (THEA) programme which provides inclusionary analysis and evidence on the energy needs of all displaced people and SOLCO (Solar-Electric Cooking Partnership for Displacement Contexts), a platform for public-private partnerships to enable solar-electric cooking at scale across a number of refugee-hosting countries through localised market-based implementation that crowds in private sector solutions and climate financing. Visit HumanitarianEnergy.org for more information on these and other resources.

Humanitarian energy webinars: For insights and best practices, there are a number of good sources. The series Sustainable Energy in Humanitarian Settings, hosted on Energypedia, has extensive recordings. Also find recordings from Ashden here and Energy 4 Impact here.

For more on informal urban settlements, explore the work of ICLEI Africa, and check out the Mercy Corps initiative HumEn for energy provision in humanitarian settings.