Letters

Rural entrepreneurs in Uganda a model for clean energy goal

clean-energy

Summary

  • In Uganda, only 19 percent of the country’s rural communities have access to electricity, and less than two percent use modern cooking facilities.
  • Uganda's start-up scene is booming, but all too often, the benefits of clean energy don't make it beyond the nation's major cities or towns and the reason is often lack of access to stable funding.
  • Tackling climate change in Uganda provides essential lessons on how the continent can scale climate action and increase access to clean energy products.

It’s a little-known fact that Uganda is a hotspot of entrepreneurs. Uganda is brimming with an enterprising community ranked as one of the most entrepreneurial in the world. So as someone working in the climate space for 7 years, I didn't just see the climate talks in Glasgow as an opportunity to tackle climate change, but also as an opportunity for entrepreneurs to help Uganda leapfrog dirty fossil fuels.

This is particularly urgent for remote and marginalised communities that risk being left behind in the global clean energy transition.

In Uganda, only 19 percent of the country’s rural communities have access to electricity, and less than two percent use modern cooking facilities. But rather than rely on highly centralised dirty fossil fuels, there’s an opportunity to transition directly to clean energy.

At New Energy Nexus, there are lessons we’ve learned in the past five years that can help scale the clean energy transition.

Access to funding for rural entrepreneurs is crucial to unlocking innovation.

Uganda's start-up scene is booming, but all too often, the benefits of clean energy don't make it beyond the nation's major cities or towns and the reason is often lack of access to stable funding.

For instance, most villages are dependent on agriculture and are exposed to its climate change-induced seasonal challenges. So, if you run a shop and sell products there, you will have on average about six months of very good income and six months of very low income.

And yet there are fixed costs over the whole period: you pay rent and employees. This is how easier access to funding can help an entrepreneur.

However, funding for such initiatives is not easily available for rural farmers or individuals because of the conditions that come with acquiring the fund with the most common one being high-interest rates and collateral.

Increasing uptake of clean energy products depends on a bottom-up approach.

In rural Uganda, community-based organisations (CBOs) provide many essential services — supporting better health, education, sanitation and work for local people. We learned quickly that these organisations have the networks, trust, and community reputation to bring new technologies, such as solar lights, water filters, briquettes and clean energy cookstoves, to rural villages.

Their vital social role can be leveraged to increase uptake of renewable energy through retail and advocacy. It is these CBOs that understand the buying patterns of their customers by providing credit payment facilities like installments payment. It is not just CBOs that can drive.

Uganda, like much of sub-Saharan Africa, is home to tens of thousands of village-level nonprofit groups like farming groups and SACCOs that are typically self-organised and self-managed.

Skills training is as important as technology and hardware. Providing loans and hardware is only one part of the solution. Developing skills to run a business and maintain the products are essential of the clean energy transition.

Tackling climate change in Uganda provides essential lessons on how the continent can scale climate action and increase access to clean energy products.