Energize the BoP! - Energy Business Models for Low-Income Markets

Project Context

Access to reliable, affordable and clean energy sources is a main prerequisite for economic growth and climate protection.

• Access to clean and affordable energy is important for economic and human development. Reliable energy supply can boost the productivity of micro-enterprises. It also helps to save time: Three billion people use wood for cooking and heating. Collecting wood takes a lot of time that could be used more productively. Bright, electric light enables people to work and study after sunset.
• Many people in developing countries do not have access to clean and affordable energy. 1.6 billion people have no access to electricity. Energy from kerosene or batteries is expensive. In fact, people in rural areas often spend half of their income on energy. Moreover, burning kerosene produces unhealthy fumes that cause about 1.6 million deaths per year.
• Sustainable energy consumption is essential for resource and climate protection. Energy consumption is increasing rapidly in developing countries due to rising economic activities and growing populations. Carbon emissions contribute to climate change, while deforestation lowers nature’s capacity to absorb CO2. Desertification and loss of biodiversity are further negative effects.

Technologies that enable energy access for low-income markets in developing countries while saving natural resources are available. What is missing, however, are business models that can deliver access and service profitably. This is where the sector study and workshop aim to make a contribution.

Project Objective

The objective of the project is to enable companies through know-how to develop sustainable energy business models in low-income markets.

The study will identify promising options for establishing energy business models by looking at a wide range of existing documented cases and analyzing 30 of them in depth. The research focuses on the interface of the business with the customer from marketing and sales to the end-of-life phase.

The two main questions are:

• Development process: what steps should be taken to develop an inclusive business model? What are success factors and challenges in each of these steps?
• Solutions: which elements like sales or billing are important for the customer interface? What are the challenges for companies in these processes? What promising options exist to organize these processes?

The results of the study will be captured in a practical tool. The ‚Inclusive Energy Business Model Generators’ will provide various design options for each of the business model elements. The tool can thus be used as a framework to develop new business models.

Project Output

The results will be published in a printed study (about 40 pages, in English). They will also be the basis for a practitioners workshop.