Request for Applications: Promoting the Productive Use of Energy in Malawi

By offering grants and business development support through its Results Based Finance and Business Development Services, UNCDF is dedicated to addressing market gaps that hinder productive use of energy (PUE) companies from expanding into untapped or challenging markets, thereby fostering a business environment that attracts further investment.

Area of intervention

• Results Based Finance for Productive use of energy
  • Challenges:
    • High upfront costs and affordability challenges due to unstructured distribution infrastructure.
    • Limited access to available technologies and appliances as most of the suppliers do not have a network of sales points but operate from a central point.
    • Non-existent manufacturing industry which poses logistical as well as forex challenges that companies face in an attempt to import PUE technologies
    • Low skills development with PUE supplying companies
    • Limited awareness of productive use of energy products.
  • Objectives:
    • to increase the adoption of renewable energy-powered productive use of energy systems and appliances amongst MSMEs. This will be done by supporting companies to introduce and expand the offer of PUE solutions and scaling up distribution structures and sales to MSME through incentives under the Result Based Finance (RBF) facility.
    • The envisioned outcome arising from the grant that UNCDF will provide to the successful applicants to this RFA is that economic growth will be catalyzed through financing by boosting access to climate-friendly technologies, and empowering MSMEs with energy solutions for enhanced productivity.
    • By integrating Productive use of energy (PUE) in agricultural value chains and small businesses, it should aim to foster job creation and inclusivity, particularly among women, youth, and people with disabilities, thereby fostering sustainable development.

Benefits

• UNCDF will provide performance based payment grants to the successful applicants who shall be formally engaged through the singing of a Performance-Based Payment.
• (PBP) Agreement with UNCDF, through this mechanism, the funding to the partners will be paid upon the verified achievement of an agreed and measurable development result. No advance payments will be made.
• UNCDF’s contributions will range from USD 95,000 to USD 150,000 per project for the selected applicants (up to 10) depending on the investment readiness level and sales outreach potential of the proposed solution for the deployment of productive use of energy. The Payments and disbursements for projects shall only be made in local currency.

Eligibility Criteria

• Entity registration
  • The lead applicant should be dully registered for-profit private company including social enterprises with a physical presence in Malawi and at least one operating year experience.
  • For-profit arms of not-for-profit organizations can also apply.
  • Other types of entities including last mile distributors, NGO’s and CBO’s in Malawi can apply as part of the consortium led by an eligible lead applicant.
  • International-based companies can apply if compelling evidence is provided that a partnership with a locally based company is in place to ensure sustainability (appropriate after-sales, maintenance and repair services, functioning guarantee processes, etc). The locally registered company should be the lead applicant in the consortium.
  • The applicant must have experience in the deployment of off-grid solutions and/or productive use of energy solutions in Malawi.
  • The lead applicant who is a member of the renewable energy industry association or any other associations in Malawi will have an added advantage.
• Consortiums
  • Applicants can apply only once under this RFA, whether independently or in a consortium.
  • Joint applications between market players in the Malawi are encouraged if the solution proposed will expand delivery networks and promote rural and/or other last-mile access to distributed solar powered productive use of energy technologies and appliances. For this purpose, the joint applicants must explain in full details how their consortium will achieve this.
  • Applications from consortiums of organizations must show that the partnership was established prior to this call for applications.
  • The lead applicant and their financial service provider partner must be registered entities with at least one year of operations, and must have statutory accounts and audited financial statements for at least one operating year.
• Productive use of energy solutions to be supported
  • Applicants must promote and distribute productive use of energy (PUE) solutions for commercial, agricultural and other businesses in off-grid areas, whose productivity and performance can be increased through an upscaling or new access to Solar-PV-based energy solutions and/or the introduction of electrical appliances for productive use of energy.
  • PUE technologies should be powered by solar. Examples of products to be considered include but are not limited to; DC Solar systems with energy-efficient appliances, AC solar systems with energy-efficient appliances and direct current (DC) energy-efficient appliances in case the customer already has a solar system.
  • The RBF facility will incentivize technologies that are VeraSol and/ or have undergone any testing deemed appropriate by GIZ and have at least a 2-year warranty period.

For more information, visit UNCDF.