The LEAD and DECIM projects in Madagascar need adjustments to address affordability and ensure a sustainable off-grid solar industry

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This blog was published on 5 July 2024.

Over the last decade, GOGLA has enjoyed a strong partnership and collaboration with the World Bank, other development partners and various national governments on a shared ambition to achieve Universal Energy Access for All (SDG7). This has been built around a shared recognition of the need for a vibrant sustainable private sector working alongside public sector and development partner efforts if SDG7 is to be realized.

GOGLA and its members fully support the goal of universal electrification in Madagascar and commend the ambition of the World Bank-funded LEAD and DECIM projects.

However, we have strong concerns that the current programmatic approach of distributing 1.2 million solar kits free of cost will damage the development of a sustainable, long-term energy sector and undermine the efforts to achieve universal access in Madagascar. Our specific concerns include:

  • Off-grid solar products need a viable after-sales service and support mechanism to ensure beneficiaries and end-users receive the service they need and that confidence in the products is retained. The lack of mechanisms to ensure the servicing of products, replacement of parts, customer care, and management of end-of-life products is a major concern. This will undermine the impact of the program and risks high dissatisfaction among beneficiaries.
  • Lack of clarity on how the target beneficiaries of the program will be selected and what measures will be in place to avoid leakage from the intended beneficiaries into the commercial market goes against core principles learnt by all actors across different markets in the past decade. This risks spoiling the commercial market and hampering efforts to provide access to the remaining population of Madagascar that is underserved.
  • A global procurement and supply contract to a single provider coupled with free handout distribution undermines the private sector currently working in the country, impacting jobs and other economic gains from having a vibrant private sector landscape. Approaches that establish collaboration with local industry should be adopted.

Additionally, reviewing the technical specifications in the recent tender by UN-Ops, we have noted problematic deviations from the established international best practice of quality assurance that exclude most, if not all, of the leading products currently available today; this is likely to raise costs, reduce quality, and limit choice.

We have engaged with our Members in Madagascar who share these concerns. As the off-grid solar industry association, we have:

  • Engaged with the World Bank to reaffirm that market-based solutions are more sustainable.
  • Engaged with the Government of Madagascar to reaffirm our support for their ambitions and to explore alternative approaches that secure Madagascar’s goals on access, employment and investment.
  • Written formally to the World Bank, and UN-Ops to profile concerns, recommend urgent corrections and propose alternative approaches.

We will also be sharing case studies and data from successful subsidy programs in other countries that should inform the design of future ones. These should address the key constraint of affordability, supporting customers with Tier 1 products in a way that they can access larger products and productive use solutions that help them move up the clean energy ladder.

We look forward to working with key stakeholders to explore how the program can be adjusted to best meet our shared goal of reaching energy-poor communities while building lasting clean energy infrastructure.

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