Areed II Overview
African Rural Energy Enterprise Development Phase II (AREED II)
AREED II, a follow-up to UNEP’s African Rural Energy Enterprise Development (AREED) programme, seeks to expand energy access by helping people in rural Africa start income-generating ventures using modern, clean, and reliable energy technologies. While AREED showed that the combination of enterprise development support and seed financing can be effective at expanding energy access, it also demonstrated that this is often not enough to get entrepreneurs focused on rural markets. Without end-user financing, it often proved difficult or impossible to reach potential users who could not pay upfront for products and services. AREED II is addressing this problem by leveraging additional financing from local banks and microfinance institutions to rural end-users, and reaching deeper into rural markets that more commercially oriented enterprises tend to avoid. Selected local organizations seeking to set up social enterprises in rural areas receive enterprise development services and targeted grant support.
AREED II is composed of four components:
- The Enterprise Development Component, which provides technical support and grant funding to social enterprises, enabling them to implement financially sound energy services;
- The End-User Finance Component, which leverages financial services and makes them available to rural microfinance organizations, enabling them to engage in lending for energy-related income-generating ventures at the local level;
- The Policy Support Component, which provides governments with energy and financing information that can be used in decision making processes aimed at improving livelihoods and energy access in rural areas; and
- The Communication, Dissemination, and Outreach Component, which seeks to build awareness of the AREED approach and how it could be applied in other African communities. Interlinked to the three other components, this unit disseminates information and lessons learned to other parts of Africa where similar needs and opportunities exist.
AREED II is implemented by UNEP and funded by the Swedish International Development Cooperation Agency, Sida (www.sida.se).