While AREED’s first phase showed that an appropriate combination of enterprise development support (practical advisory services) and seed financing (in the form of loans), can be effective at expanding energy access, it also demonstrated that this is often not enough to encourage entrepreneurs to focus on rural markets. Without financial incentives, it was often difficult or impossible to overcome the barrier of upfront payment required from end-users for the relevant products and services.

The second phase of AREED (AREED II), financed by the Swedish International Development Cooperation Agency, is addressing this problem by leveraging additional financing from local banks and microfinance institutions to support rural end-users., Consequently the programme is reaching deeper into rural markets that commercially-oriented enterprises usually seek to avoid due to the associated risk and perception of unlikely returns on any investment. Through AREED II, selected local organizations seeking to set up social enterprises in rural areas receive EDS and targeted grant support.