USADF-All On Nigeria Off-Grid Energy Challenge, February 2019

The U.S. African Development Foundation (USADF), an independent U.S. Government Agency established by Congress to support and invest in African owned and led enterprises and ALL ON, an impact investing company established to stimulate the development of collaborative partnerships for innovative solutions that facilitate increased access to affordable, reliable and sustainable energy sources in Nigeria invites applications for:

Title: USADF-All On Nigeria Off-Grid Energy Challenge Background on the Off-Grid Energy Challenge

• The Nigeria Off-Grid Energy Challenge is a joint initiative of the United States African Development Foundation (USADF) and All On and is designed to achieve the following results:
  • To increase electrical generation to unserved and underserved communities through sustainable business model solutions;
  • To expand electricity access – delivered through off-grid solutions such as home systems or micro-grids;
  • To increase access to electricity for productive and/or household use - while this may include power to meet household consumer needs, emphasis is also given to the delivery of power to productive or commercial activities including agricultural production and processing, commercial enterprises, and others.
• The Off-Grid Energy Challenge is a key element of the Beyond the Grid sub-initiative of Power Africa, a U.S. Government-led partnership launched in 2013 to double access to electricity in sub-Saharan Africa by 2030 by increasing installed power capacity by 30,000 MW and creating60 million new connections. Of these targeted 60 million new connections, as many as 25-30 million are expected to be added through off-grid solutions.

Background On The USADF-All On Partnership

• All On is an impact investing company established to stimulate the development of collaborative partnerships for innovative solutions that facilitate increased access to affordable, reliable and sustainable energy sources in Nigeria. All On seeks both financial returns and social impact to provide or improve energy access for millions of households and small and medium enterprises. In December 2017, USADF and All On signed a Statement of Intent to combine their respective and complementary strengths and areas of expertise to fund companies with a combination of grant dollars and loans and/or equity investments.

Introduction

• USADF and All On are excited to request proposals for the USADF-All On Nigeria Off-Grid Energy Challenge. Proposals of up to US$100,000 in 50/50 blended grant/ debt or equity per award will be considered and approximately ten awards are anticipated.
• To be considered for the Challenge, applicants must be 100% African-owned, majority Nigerian-owned and -managed private companies registered in Nigeria and must be operating in Nigeria.
• Projects are to be focused on increasing sustainable energy access – specifically off-grid solutions – extending the delivery of electrification to un-served and underserved communities in Nigeria. The type of clean energy technologies to be proposed may include, but are not limited to, solar, hydro, wind, biomass, biogas, gas,and hybrid systems.

Winning applicants will receive:

• An investment in the form of a convertible loan at an affordable interest rate and/or an equity investment
• Seed capital in the form of grant funds
• Access to intensive local technical assistance and governance support

Eligibility Criteria

• USADF and All On will consider proposals from 100% African-owned and majority Nigerian-owned and Nigerian-managed companies. Passports or other government-issued IDs of owners and senior managers must be submitted with the applications. The companies applying must be for-profit enterprises and must not be government-owned or operated in any way.   Applicants may be developers of their own technology and/or may be acquiring and implementing technology developed elsewhere. Applicants need to be legally registered in Nigeria and demonstrate the capacity to track and manage the project resources and operate in good standing with the local governments in which they operate.

Winning proposals must:

• Propose a budget of no more than US$100,000. Proposals with budgets greater than US$100,000 must bring leveraged resources from one or more sources that meet the total financing requirements. Leveraged funds from other private sector and donor sources are encouraged.
• Demonstrate clearly whether and how many new connections will be added, as well as potential for future replication.
• Applications for projects/ businesses leveraging wind, hydro, biomass, and gas as the energy source are greatly encouraged.
• Further develop, scale up or extend use of proven technologies for off–grid energy in Nigeria.
• Benefit marginalized, or low income rural or urban populations currently underserved by utility companies, ideally with a focus on benefits to women and girls and operating in the Niger Delta.
• Demonstrate financial sustainability or the potential for financial sustainability. Theproposed investment period must include approximately three months of generation of electricity (or generation of energy) and revenue/cash flow from sales.
• Demonstrate a proven track record of experience or have project sponsors or partners with a proven track record of related experience.

Applications will only be considered if:

• They are 100% African-owned and passports showing citizenship are submitted:
  • All shareholders, members of the board and senior management must be citizens of a sub-Saharan African country and must reside in Nigeria;
• They are majority Nigerian-owned and -managed (senior managers);
• They express clearly how they will benefit marginalized, grassroots people in Nigeria, including also ideally showing demonstrable positive impacts for female beneficiaries and people living in the Niger Delta;
• They express clearly how they will achieve profitability;
• They are fully and legally registered in Nigeria and the registration is submitted;
• They document adequate expertise in the field they are proposing or document how they will acquire the necessary expertise;
• They plainly document how they will we use the USADF/All On investment funds to carry out their concept.

Proposals Winning proposals will do the following:

• Make clear any female ownership/management.
• Explain all tangible improvements to lives of women and girls, including whether and how company targets women for capacity building/employment.
• Make clear any current or planned operations in the Niger Delta.
• Make clear any specific innovations of the technology or business model, and what the energy source.
• Clearly state whether and how many new connections will be added.
• Include power for economic activities, for example small-scale value-added agriculture processing. The actual or potential business impact is to be addressed in the proposal.
• Demonstrate the potential for financial sustainability. Some measure of projected financial return on investment and payback period is to be included in an attached comprehensive five-year financial model in Excel format. The application must demonstrate the potential to operate as a commercially viable business.
• Be driven by demand: is the proposal meeting a clearly known and unmet demand?
• Preferred) Leverage financing from sources in addition to Challenge funds.
• Operate within Nigeria.
• Provide off-grid energy to rural or urban areas and populations currently lacking energy access. Distance of the site from the grid is to be included. An explanation on why grid connection is not feasible is necessary, including an estimate of the cost to connect to the grid. Best understanding of how long it will take for the area to connect to the grid to be stated. If the proposal is for an urban area or an area with grid connections, a justification is to be included.
• Focus on reaching un-served, underserved or marginalized populations.

The following technologies will be considered: Productive use:

• Off-grid energy solutions for mechanization of processes such as grain milling, oil expelling, refrigeration, transport, etc. Solutions are to explain clearly how they will be commercially viable. It is expected that use of the power will address a business solution(s) that will generate ongoing revenue and profits to sustain the enterprise. This must be clearly explained in the proposal.
• Mini-/micro-grids:
• Small-scale power generation systems which provide an alternative to, or an enhancement of, national/regional grid connected electric transmission.

Products/home systems:

• Products or systems installed directly in the homes of off-grid households, which supply energy directly to marginalized populations currently (and in the foreseeable future) lacking access to energy.
• Focus must be on distribution systems which are scalable and can be replicated, in addition to being affordable.

Innovations:

• Proposals need not necessarily be for power generation only – they may also include provision of innovative metering, payment systems or other enabling technology, especially if they are an innovation in Nigeria.  If it is an innovation, then a clear and simple explanation is needed of why the innovation is important and what it will do for the sector or the population.

Timeline

• Applications will be accepted from February 1, 2019 to March 15, 2019. Proposals received after the closing date will not be accepted.
• Applications will be reviewed and evaluated by a panel of judges with expertise in the field. Shortlisted applications will be contacted in April to begin the Phase II application process.  Those that scale through the Phase II process will be contacted in May and Junefor due diligence purposes and for clarification of project concept and details. Applications that are not shortlisted will not be contacted.
• Winners are expected to be announced by September 2019.

Application Deadline 15th March, 2019.

Note

• Proposals will only be accepted at the above email address.
• General inquiries can be directed to: [email protected] and will not be accepted at other email addresses