Portfolio Learning

What long-term changes will Covid-19 bring for the Access to Energy sector?

The impact of Covid-19 on the Access to Energy (A2E) sector has been well documented, with multiple surveys identifying the negative impact on sales, disruptions in supply chains, increased risk in customer collections and the cumulative impact of these factors on working capital of A2E enterprises.

Enterprises have had to adapt and evolve operations to continue reaching the low-income consumers for whom energy access is vital as a means of easing hardship and alleviating poverty.

In 2020 we commissioned Palladium and Inclusive Growth Partners to engage across the sector and with the impact investor community to look at potential long-term, sector-wide evolutions that could result from the pandemic.

The report presents three likely scenarios:

  • Industry consolidation to promote both economies of scale and specialisation along the value chain
  • More sophisticated pricing strategies to extract additional value up the demand curve, where users of A2E services with capacity to pay more than low-income households are offered bundles or products at higher price points
  • Evolution in last mile solutions that take advantage of lower cost digital channels

The report outlines seven key capability areas that are expected to impact how value is delivered to customers, as well as an assessment of where the A2E sectors in India and Kenya are benchmarked today. The capability areas represent dimen­sions of competitiveness and are potential sources of strategic advantage and growth in the post-COVID business environment.

As well as identifying the long-term market impacts resulting from Covid-19 responses and investments being made today, this new report provides sector stakeholders, investors and A2E enterprises with a toolkit to understand how to plan for the competitive landscape that may emerge in the post-Covid environment.

Download the full report

We invite the sector to engage in the findings, provide feedback and undertake a self-assessment using the toolkit provided by this report to identify opportunities as the sector evolves post pandemic.