Enter Energy: inclusive energy markets in humanitarian communities

The project is implemented by Mercy Corps in Ethiopia. It staryed in 2020 with the initial feasibility study and is now commissioning the first minigrid. 

Enter Energy brings affordable, renewable energy services to communities affected by displacements and the humanitarian agencies that support them. Displaced and hosting communities can shift away from short-lived, polluting energy sources while unlocking economic opportunity and better quality of life. Humanitarian agencies are incentivized to catalyze their decarbonization efforts, saving on energy costs and cutting their emissions. 

Through Enter Energy, we intend to demonstrate that humanitarian agencies and the private sector can collaborate efficiently to improve the quality of life of people affected by displacement while decarbonizing humanitarian interventions and offering quality energy services to enhance economic development. 

Main activities of the Good Practice

By entering into a strong partnership with a private sector energy company, Enter Energy bridges the decarbonization of humanitarian operations with the opportunity to bring renewable, reliable, and affordable energy in situations affected by displacement. This layers on awareness-raising activities supporting energy uptake to improve economic opportunities, promotes peaceful coexistence between refugees and host communities and strengthens the national renewable energy market. Through Enter Energy, our partner HumEn PLC navigated the newly released regulation on mini-grids, representing a key component of the GoE national electrification strategy. HumEn also directly engages with refugees and host community members on their aspirational uses of energy to inform the program's design. The systematic consultation process deepened the community's trust in Enter Energy and HumEn, and inspired a refugee-led community electrification committee that acts as a liaison with the wider community.

A key component of HumEn’s success in Ethiopia is providing energy to power humanitarian operations through a solar and battery-based system - replacing costly and polluting diesel generators with renewable energy-based solutions. Humanitarian actors lease a solar array from HumEn, which also manages operations and maintenance. Lastly, we support increased demand by increasing refugee and host communities access to credit to purchase quality energy products and services, and we de-risk the entrance of private sector actors in these fragile markets by creating guarantee funds.

Elements which helped facilitate the implementation of the good practice

The Government of Ethiopia is open to the integration of refugees into the national social fabric, which enables the implementation of longer-term humanitarian interventions. Enter Energy has benefitted from the strong relationships between the regional government authorities and Mercy Corps, enabling the development of a consistent exchange with refugee and host communities.

Moreover, our flexible catalytic funding has allowed Enter Energy to adapt quickly to the evolving context, enabling adaptive management of our funding while maintaining the program’s vision and goal. Strong partnerships with the private sector also allowed for a sound program design from the beginning.

Partners involved

• HumEn
• Energy Peace Partners

What challenges were encountered in delivering the project and how were they overcome?

Challenges

Before Enter Energy, no other private sector actors had tried to bring large-scale renewable energy services to humanitarian settings in Ethiopia. This is largely due to a challenging regulatory system (newly approved and never tested directive in place), a complex business environment for foreign companies due to forex issues and difficulty in repatriating profit, and a need for strong private sector renewable energy providers in Ethiopia.

It took a lot of work to shift the humanitarian response mindset that tends to see refugees as recipients of goods and services, not necessarily active agents of informed choices: when the norm is in-kind distribution, it is hard to explain market systems development.

While Enter Energy wants to bridge the need to decarbonize humanitarian operations by offering refugees and humanitarian agencies the choice of quality energy services, getting humanitarian agencies on board is very hard. Solar mini-grids require ongoing maintenance in addition to up-front purchasing and installation costs. Humanitarian agencies typically have a procurement process better suited for purchasing infrastructural assets rather than entering into leasing contracts.

The initial feasibility study for Ethiopia showed a clear demand for Enter Energy among the Refugee community. Refugee households frequently mentioned access to reliable electricity as one of their main priorities. However, it was essential to negotiate equitable services to nearby host communities to prevent conflict.

How they were overcome

Enter Energy applied an entrepreneurial mindset from the beginning and leveraged the expertise of local private sector partners and lawyers. We partnered with an Ethiopian engineering company to establish a private-sector energy company called HumEn PLC. Through HumEn, we set up the first commercial mini-grid license in Ethiopia, opening the way for the sector at large. Through HumEn, Mercy Corps and Enter Energy are filling a market gap in the humanitarian energy space by catering to humanitarian actors and refugee and host community clients.

In many ways, Enter Energy is an early pioneer in providing renewable energy in humanitarian settings. Our advocacy partners, the Global Platform for Action (GPA) and UNHCR Clean Energy Challenge are critical in encouraging new opportunities for collaboration with the private sector and the transition to renewable energy.

Financing also remains a barrier to transitioning to renewable energy in humanitarian settings. To address this, Mercy Corps is supporting the creation of a financial derisking facility to decarbonize humanitarian operations. Through the facility, private sector energy companies offer humanitarian agencies leasing and power purchase agreements. They will be able to see their investment derisked in case of default in the agreed-upon payments. In parallel, Enter Energy’s advocacy efforts promote best practices that could offer a concrete way forward to other agencies.

Enter Energy is built on Mercy Corps' excellent relationship with the communities where Enter Energy is present. To get key stakeholders and local gatekeepers on board, Enter Energy staff conducted numerous meetings with authorities and communities to explain the remit of the public utility vs. the Enter Energy one. In these meetings, they explained the economic benefits of providing clean, reliable electricity and the advantages of extending electrification to the nearby host community.

Results of the Good Practice

By February 2024, Enter Energy will be providing clean energy to more than 11,000 refugees and host community members in Sheder camp, located in the Ethiopian Somali region, with plans to bring solar mini-grids and energy services to two nearby refugee camps hosting a total of 126,000 people. Host communities and refugees have already started subscribing their businesses to be connected to the mini-grid in Sheder, spurring economic growth and peaceful coexistence. 

In what way does the good practice meet one or more of the four objectives of the Global Compact on Refugees?

Objective 1: Ease the pressures on host countries

In Ethiopia, Enter Energy relieves pressure from the GoE to electrify situations of displacement - also included in the National Energy Plan - and demonstrates the sustainability of innovative delivery mechanisms. This helps the GoE prioritize its resources to address the most urgent needs of the newly displaced and the most vulnerable while unlocking the economic potential of refugees to contribute to local economic development.

Objective 2: Enhance refugee self-reliance

Enter Energy layers on programming that explicitly looks at enhancing refugee self-reliance and improved relationships with host communities. Enter Energy fosters financial services that support acquiring energy-efficient appliances to create income while supporting more robust renewable energy markets. By increasing their spending power, refugees are less reliant on direct support from humanitarian assistance and become increasingly active agents in shaping their lives in their host countries. 

Next steps

Enter Energy developed an adaptable delivery model to meet the needs of varying contexts, infrastructures, and operating capacities. The current project will continue for an additional three years, and we have completed feasibility studies ready for investment in Uganda, Somalia, and Jordan. With further investment, we can bring access to renewable energy to more refugees and displaced people. 

Are there areas in which support would be required to continue and/or scale up your good practice?

While Enter Energy has witnessed the ongoing shift from direct delivery of humanitarian energy, agencies and organizations must continue the exchange over best practices for deeper partnerships with energy companies. This would allow sectoral experts to be part of the solutions that humanitarian settings need, ensuring quality delivery and protection of vulnerable communities. The alignment of the objective is already there, but the sector still needs clear procurement procedures and guidelines that would inform more effective implementation modalities. Mercy Corps is already developing a derisking financial mechanism to reassure vetted energy companies to enter long-term contracts with humanitarian agencies. However, increased collaboration and buy-in would be required to ensure that the mechanism is relevant and applicable for INGOs and UN agencies alike.