Access to electricity — Why do NGOs fail?
In my last post, I told you that I was on a mission to provide electricity to the remotest villages in Africa and shared my Manifesto. One passage in it shocked some people that I actually like, so let me explain in a bit more detail here.
For decades, NGOs have tried to solve this issue. But the number of people lacking electricity has not decreased.
Today, worldwide, 1.3 billion people live without electricity. Most of them are located in rural areas, far from national electric grids. They are isolated and hard to reach. As a result, they are usually left out of state policies regarding electrical grid extensions.
Until today, this issue has been addressed mainly by non-profit organizations, a.k.a. NGOs. Don’t get me wrong, I never said NGOs sucked. That would be insane! (Well, yes, some are bullshit, but that’s not what I’m talking about today.) I am talking about the good ones, those that have contributed to changing the lives of millions of beneficiaries through a lot of successful projects. As a matter of fact, I myself have been hugely inspired by their work.
But these organizations face many challenges. The major one is that they have inherently limited resources, which prevent them from having a truly meaningful impact given the scale of unmet needs. Increasing the scale of their projects would require a corresponding increase in their funding, which is extremely difficult to achieve within a philanthropic paradigm.
Consequently, the number of people lacking electricity access remains extremely high. According to IEA forecasts for sub-saharan Africa, this number is unlikely to decrease in the future because new connections will be offset by demographic growth.
Just because NGOs aren’t winning doesn’t mean they are doing a bad job. It just means the problem is too big, despite all of the amazing projects and innovations, and the millions of lives they’ve changed.
Incidentally, have you ever seen an NGO that ends up putting itself out of work? I haven’t. But I think we can agree that should ultimately be their goal. Essentially, I’m saying that NGOs win battles but they are failing because they can’t truly win the war. My friends working in NGOs know what I mean, but I can rephrase it so that it is clear for everyone:
NGOs ARE OUTGUNNED
For decades, NGOs have tried to solve this issue. But the number of people lacking electricity has not decreased. An entrepreneurial approach can change the game.
And that is the good news that I believe in, the idea that entrepreneurship can make a big difference.
As of today, electricity can be supplied to isolated communities in a sustainable and profitable manner. Declining costs of renewable technologies over the past decades have made market solutions affordable to even the poorest, who currently spend a fortune (up to 30% of their income) on energy costs. Power:On is the proof of that, even if up until now it could essentially be called philanthropy (I’m not making a cent at this point, indeed, quite the opposite…).
An entrepreneurial approach is the way through which we can solve the electricity access problem over the next decade. The reason may appear cynical, but profitability means that people with large amounts of money will start to care about the problem, not leaving it just to those who are completely dedicated to making the world a better place. As it turns out, people with a lot of money care more about making the world a better place if they can make a profit on it in the process…
I think that’s how the world works. NGOs show the way until the market is confident enough to take over and efficiently scale solutions. In some areas that may never happen: I don’t think there will ever be a market for human rights, justice, and a lot of humanitarian causes for which NGOs are absolutely indispensable. But it is now certainly the case for electricity access. Right now we are in the transition phase. I’m working hard to push through to the next steps.