81320071-Provision of Business Development Services (BDS) to Clean Cooking and Solar PV Companies in Mozambique

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Mozambique faces major challenges in achieving universal energy access. Only about 49% of the population is connected to electricity, with rural access below 10%. Most rural households still depend on firewood and charcoal, causing health problems, deforestation, and gender inequality as women and children are mainly responsible for collecting biomass. Grid expansion has been slow, making off-grid solutions such as solar home systems crucial for last-mile communities. Yet, small and medium-sized enterprises (SMEs) in this sector face difficulties scaling their businesses, hindered by limited planning, weak financial systems, and poor distribution networks. To respond, the Government of Mozambique has launched an Energy Transition Strategy (ETS) to build a sustainable, inclusive, low-carbon future. It focuses on universal access, renewable deployment, energy efficiency, resilient infrastructure, and a just green economy. These priorities align with the BMZ-funded Programme Supporting Climate Policy and the Energy Transition in Mozambique (PCTE), which strengthens institutional capacity, supports the National Development Strategy 2015-2035, and contributes to Mozambique's updated 2025 Nationally Determined Contributions (NDCs). The PCTE has four outputs: (1) and (2) focus on NDC and adaptation planning, (3) builds capacity of institutions to implement the ETS, and (4) addresses energy access. Output 4 combines results-based financing (RBF) with targeted Business Development Services (BDS). The RBF component is channeled through the Fund for Sustainable Access to Renewable Energy (FASER), created in 2019 and managed by the Foundation for Community Development (FDC). To date, 17 solar PV, irrigation pump, and clean cooking companies have received support. Complementary BDS, delivered by GIZ, is intended to strengthen SME capacities, provide training and mentoring, and where relevant, support infrastructure upgrades for clean cooking companies. Through grants, GIZ will also support biofuel cookstove companies, and through Stichting Practica, the solar irrigation value chain. This builds on EnDev's 15 years of experience in Mozambique. EnDev, a multi-donor programme funded by BMZ, the Netherlands, NORAD, and SDC, and implemented by GIZ, promotes access to modern renewable energy for low-income households, SMEs, and social institutions. It combines financing, technical assistance, and market development, helping companies grow. However, despite these efforts, SMEs still struggle with financial management, digitization, customer systems, and last-mile distribution. PCTE Output 4 therefore aims to help at least 12 companies prepare financing-ready proposals by September 2027, boosting investor and donor confidence. The objective is to strengthen SMEs' business models to become demand-driven, gender-sensitive, and climate-friendly. Beneficiaries include formal and informal SMEs, start-ups, cooperatives, and enterprises in Maputo and underserved provinces.

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