Recommendation 24

HM Government · verbatim extract Accepted in Part

Partially Agree 54. The FCDO’s Research and Development ODA portfolio leverages UK scientific, engineering, business, and financing strengths to deliver practical, scalable innovations that address global development challenges. These include low-cost technologies and business models that help some of the poorest and most remote communities in the world to access clean energy. We have seen good success with some of the innovations supported under the Ayrton Fund in the last period, particularly the TEA and MECS programmes, which are moving to scale-up investment from FCDO-backed instruments and private investors. This includes Sheffield-based MOPO, which recently raised more than $7m from BII, raised additional investment from Octopus, and more recently partnered with International Finance Corporation (IFC) to extend its battery-as-a-service model in Africa, which has already delivered more than 30 million battery swaps across 7 African countries. Clean cooking innovators such as BURN and ATEC have also started to scale, raising significant investments from other funders, although not yet UK-backed instruments. 55. We agree on the importance of making transitions from R&D, to Demonstration, to at-scale investment more systematic, as well as accelerating and multiplying those transitions–including increasingly with locally-led solutions and UK-southern partnerships. We are developing a number of tools to help join up assessments and decisions between programmes and instruments, including a form of Customer Relationship Management (CRM) system giving our programmes and partners better visibility of interactions and ongoing due diligences for example with individual innovators and businesses – which we would hope in due course to also extend to other development partners and investment funds. The TEA programme has also convened a Venture Facility Steering Group consisting of representatives of many of the investment instruments as well as the Tier 1 innovation partners, with a view to improving the co-ordination and flow of information, identifying gaps and disconnects in the continuum of capital, and filling these gaps as necessary. 56. However, we acknowledge the concerns around overreliance on innovation and share the view that risks must be managed effectively. To mitigate these, we will balance innovation with proven approaches, embed local ownership and co-design to ensure relevance and inclusivity, strengthen risk management and adaptive programming to respond quickly to underperformance, and invest in enabling environments and capacity-building so innovations complement strong systems rather than replace them. 57. While we recognise the benefit of increasing investment in the operationalisation of existing, effective energy solutions, at this stage, we are unable to make firm commitments to any programme or policy beyond FY25/26. However, we commit to bearing the recommendation of the Committee in mind in allocations. (Recommendation 14, paragraph 78) The Government should, where appropriate, work with ODA-recipient governments to develop policy, regulatory frameworks and viable, scalable models that enable community energy projects, drawing on UK expertise. Government Response: Agree 58. The FCDO agrees with this, and it is an area of work we already offer through our ICF Technical Assistance work. FCDO works closely with DESNZ and UK industry to incorporate lessons learnt from the UK’s own transition story. For example, our Green Cities, Infrastructure and Energy Programme (GCIEP) works with UK energy regulator Ofgem to deploy Technical Assistance in developing countries. FCDO also have significant support across our investment programmes and the grant programmes, and we have comprehensive activity to catalyse private sector investment, where there is a strong focus on technical assistance and policy, creating the right regulatory environment. 59. The Climate Compatible Growth (CCG) research programme works to ensure that community energy needs are factored into national energy planning and policy, by empowering local stakeholders with the tools and evidence needed, and through contribution to policy processes, for example the Decentralised Energy Planning Guidelines recently presented to Zambia’s Ministry of Energy. 60. UK PACT (Partnering for Accelerated Climate Transitions)’s energy programming has helped institutionalise county energy planning, influenced national clean cooking policy implementation, and built foundational tools for better Green House Gas accounting in the power sector. Government counterparts like the Ministry of Energy and Petroleum and county governments have increased capacity to plan, model, and finance low-carbon energy systems. 61. We have also supported community-scale mini-grid policy and regulation work with the Governments of Sierra Leone and Mozambique. For instance, the Rural Electrification in Sierra Leone programme delivered solar and battery-based village mini-gri