Market assessment and financial schemes for sustainable cooling in Ghana and Senegal

Date: 14 June 2021
Market assessment and financial schemes for sustainable cooling in Ghana and Senegal

The ECOWAS Refrigerators and Air Conditioners Initiative (ECOFRIDGES) is a joint project of the Governments of Ghana and Senegal, the United Nations Environment Programme’s United for Efficiency (UNEP U4E) initiative and the Basel Agency for Sustainable Energy (BASE). In collaboration with regional and local partners, the replacement of obsolete cooling equipment will be promoted through financing mechanisms:  Green On-wage financing mechanism in Ghana and On-bill financing mechanism in Senegal. [1]

The ECOFRIDGES project was successfully launched in 2019 and extensive market assessments have been commissioned by UNEP U4E and BASE and conducted in Ghana and Senegal by local agencies.

Air conditioner and refrigerator market assessment in Ghana [2]

About 36% (2,581,275 in number) of households in Ghana owned a refrigerator in 2017 but very few households owned an air conditioner (AC). Based on industry data from Japan Refrigeration and Air Conditioning Industry Association (JRAIA), sales of room AC units increased from 84,000 in 2013 to 113,000 in 2018. Almost all of the room ACs sold were split systems. The demand for ACs is expected to increase by 23% annually due to the growth in middle-income households, urbanisation and the expansion of national electrification coverage.

Launch of Green On-wage  financing mechanism in Ghana

The Green On-Wage (GO) financial mechanism has recently been launched in Ghana to make ACs and household refrigerating appliances more affordable. The programme aims to entice the replacement of obsolete equipment by supporting the purchase of over 15,000 energy-efficient appliances by 2023. The programme will also include the proper collection and disposal of obsolete appliances, product testing, policy considerations, capacity building, as well as consumer awareness campaigns. It sets strict energy performance requirements and refrigerants limits for eligible appliances. [1]

As of January 2019, about 70% of household refrigerators in Ghana were obsolete (approximately 1.6 million second-hand household refrigerators along with 190,000 refrigerators initially bought new but installed more than 10 years ago). Similarly, there were about 12,000 second-hand ACs and 90,000 units installed more than 10 years since installation. Replacing obsolete ACs with units with higher EER in public and commercial buildings could save the country about USD 1.96 billion in electricity costs by 2030. [2]

Eligibility criteria for new appliances purchased through ECOFRIDGES GO are as follows: [3]

Air conditioner and refrigerator market assessment in Senegal [4]

According to Senegal's national statistics and demography agency (ANSD), 28.3% of households in Senegal owned a refrigerator in 2017 and 2.0% owned an AC. The estimated figures for 2019 were about 549,152 household refrigerators and about 46,085 ACs.

Launch of on-bill financing mechanism in Senegal

ECOFRIDGES has announced a partnership with local stakeholders in Senegal to provide an on-bill financing mechanism. Customers of the local utility, Senelec, will be allowed to repay preferential consumer loans for the purchase of certified models via their electricity bills. This programme will also include the self-sustaining collection and recycling of used devices, a systematic testing procedure for equipment to ensure advertised performance, as well as a consumer awareness campaign. ECOFRIDGES Senegal aims to release funding of USD 7 million to support consumer purchases of 20,000 eligible cooling devices by 2024. [5]

Over 70%  of household refrigerators have been purchased second-hand. According to the “Agence pour l’Economie et la Maîtrise de l’Energie” (AEME), replacing obsolete refrigerators with more energy-efficient models could save 19.8% of electricity consumption for Senegalese households by 2030. [4]

Sources

[1] https://energy-base.org/news/ecofridges-go-just-launched-in-ghana/

[2] ECOWAS Refrigerators and ACs Initiative (ECOFRIDGES) in Ghana. March 2020. https://energy-base.org/app/uploads/2020/04/Ecofridges-Ghana-Final-Market-Assessment-Report-23042020.pdf

[3] Product eligibility criteria. ECOFRIDGES Ghana. June 2020. http://www.energycom.gov.gh/images/ECOFRIDGES-Ghana_product-eligibility-Final.pdf

[4] Etude de marché des réfrigérateurs et des climatiseurs pour la faisabilité du projet ECOFRIDGES au Sénégal. Avril 2020. https://energy-base.org/app/uploads/2020/07/Ecofridges-Senegal-Rapport-Finale-Etude-de-Marche-version-finale-20200701.pdf

[5] https://united4efficiency.org/a-new-mechanism-to-facilitate-access-to-energy-efficient-and-environmentally-friendly-refrigerators-and-air-conditioners-in-senegal/

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