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Scaling Up and Replication Studies 55
on the stage where the entity is, on its scaling up trajectory. Most of the times,
for private energy enterprises, scale up finance to operate commercially is found
lacking and it is here where these entities require support. Another critical
requirement is the finance for working capital that is required to manage day-to-
day operations. It is evident that grants have come to play a pivotal role in scaling
up and if administered well can even propel an entity’s growth (as seen in the case
of Husk Power). The other key learning as far as financial assistance to energy
enterprises is concerned is the need for ‘flexibility’. Flexibility is required in loan
repayment terms and in terms of the conditions that are tied to the debt provided
by financiers.
55 Performance milestones should incentivize the project developer to sustain a
project and scale it up. For instance, capital subsidies which are provided to project
developers only provide an incentive to build the micro-grid or solar power plant
and do not incentivize long-term operation. Capital subsidies provided to project
developers turn them to technology suppliers rather than serious investors seeking
to scale up the project and earn a return on their investment. An effective alternative
is performance-based subsidies. However, performance-based subsidies have not
been much experimented with. It is argued that subsidies, wherever necessary,
should be given related to the performance of the project implementing entity
so that scaling up strategy is in-built in the design, or should be completely done
away with as they have distortionary effects on the market.
55 Monitoring and evaluation of projects is a must for developing a scaling up strategy
or even evaluating whether a scale up is required. It is usually performed as a
compliance requirement in most donor funded projects without a clear evaluation
strategy. A set of KPIs should be clearly defined and realistically assessed before
deciding the scale up strategy.
55 Given all the elements of potentially scalable projects, a project/programme/
enterprise can end up having very different scaling up trajectories given the entity
or actor which is scaling it up, thereby underscoring the importance of an actor.
Evidence shows that government and private sector on their own have a medium
to high scalability potential, whereas NGOs because of their inherent structure
are not designed for large scale ups. These entities get to scale through different
agendas—mission, margin, and mandate as has been noted by a few researchers
and a mutual partnership results in the formation of hybrid entities, such as social
enterprises or Public–Private Partnerships. In the context of electricity access, it
is found that, be it private or NGO-led initiative, government support through
enabling policies, favourable regulatory regime, or a partnership with government
for implementation is essential to achieve scale. Private or NGO-led initiatives
cannot scale up on their own while excluding the government. At the same time,
on the stage where the entity is, on its scaling up trajectory. Most of the times,
for private energy enterprises, scale up finance to operate commercially is found
lacking and it is here where these entities require support. Another critical
requirement is the finance for working capital that is required to manage day-to-
day operations. It is evident that grants have come to play a pivotal role in scaling
up and if administered well can even propel an entity’s growth (as seen in the case
of Husk Power). The other key learning as far as financial assistance to energy
enterprises is concerned is the need for ‘flexibility’. Flexibility is required in loan
repayment terms and in terms of the conditions that are tied to the debt provided
by financiers.
55 Performance milestones should incentivize the project developer to sustain a
project and scale it up. For instance, capital subsidies which are provided to project
developers only provide an incentive to build the micro-grid or solar power plant
and do not incentivize long-term operation. Capital subsidies provided to project
developers turn them to technology suppliers rather than serious investors seeking
to scale up the project and earn a return on their investment. An effective alternative
is performance-based subsidies. However, performance-based subsidies have not
been much experimented with. It is argued that subsidies, wherever necessary,
should be given related to the performance of the project implementing entity
so that scaling up strategy is in-built in the design, or should be completely done
away with as they have distortionary effects on the market.
55 Monitoring and evaluation of projects is a must for developing a scaling up strategy
or even evaluating whether a scale up is required. It is usually performed as a
compliance requirement in most donor funded projects without a clear evaluation
strategy. A set of KPIs should be clearly defined and realistically assessed before
deciding the scale up strategy.
55 Given all the elements of potentially scalable projects, a project/programme/
enterprise can end up having very different scaling up trajectories given the entity
or actor which is scaling it up, thereby underscoring the importance of an actor.
Evidence shows that government and private sector on their own have a medium
to high scalability potential, whereas NGOs because of their inherent structure
are not designed for large scale ups. These entities get to scale through different
agendas—mission, margin, and mandate as has been noted by a few researchers
and a mutual partnership results in the formation of hybrid entities, such as social
enterprises or Public–Private Partnerships. In the context of electricity access, it
is found that, be it private or NGO-led initiative, government support through
enabling policies, favourable regulatory regime, or a partnership with government
for implementation is essential to achieve scale. Private or NGO-led initiatives
cannot scale up on their own while excluding the government. At the same time,
