Terra Energy weighs in on what must happen next to make Results-Based Financing deliver for Sudan
By Dr. Mohamed Alhaj | Founder & Managing Director, Terra Energy
What’s the Big Opportunity in Sudan’s Energy Sector Right Now?
On June 2, 2025, the World Bank approved the ASCENT‑Sudan project—Accelerating Sustainable and Clean Energy and Digital Access Transformation in Sudan—a $76.3 million lifeline aimed at electrifying 150,000 people and deploying 500 renewable energy systems across Gadaref, Kassala, Northern, and River Nile states.
Implemented by the Trade and Development Bank (TDB), this initiative will use a Results-Based Financing (RBF) model to stimulate private sector participation in clean energy and digital infrastructure delivery in off-grid and fragile areas.
With the Expression of Interest (EOI) launched on August 22 and a submission deadline of September 12, 2025, time is of the essence for Sudanese solar companies.
Sudanese companies can express their interest from this link: https://odysseyenergysolutions.com/financing-programs/ascent-sudan-accelerating-sustainable-and-clean-energy-and-digital-access-transformation-in-sudan
Why This Matters for Sudan
Sudan’s energy crisis has deepened in the wake of the on-going war and electricity infrastructure experienced substantial damage with power being unavailable entirely or very intermittent in most cities.
The ASCENT project addresses this collapse head-on—targeting not just households, but also critical enablers of recovery: agriculture, telecoms, and public services. It offers a blend of emergency response and long-term resilience.
It also speaks to a deeper shift: the recognition that Sudan’s recovery will be private sector–led. For companies ready to deliver measurable results, this is a defining opportunity.
But, How Does Results-Based Financing (RBF) Actually Work?
At its core, Results-Based Financing (RBF) flips traditional donor logic: instead of paying for activities, it pays for verified results. Developers implement first—installing systems, connecting customers, or achieving pre-defined energy goals—and only then receive funding.
This model aims to:
- Encourage efficiency
- Reduce donor micromanagement
- Push companies to innovate
- Align funding with real outcomes
In theory, it sounds ideal. In practice—especially in nascent, post-conflict markets like Sudan—it’s anything but straightforward.
So, What’s the Catch?
While RBF can catalyze scale, experience from Benin, Togo, Madagascar, and Nigeria shows that three structural weaknesses often emerge—and they’re especially relevant for Sudan:
- Cash Flow Crunch: “Deliver First, Get Paid Later”
Most RBF schemes—like the Universal Energy Facility (UEF) in Benin—require full project delivery before any disbursement. This assumes that companies can pre-finance everything: hardware, logistics, installation, and staff. But in fragile economies like Sudan, where access to local credit is very limited and FX risks are high – compounded by the effect of the war – this model may end up excluding many companies.
Lesson: Staggered disbursements—at key milestones like delivery, installation, and connection—are essential to avoid collapse under cash stress. - Delays + Bureaucracy = Developer Death Spiral
Time is money—especially when companies are using borrowed capital. But almost every major RBF program in Africa has suffered serious delays due to: regulatory mismatches, overcomplicated licensing, slow fund disbursement cycles, and unclear roles between fund managers and TA providers.
These are the realities ASCENT-Sudan must anticipate—and avoid. - No Technical Assistance = No Local Success
In countries like Benin, Togo, Madagascar, where RBF programs for clean energy were implemented, one thing was clear: RBF fails without strong embedded technical assistance. TA providers local teams play a critical role in resolving licensing, coordinating stakeholders, and even training regulators. Sudan’s fragmented governance and post-conflict landscape requires a strong technical partner on the ground—not just for verification, but to accompany companies through the learning curve.
While Results-Based Financing can unlock access to finance and de-risk investment, it also raises valid concerns about market distortion. When subsidies drive prices artificially low or remain in place for too long, they can unintentionally undermine market sustainability. Companies may become dependent on grants rather than focusing on efficiency, and customers may develop unrealistic expectations around how much energy services should cost—making it harder to transition to market-based pricing later on. In such cases, subsidies risk crowding out non-supported companies, stifling competition, and delaying the emergence of a self-sustaining ecosystem.
However, in fragile, post-conflict contexts like Sudan, subsidies through RBF are not a distortion—they are a lifeline. The reality is that most end-users currently cannot afford the true cost of solar systems, and most local companies lack access to commercial finance. In this environment, RBF serves as a catalytic tool to kickstart recovery, improve affordability, and build the foundation of a functioning market. The key is smart design: subsidies should be targeted, time-bound, and gradually phased out as local capacity, consumer demand, and access to finance grow. Rather than replacing the market, RBF should help create one.
What Could Go Wrong — and What Needs to Go Right?
Terra Energy welcomes this bold initiative as a timely step toward rebuilding Sudan’s energy access landscape. However, turning ambition into impact will require thoughtful execution, grounded in local realities and designed to overcome well-known market constraints.
Here are our 4 key messages to ASCENT-Sudan:
1. Move Quickly — Delay Costs Impact
Given Sudan’s volatile environment, delays in execution of this initiative and funds disbursement could cripple project viability. Companies must bear upfront costs, so any lag in payout could make projects un-bankable. ASCENT-Sudan must commit to streamlined verification and fast-track payments.
2. Build Private Sector Readiness
Strong proposals win RBF, but many local companies—especially SMEs impacted by the war— are likely to face major hurdles in preparing compliant submissions, managing cash flow projections, and compiling the necessary documentation. Without dedicated support, many may still be left behind. That’s why early technical assistance, simplified templates, clear documentation of application processes, and hands-on support from qualified TA providers will be critical to leveling the playing field and enabling meaningful local participation.
Sudanese companies often lack exposure to the stringent environmental, social, and gender safeguards demanded by DFIs. Pre-EoI capacity building should help local companies understand and meet these expectations early on – especially since is the first RBF-program specifically for renewable energy in Sudan.
In addition, since many Sudanese companies are likely to face challenges in mobilizing upfront capital, it is advisable that ASCENT‑Sudan actively promote partnerships between local and international companies. Such collaborations could significantly enhance local companies’ ability to implement projects at scale.
3. Be Regionally Responsive
While ASCENT-Sudan targets four states, Khartoum State must not be overlooked. As thousands of people have already begun returning and even the federal government is in transitioning back to the capital, demand for reliable power and digital services is, and will continue, rising. ASCENT-Sudan can consider allowing case-by-case inclusion of additional regions—particularly urban and peri-urban zones with returning populations.
4. Speak Sudanese — Literally اتكلمو بالسوداني
If engagement is limited to English, uptake will be limited. Outreach, EOI materials, and future TA should be made available in Arabic, with an emphasis on clear, jargon-free communication. Also, local professionals should be involved in verification processes to strengthen ownership and speed.
How Is Terra Energy Supporting Local Companies to Respond?
To help Sudanese companies seize this opportunity, Terra Energy is launching 1-on-1 Business Clinic for Sudanese solar companies starting September 1, 2025.
These are free private 1-1 advisory sessions tailored to help solar and energy entrepreneurs:
- Prepare competitive submissions
- Develop bankable documentation
- Navigate compliance and investment-readiness
These sessions will initially be virtual and later expand to in-person meetings in various states in Sudan.
So, What Comes Next for Sudan’s Clean Energy Future?
RBF isn’t for everyone—but it is for those ready to lead. With the ASCENT-Sudan program, Sudanese companies finally have a pathway to grow, serve, and scale. But unlocking that potential requires speed, structure, and support.
At Terra Energy, we’re not just watching—we’re acting. Join us. Let’s power a more resilient Sudan, one connection at a time.
For collaboration and inquiries, contact Dr. Mohamed Alhaj at: mohamed@terraenergi.co
