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Step 3 - Marginalised actors’ risk analysis

Engaging in new and more efficient ways of working within their current energy markets or starting work in new energy markets entirely often requires actors to take risks. This is typically significantly more difficult for marginalised actors as they often have access to only very limited resources, and either cannot, or will not, risk investing. This effectively excluded them from new income opportunities, which could help lift them out of their marginalised status. The following are some of the most important risks that marginalised actors typically face in a range of energy market chains:

  • Not being able to produce the quality and quantity of energy products or services required by other market actors or their potential customers on a sustainable basis.
  • Not having access to sufficient assets (land, property, financial resources, etc.) to sustain production sustainably.
  • Falling into a debt trap where they’re unable to meet the repayments on the debt they need to take on to develop their business.

As the facilitation processes outlined in each step of the roadmap takes place, including participation, engagement, collaboration, strategic planning and coordinated action, the perceived and real risks for the market actor’s change.

To try and help each marginalised actor overcome their inherent aversion to risk the market facilitator can carry out a risk analysis. This also helps the facilitators provide support as required, including designing targeted subsidies to help marginalised actors take on increasing levels of risks in a controlled way. The market facilitators can use the template in Annex 2 to carry out a risk analysis, to identify the following issues:

  • How the marginalised actors specifically perceive their poverty themselves. Although they may identify a lack of jobs or low-income levels as the issues impacting them, they may not understand the reasons behind this, such as a lack of skills or technologies, or the exclusion from economic, social and political processes, particularly important for women market actors.
  • How poverty manifests itself in the lives of each marginalised actor, such as a “lack of jobs” being manifested in people having to migrate leaving their families for long periods of time, often more difficult for women.
  • The impacts, including vicious cycles, of poverty on their lives, such as actors having to leave their families for work, contributing to their children regularly missing school decreasing their chances of finding good jobs in the future.
  • What they think are the main driving forces of their poverty and how they could be overcome including through their own actions.

As well as systematically identifying each of the main risks impacting each marginalised actor, it is also useful to assess the level of each risk, from low, medium to high. In addition, it is important to identify any activities for mitigating each risk – these can then start to be addressed by the marginalised actors themselves, or can be start to be overcome through the rest of the facilitation process.

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