Mini-grids ready for primetime, lack support: report

A new EEP Africa study of dozens of projects says renewable energy mini-grids in Sub-Saharan Africa are generating high-quality grid power, providing 24/7 electricity services, creating jobs and boosting local economies

NAIROBI, September 12, 2018 — Today, the Energy and Environment Partnership Trust Fund (EEP Africa) released a new report, “Opportunities and Challenges in the Mini-Grid Sector in Africa.”  It found that despite improved economics, mini-grids still struggle to receive the financial and regulatory support needed to scale.

 According to an analysis of EEP Africa-funded mini-grids in East and Southern Africa:

  • mini-grids on average create 306 new connections per project
  • connection costs are as low as EUR 200, much less than centralized grid extension
  • mini-grids deliver annual savings per household of EUR 93
  • an average of 36 direct jobs are created per mini-grid project

 “The continuous improvement of mini-grid cost structure presents an opportunity for financiers,“ said Wim Jonker Klunne, EEP Africas Lead Coordinator. “Mini-grids can also transform rural villages into local business hubs, and spur local economies by focusing load on agro-processing or social facilities such as schools or hospitals.“

Smart metering, remote asset monitoring and pay-as-you-go technology platforms have significantly improved mini-grid operational efficiency, the report said.

Despite the enormous potential, however, the report found that mini-grids still lack the regulatory and financial support needed to scale.

EEP Africa called on governments to include mini-grids as part of national electrification plans, establish clear permitting and licensing processes to reduce costs for mini-grids developers, and embrace public and donor capital such as results-based financing (RBF) and low-interest loan facilities to mobilize capital and spur mini-grid development.

The International Energy Agency (IEA) has said that mini-grids have the potential to serve as many as 450 million people currently without access to electricity if supportive policies and finance are in place. Mini-grids and other distributed renewable solutions are the least cost option for three-quarters of all new connections needed in Sub-Saharan Africa, where more than 600 million people still lack basic electricity, IEA adds.

Download the Full Report here >>

About EEP

The Energy and Environment Partnership covering Southern and East Africa (EEP Africa) is a multi-donor fund providing early stage grant and catalytic financing to innovative clean energy projects, technologies and business models. EEP Africa is hosted and managed by the Nordic Development Fund (NDF) and, since 2010, has received funding from Austria, Finland, NDF and the UK. The next major EEP event is a mini-grid-themed Knowledge Exchange Forum planned for Rwanda Energy Week in Kigali on November 9.

 Media Contact

William Brent, william@powerforall.org, +34 684 314 268

EEP Mini-Grid Study launch event on 12 September in Nairobi

Challenges and Opportunities in the Mini-Grid Market – Findings from the EEP Africa Portfolio

EEP Africa, in close collaboration with Power for All, will launch an in-depth study on mini-grids based on findings from the portfolio of pioneering mini-grid projects receiving support as part of the EEP Africa mandate to provide early stage grant and catalytic financing on competitive basis to innovative, private sector-led clean energy projects in Southern and East Africa.

EEP Africa has provided more than EUR 7 million in direct early stage and pilot financing to mini-grid projects in Southern and East Africa. The study highlights findings from these active projects and provides a key learning tool for the growing sector.

The context for mini-grid development varies between countries. The study identifies gaps in the policy and regulatory framework, highlights available support to the sector and specific successes from the EEP Africa portfolio, while at the same time cites persistent challenges to the growth of the sector including barriers to access to market data, lack of proven business models and insufficient coordination among key stakeholders in the power sector as well as with and amongst donors.

Launch of the study and an active panel discussion with key partners and project developers will take place during the Future Energy East Africa Conference in Nairobi on 12 September at 11:30-13:00. The event will take place in the Technical Workshop area on the exhibition floor and is accessible to all. See the updated list of panelists in the Technical Workshop Programme and register for a free visitor pass that gives you access to all of the technical workshops over the course of the two days, 12 to 13 September.

The report will be published on the EEP website after the launch. If you wish to receive a copy directly to your mailbox, please submit your contact details here.