AMG-CoP: 2019 Highlights and 2020 Priorities

AMG-CoP: 2019 Highlights and 2020 Priorities 7000 4669 aflp

AMG-CoP: 2019 Highlights and 2020 Priorities

Scaling Mini-grids Through Government-to-Government Collaboration

2019 was a big year for the African Mini-Grids Community of Practice (AMG-CoP). This coalition of 16 African member governments advanced key objectives across 5 priority areas of work all focused on fostering African leadership that supports mini-grids as a key energy access and economic development solution. The AMG-CoP is centered on empowering government leaders through peer engagement and knowledge exchange, with targeted expert input on key topics of interest identified by members. In 2019, the AMG-CoP: 

  • Called for Scaled Action and Support for Mini-grids in Africa: Members issued a communique at the 5th AMG-CoP meeting in Berlin, Germany, that called on governments, the donor community, philanthropists, and the private sector to increase action on Sustainable Development Goal (SDG) 7 and work towards meeting Nationally Determined Contribution (NDC) targets for the energy sector in African countries. The communique highlighted the role of high-level political engagement and country-to-country exchanges, training, and technical collaboration as well as for needed support for accelerated work on access to international climate funds, support for local public and private finance mobilization, and finance de-risking strategy development and deployment. 
  • Engaged Across Governments and with the Private Sector: The Governments of Nigeria and Ethiopia conducted bilateral diplomatic and technical exchanges on mini-grid policy and regulatory frameworks with in-county meetings and site visits. These exchanges were highly successful and addressed core issues the governments are grappling with in their mini-grid deployment strategy including: policy and regulatory frameworks, tariffing structures, subsidy and ownership models, the importance of productive use, community engagement strategies, and incentive schemes. These government-to-government exchanges were identified as highly valuable in increasing internal government support and buy-in for integrating clean energy mini-grids into electrification efforts.  
  • Learned from Experts and Each Other: Members engaged in deep-dive, in-person training and exchange on mini-grid financing strategies, including blended financing strategies, access to international climate finance resources, public-private partnership models, and private capital mobilization strategies. The finance-focused work also explored the linkages between policy and regulation and finance mobilization and included targeted public-private dialogue on financing strategies and issues.

Looking Ahead in 2020: Scaled Resources Will be Required  

While investments from public and private sources in mini-grids are on the rise, the pace and magnitude of financing available is far below what is needed to scale the sector and achieve the UN SDGs.

The World Bank’s ESMAP programme estimates that “achieving universal access by 2030 will require the construction of more than 210,000 mini-grids globally, connecting 490 million people at an investment cost of almost $220 billion dollars.” To meet those targets nearly 21,000 mini-grids and more than $20 billion in investment — per year, every year — for the next decade will be required.

Current mini-grid deployment figures are pacing well below that, with only 7,500 mini-grids currently being planned across 57 countries with only $12 billion of investment slated. While the majority of those — nearly 4,000 — are being planned in Africa, only two countries, Nigeria and Senegal, account for half of that number.

Mini-grid development in Nigeria and Senegal represents important bright spots, but a network of developers, financiers and supportive regulatory structures across Africa will need to be rapidly developed and scaled to advance at the pace necessary to meet the SDGs. Significant progress has been made in a number of countries across these fronts that can be leveraged and built upon as new countries step up to the challenge and move to integrate clean energy mini-grids into their electrification efforts.

AMG-CoP 2020 Finance Priorities

The AMG-CoP member countries are ready and have identified finance mobilization as a key area of work. Finance-specific work in 2020 will focus on: 

  • Reducing Risk: Exploring mini-grid finance risk mitigation through hybrid ownership models, innovative business models and blended finance, with a particular focus on unlocking local capital sources and advancing direct community benefit, leveraging lessons learned from across the globe. 
  • Learning from Each Other: Supporting further peer-to-peer exchange and engagement on mini-grid finance strategies across governments as well as with other key players in the mini-grid finance sector, including: banks, the private sector, international financial institutions, and philanthropy. 
  • Linking Energy Access and Climate Finance: Accessing climate finance for mini-grid scale up in AMG-CoP member countries through climate finance mapping and identifying access channels and partners. More explicitly linking energy access and climate change mitigation and adaptation work, particularly in the energy sector, is a priority for member countries. To achieve scale, clearly integrating electrification and energy access efforts into NDC implementation under the United Nations Framework Convention on Climate Change (UNFCCC) and their associated sources of funding and technical support will be necessary.  
  • Harnessing Finance Innovation: Building on innovation in finance for mini-grid scaling through applied demonstration projects and programmes, including by working with the AMG-CoP members on innovative approaches to financing mini-grids, such as: blended finance, hybrid ownership models and public-private partnerships, crowdfunding, cryptocurrency, and other approaches. Member countries prioritized creating channels and pathways for innovative new approaches for energy access and clean energy mini-grid deployment to be piloted and scaled in their markets. 

2020 marks an important year in the march towards universal electrification and the AMG-CoP looks forward to further collaboration and partnership towards that end. 

To find out more about the AMG-CoP, please consult the concept note available here. If you actively work in the mini-grid landscape and would like to become a member, please contact the African LEDS Secretariat at AFRICASECRETARIAT@LEDSGP.ORG


Background

The African Mini-Grids Community of Practice (AMG-CoP) is a peer-to-peer working group for African government leaders committed to scaling up mini-grid policies and systems in their countries. The AMG-CoP is an initiative of the Africa LEDS Partnership (AfLP) supported by the LEDS GP Energy Working Group and LEDS GP Finance Working Group. This unique partnership is centered on peer-to-peer learning and knowledge exchange among governments, and a member-driven process. 
The goal of the AMG-CoP is to advance the application of mini-grids as a key energy access and economic development solution that assists countries in achieving their economic, social development, and energy sector goals, as well as their Nationally Determined Contributions (NDCs) under the Paris Agreement.

AMG-CoP: 2019 Meetings

AMG-CoP Meeting 5 – Berlin, Germany

The AfLP hosted a 2 day workshop for members of the AMG-CoP in Berlin on 10 – 11 June 2019. This crash course was delivered in collaboration with the LEDS GP Finance Working Group, the Energy Working Group, and NREL and took place on the margins of the Global NDC Conference.

This workshop brought together 15 participants representing 10 African countries including Côte d’Ivoire, Ghana, Kenya, Liberia, Nigeria, Zambia, Uganda, Cameroon, Tanzania, and Zimbabwe.

The objective of this workshop was to explore innovative business models for mini-grid acceleration in Africa. Day 1 kicked off with an overview of the various models for mini-grids: Public, Public-Private, Private, and Community-Owned. Proceeding this overview were presentations of relevant case studies, conversations and strategies on creating an enabling environment for productive end use, and a roundtable discussion on the importance of community engagement in the mini-grid development process. Topics covered in Day 2 included an overview of the mini grid finance landscape, peer-to-peer learning exchange report outs, crowdfunding opportunities for mini-grids, tools and resources for mini-grid scale-up, and a breakout discussion on key financing gaps in the minigrid market.

AMG-CoP Meeting 6 – Cape Town, South Africa

The AfLP hosted a crash course for members and non-members of the AMG-CoP in Cape Town on 13 September 2019. The crash course was delivered in collaboration with the LEDS GP Finance Working Group and NREL and took place on the fringe of the Global Climate Divest/Invest Summit.

The crash course brought together 21 participants from 13 countries comprising largely government officials, private sector representatives including the African Mini-Grid Developers Association (AMDA), and donor agencies.

The objective of the crash course was to focus on providing foundational knowledge on key aspects of the enabling environment for mini-grids to help new entrant countries evaluate, strategically plan and develop successful and sustainable mini-grid programs of their own.

Participants at the AMG-CoP Meeting in Cape Town, South Africa