Business and finance models for mini-grid development in Africa

Posted November 23, 2017 at 12:58

Africa LEDS Partnership’s Ameil Harikishun reports back from the second meeting of the Africa Mini-Grids Community of Practice.

The Second Meeting of the Africa Mini-Grids Community of Practice (AMG-CoP) took place on 3rd October 2017 in Abidjan, Côte d’Ivoire, the day before the official AfLP Annual Event programme commenced. The focus of the meeting was on discussing bankable business models and accessing finance for mini-grid development in Africa. These topics arose from identified priority areas in the inaugural meeting, which took place in Cotonou, Benin, in June 2017. The second meeting aimed to address these initial priority areas and engage further on the proposed 2018 workplan, honing in on activities and resources required for implementation.

The programme proceeded with in-depth country case studies, during which member countries delved into their national context, progress and challenges in more detail. This allowed for a critical discussion by all members and led to detailed conversations on tariff structuring, balancing pro poor aspects of projects with financial viability, the importance of an enabling regulatory environment and the role of the private sector. Countries that are further along in the process of rolling out mini-grids provided valuable insights, such as the importance of understanding the communities that will utilise the mini-grids and the need for a pro poor approach with mini-grid policy.

The rest of the day was dedicated to understanding the perspectives of private sector project developers and NGOs. Private sector developers from Ethiopia, Uganda and Nigeria gave presentations, along with an NGO working in Sierra Leone. The project developers emphasised the need for a transparent and predictable regulatory environment, and the role that government has to play in supporting the implementation of mini-grids. The country representatives emphasised the need to include more private sector developers and NGOs in the AMG-CoP, as their involvement is critical to the scaling of mini-grid implementation and understanding the challenges more holistically. The balance in perspectives and conversation between government officials and project developers emphasised the peer-to-peer learning nature of the AMG-CoP.

The outcomes of the meeting were further elucidation of the activities that the members would like to participate in, the key requests for technical assistance and how members would like to engage and collaborate with each other in the future. Requests for technical assistance included expert assistance on creating the policy and regulatory frameworks for mini-grids, including integration and alignment with national energy policies, how to engage private sector and how to access finance for mini-grids. In addition, the government representatives expressed a keen interest in bilateral country visits to learn from countries with more mini-grid experience. Future meetings will aim to engage finance institutions and partner with existing mini-grid initiatives working in Africa.

For further information on how to get involved in the AMG-CoP activities, please contact africasecretariat@ledsgp.org

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