The 7th Mini-grid Action Learning Event (ALE), held in Nairobi, for the first time in two years brought together key mini-grid sector stakeholders—including governments, developers, international and local financial institutions and financiers, productive use equipment suppliers, and associations—with the goal of accelerating the deployment of mini-grids to help achieve universal access to electricity.
Over 600 million people in sub-Saharan Africa (SSA) alone lack access to electricity. Moreover, 40 percent of the poor live in remote areas unlikely to be served by a grid connection in the foreseeable future. In this context, mini-grids have a key role to play in extending access to electricity. Achieving the United Nation’s goal of universal access to electricity by 2030 requires mobilizing USD$127 billion to deploy more than 210,000 mini-grids to serve half a billion people, according to estimates by ESMAP.
The good news is that the technology is proven and has been demonstrated in thousands of projects across the world. However, a number of factors still hinder the deployment, at scale, of modern mini-grids, including a lack of clear regulatory and institutional frameworks, shortage of affordable financing, uncertain economic viability, and insufficient focus on demand stimulation.
The key elements of the agenda were:
Day 1 - Monday, February 27: Host country day: Kenya – reaching universal access to electrification, the role of mini-grids, and the status and restructuring of the Kenya Off-grid Solar Access Project (KOSAP)
Day 2 - Tuesday, February 28: SSA countries’ day with programs from eight countries including Nigeria, Ethiopia, DRC, and Niger joined by representatives from the government, regulators, private sector, financiers, and productive use appliance organizations
Day 3 - Wednesday, March 1: Global, best practice day including discussions on findings and remaining questions from Mini Grids for Half a Billion People Handbook
Sumaya Mahomed, Power for All’s Uganda Country Director took part in two-panel discussions. The first panel discussion included country-specific discussions on Uganda, where Sumaya shared the learnings from Power for All’s Utilities 2.0 mini-grid campaign. The other key panelists from the session were Eng. Ziria Tibalwa Waaki from the Ugandan Electricity Regulatory Authority, Simon Peter Ssekitoleko, Ministry of Energy and Mineral Development, Noah Ochima from GIZ, Oscar Ankunda from USAID, Peter Nyeko from Mandulis Energy, Riccardo Ridolfi from Equatorial Power and Raihan Elahi from ESMAP.
The second session that Sumaya participated in was “Training, Skill Development, and Jobs Training at scale”, where she presented the findings and insights from the Powering Jobs Census 2022: The Energy Access Workforce. Other Panelists in the session included Olumide Fatoki from GIZ, NESP, Benjamin Curnier from AfDB, Leva Indriunaite from CAMCO, Jude Numfor from REI Cameroon, Lily Beadle from ESMAP and Yao Azoumah from KYA Energy Group.
Alongside the general conference, there were 17 separate closed-room Frontier sessions, which were led by the World Bank, ESMAP, and AMDA.
The Power for All delegate's key takeaways from both the Frontier sessions and the conference included:
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Pan African mini-grid subsidies and 10x more investment is urgently needed to accelerate the growth of the mini-grid sector. This is reliant on both development partners and national governments.
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Mini-grid developers expressed a great sense of urgency to scale, and the need for more financing into this sector to achieve the necessary scale in order to achieve the SDG 7 goals for 2030.
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Mini-grid developers, regulators, and donors need to speed up the pace with which they operate, such as speeding up processes for project development and regulatory approvals. Further, the quantity of the projects need to be increased by x10.
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We need to empower current off-grid renewable energy platforms and working groups (on productive use, appliance financing, etc.), within the continent to work effectively and effectively.
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We must empower mini-grid developers to supply directly to the market or demand. It is not happening yet because the entire mini-grid ecosystem has not yet bought into the shared goal.
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Governments and development partners should rethink the regulatory and financing processes. There should be a reasonable environment for the developers to come into and scale (e.g. licensing to develop 50 to 200 mini-grids as opposed to 5 to 10 sites).
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Mini-grid developers and governments should look beyond just connections. Business models should consider the socioeconomic characteristics of communities in order to predict productive use.
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There is an urgent need for data to ensure that scaling up is more efficient. For instance, partnerships with big data to predict demand assessments are critical for implementation.
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Rural development is the hole in the mini-grid ecosystem; all actors in the mini-grid sector should be concerned with figuring out how to coordinate rural development and tie it to energy access.
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There is a huge opportunity for productive use. Developers should prioritize communities with limited sources of sustenance so that energy could be a catalyst for innovation.
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Policymakers and regulators should be asking critical questions such as, “How do you sustainably provide energy to people that cannot afford $2 a month or might not consistently pay the mini-grids power tariff?” to push the need for better innovative finance mechanisms. These key players should be open to certain reformations in financial policies, and funders should support innovative finance models for the sector.
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Matchmaking of different stakeholders of the ecosystem is critical. This includes the end-user segments e.g. farmers, SMEs, PUE technology developers, etc.
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There is an urgent need to de-risk mini-grid developers against forex volatility, regulatory uncertainty, tariffs, etc. in today’s world of global political instability.
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Utility-enabled mini-grids and decentralized renewable energy solutions provide value to the incumbent utility and broader societal benefits—we need to clearly articulate and quantify these benefits.
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As a sector, we need to compile the business models that have been developed, and the pilot projects implemented, to transparently share results across countries and enable them to be tailored to a local context.
Overall, the sense of urgency and possibility was palatable throughout the conference. The technology, benefits, and will are proven. It is now a matter of creating financial models, partnerships, and policy frameworks that will fast-track mini-grid deployment. Without clearing a path for rapid mini-grid development, Sustainable Development Goal 7 is a fantasy.