Five Government Approaches to Promote Solar Hybrid Mini grids in Africa

Investment Rating - The report does not explicitly provide an investment rating for the industry. Core Insights - The report reviews five government approaches to promote solar hybrid mini grids in Africa, highlighting that each approach has its own advantages and disadvantages depending on the local context [5][7][9]. Summary by Sections Government Approaches - Five common approaches to promote mini grids in Africa include: 1. Sites selected and operated by private developers 2. Competitive procurement for individual sites selected by the government 3. Competitive procurement for zones selected by the government 4. Utility outsourcing of construction and initial operation of mini grids 5. Community-owned mini grids [11][14][40]. Private Sector-Led Approach - In the private developer-led approach, developers select sites based on profitability, often using geospatial data [15][22]. - The Nigeria Electrification Project (NEP) serves as a leading example, with 173 mini grids commissioned as of November 2024, serving over 100,000 connections [22][24]. Government-Led Competitive Procurement - Governments can lead competitive procurements to promote private ownership of mini grids, with Nigeria initiating such efforts in 2017 [42][44]. - The African Development Bank supported a minimum subsidy tender for 150 solar hybrid mini grids in Nigeria [46]. Zonal Concessions - The Democratic Republic of Congo (DRC) plans to award concessions for large mini grids, with potential capacities of 60 MW to over 100 MW [55][57]. - The DRC's approach includes a minimum revenue guarantee for developers, which is unique compared to other mini grid projects [57]. Utility Outsourcing - In some countries, utilities may outsource the construction and operation of mini grids to private companies, as seen in Kenya and Ethiopia [61][66]. - This approach allows utilities to retain control over electricity distribution while potentially improving service delivery [68]. Community Ownership - Community-owned mini grids are another approach, where local communities take ownership and operation responsibilities, often supported by government or donor funding [11][14].