Afew years ago, least-cost electrification models began pointing to an exciting possibility: solar and solar-diesel hybrid mini-grids could be the cheapest way to deliver reliable, on-demand electricity for hundreds of millions of people without power. This was especially promising for sub-Saharan Africa, where the insolvency and dysfunction of national utility companies had led to slow progress in electrifying rural populations. Governments and donors formed partnerships to support an array of new mini-grid programs. It’s time to begin the learning about regulatory development and financing structures required to ramp up this delivery platform.

Most mini-grid incentive programs in Africa are still in their early years, so it’s premature to draw final conclusions about their efficacy. That said, we thought it would be fruitful to take stock of where things stand. We studied 20 mini-grid programs in sub-Saharan Africa, 17 of which are currently being implemented.

Findings:

Results-based financing shows considerable promise
Auctions are great for scale, but they’re being used to build pilots and force regulatory development. RBFs and hybrid programs offer a promising alternative.

The lack of transparency is inhibiting innovation 
We have a good understanding of mini-grid costs and subsidy requirements, but a lack of transparency in programs is inhibiting learning and delaying candid conversations regarding tariffs.

Expectations of many programs are unrealistic
Countries want their mini-grids to be built by local companies, deliver for last-mile communities, support productive use, and—ultimately—be commercially viable. From where the sector currently stands, that is a tall order.

Read the full article about proliferating mini-grid incentive programs by Jonathan Phillips, Benjamin Attia, and Victoria Plutshack at Brookings.