Investors With US$2 Billion Urge Donors to Ramp up Support for Mini-Grids in Africa
Tuesday, June 11, 2019
By William Brent
An influential group of impact and energy investors has called on major donors to increase their support for energy access solutions in Africa, especially rural utilities called mini-grids, and cautioned that private capital would stay on the sidelines without well-designed, coordinated financing.
Specifically, the 12 investors, which have more than US$2 billion under management, said that the missing catalyst for scaling mini-grids was an effective results-based financing (RBF) mechanism.
The International Energy Agency (IEA) says that with proper finance and policy that renewable energy mini-grids can provide electricity to 450 million people, mostly in Sub-Saharan Africa, by 2030. It’s estimated that US$10-25 billion annually is needed to fund the up to 200,000 mini-grids required, yet of the US$1.7 billion investment in off-grid renewable energy from 2010-2018, less than 15% went to mini-grids, creating a huge financing gap.
Photo courtesy of Sebastian von Stein.