Message from the MGP Steering Committee Chair

By: Daniel Schroth, AfDB

Events at the recently concluded Sustainable Energy for All (SEforALL) Global Forum in Lisbon, Portugal demonstrated that the clean energy mini-grids movement is building momentum and is increasingly taking over the spotlight in the race toward universal energy access and the achievement of Sustainable Development Goal 7.

The theme of this year’s Forum was “Leaving no one behind” – an imperative that can’t be achieved without mini-grids, especially in Africa (and some parts of Asia), where some suggest that as much as 40% of the roughly 600 million un-electrified population will most affordably be supplied with electricity through mini-grid solutions.

The growing interest in mini-grids is evidenced by a number of encouraging trends; more corporate players are moving into the sector, mini-grid developers are setting-up their own productive use businesses, and developers are focusing on cost reductions as a driver for increased profitability. For instance, a mini-grid developer found that he doubled his revenue by producing and commercializing ice in his fishing community in parallel with generating and selling electricity.  Moreover, the boundaries between mini-grids, off-grid and the utility world are blurring with emerging partnerships between solar home systems companies and mini-grid players. In addition, national utilities and international equipment suppliers are also entering the mini-grids space as part of their business model for providing electricity access in rural areas.  Among funders, there are several partners preparing auction schemes for mini-grids, such as the World Bank in Nigeria, DFID in Sierra Leone and the Democratic Republic of Congo and the African Development Bank in Burkina Faso. With these schemes, comes complex design challenges that are now the subject of discussion among funders within the Mini-Grid Partnership (MGP).

On the occasion of the SEforALL Forum, the Mini-Grid Partnership organized a high-level panel session on the role of partnerships to advance the mini-grids sector, moderated by Steven Hunt, of DFID and a long-standing champion of clean energy mini-grids.  Jessica Stevens, of the Africa Mini-Grid Developers Association (AMDA) spoke of the need for a systematic and reliable results-based financing mechanism to bridge the viability gap between what mini-grid developers need to earn to recover their costs and what their rural customers are able to pay.  She also announced AMDA’s plans to open new branches this year in Nigeria, Uganda and Zambia.  Faruk Yusuf Yabo, Director for Renewables in the Nigerian Ministry of Power, Works and Housing, shared how the SEforALL country actions helped his country design its universal access strategy and plans. Nigeria represents one of the biggest opportunities for mini-grids, thanks to its recently enacted progressive mini-grid policies and regulations. Emily McAteer showcased the Odyssey platform as an innovative tool to facilitate mini-grid auctions, like in the case of Nigeria. I, too, was on the panel, and spoke of the African Development Bank’s Green Mini-Grid Market Development Program (GMG MDP) and our newly remodeled GMG Help Desk.  Through the Help Desk, the MDP is providing technical assistance to 60 mini-grid developers in 30 countries, and is more recently providing policy technical assistance to public sector stakeholders. The MDP is also working with AMDA and others to design a robust and efficient results-based financing mechanism to address the viability gap for mini-grids. Finally, Ruchi Soni of the UN Foundation, who has recently taken over the central role of the MGP’s Secretariat, presented the Partnership’s newly refreshed strategic plan and governance structure.

With this increased focus on mini-grids, the need for better coordination and collaboration increases and, hence the rationale for the Mini-Grids Partnership is stronger than ever before. The renewed Partnership is underpinned and guided by a strong Steering Committee, which now has representation from: (i) industry (notably represented through AMDA); (ii) the public sector (notably represented through Club-ER, the association of rural electrification agencies of Africa), (iii) funders/financiers; and (iv) other ecosystem enablers. The Partnership also has a new ambitious 2018-2019 Strategic Plan, which seeks to foster better coordination and collaboration within the sector and to advocate for the sector among policy-makers. One of the first priorities for the Partnership in the year to come, will be to align stakeholders around the development of a global state of the mini-grid market report based on a systematic collection of mini-grid market data (numbers of MGs, ownership and technologies, numbers of connections, CAPEX, OPEX, etc.) and making that data easily accessible to all interested stakeholders.

Interesting times indeed. In closing, I’d like to thank the Partnership’s Steering Committee for placing its confidence in me to guide the MGP forward.  I am very happy to assume the responsibility and extremely excited about the work and challenges that await us this year and beyond. I invite everyone to actively engage with the Partnership to ensure that we collectively meet the target of universal energy access by 2030.