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FEATURE STORY

Mini Grids: Bringing Low-Cost, Timely Electricity to the Rural Poor

July 7, 2016

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Photo: Peter Ndung’u / World Bank


STORY HIGHLIGHTS
  • Mini grids hold great promise for electrifying remote areas in regions such as Sub-Saharan Africa and Asia, and help countries reach their energy access goals
  • Innovations and declining costs have made mini grids a viable option to boost economic activity in areas that would otherwise be waiting years for grid connection
  • The World Bank, along with its partners, has launched a Global Facility on Mini Grids to help countries accelerate their successful adoption

John Akwa is a metal fabricator in the remote town of Entasopia, 50 kilometers from the nearest power line in Kenya’s desolate Rift Valley. Iron welding, a precision task often requiring high amounts of electricity, is one of the main economic activities in the region and the primary source of Akwa’s income.

Akwa’s life changed after a solar-powered mini-grid system was installed in the area. The system supplies low-cost, reliable electricity, bringing life to the entire town, even after the sun sets.

“Before the mini grid we could not work throughout the day, which was inconveniencing many of our customers,” said Akwa. “Now we are able to work longer hours and satisfy all our customers, and improve our incomes.”

While access to electricity in Kenya has rapidly increased over the past few years, about half of Kenya’s population still lives in darkness. This is partly because many live in communities far from the national grid, making it too expensive to connect them to it.

The majority of these communities are poor. Waiting for the grid to reach their villages over the next five to fifteen years comes at a high opportunity cost, especially for the younger workforce.

With an ambitious target of achieving universal access to electricity by 2030, Kenya, Rwanda, Tanzania and other countries in Africa (and around the world) are now exploring mini grids for electrifying communities away from the grid. These localized electricity networks—typically harnessing energy from available solar, wind, hydro and biomass—could hasten connectivity for millions of people.

“We believe mini grids can offer a promising solution to provide electricity to many rural communities and we are committed to working with these communities to explore their viability," said Diaretou Gaye, World Bank Country Director for Kenya during a five-day event in Nairobi on “Upscaling Mini-Grids for Least Cost and Timely Access to Electricity.”

The event, which was organized by the Climate Investment Funds (CIF) and the World Bank’s Energy Sector Management Assistance Program (ESMAP), brought together for the first time more than 200 representatives from 29 countries to discuss ways to scale up mini grids as one of the solutions to meet energy demand in their countries.  

While expansion of mini grids has been constrained by policy and regulatory gaps, lack of long-term financing, and technical capacity, the barriers are quickly breaking down. In many countries, the convergence of key factors—such as cost reduction in power generation, storage, and electric appliances; use of smart meters and pay-as-you-go systems; access to mobile payments and finance; workable regulations; geospatial planning; and innovative south-south community exchanges—are bringing mini grids within reach.

To build on this momentum, ESMAP has launched the Global Facility on Mini Grids. The facility works with World Bank project teams, governments and other stakeholders along the value chain and life-cycle of mini grids to enhance the enabling environment through adequate regulations, access to finance, and flexible and innovative payment models. It also acts as an interactive platform for knowledge sharing to strengthen the global mini-grid community.

The World Bank, along with other multilateral partners in the CIF's Scaling Up Renewable Energy Program (SREP), is financing initial efforts to scale up mini grids in Kenya, Liberia, Mali, Nepal, and Tanzania. To date, more than $90 million has been allocated for these mini-grid programs. The ESMAP mini-grids facility will provide technical assistance for these investments and seek to identify opportunities to scale up.

Of the 1.1 billion people globally without access to electricity, about 88% live in Sub-Saharan Africa and South Asia. Mini grids could present a least‐cost and timely option for up to 400 million people in these regions.


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