Mini-grids have been identified as a critical tool towards achieving universal electricity access by governments, international funding partners and private sector actors alike. To enable the sustainable deployment of mini-grids, the public and private sector need to cooperate. Policies and regulations which support the most suitable mini-grid delivery models need to be further deployed to allow the sector to scale.
The Clean Energy Mini-Grid Policy Development Guide, developed in partnership by ARE, AMDA, UNIDO, INENSUS and the AfDB Green Mini-Grid Help Desk, outlines the various forms and models that public-private cooperation could take and reflects on the outcomes of policy decisions on mini-grid deployment.
The guide provides an overview of the most important aspects of mini-grid policy, with the aim of supporting policy makers to accelerate mini-grid deployment and enable national debates and decision making. Based on key lessons learnt from existing mini-grid policies and regulations, the guide presents a decision tree designed for policymakers to guide them through the decision-making process.
Five critical conclusions may be drawn from the guide:
- Sustainable mini-grid business models require scale.
- The way in which mini-grids are deployed, including the degree of private sector involvement, depends on decisions taken by government.
- Large government control over mini-grid deployment, minimum financial subsidies and low-end consumer tariffs cannot all be achieved at the same time.
- The development of electricity demand in rural areas is difficult to predict, making it important to introduce demand risk mitigation instruments in the policy framework.
- The risk of a sudden end to the project, i.e., the termination risk, ought to be considered by policy makers and regulators