Sub-Saharan market for mini-grids energy is worth $3.6bn: AfDB

The market size for electricity mini-grids in sub-Saharan Africa is estimated to be worth $3.6 billion driven by improved policy and regulatory frameworks and technological innovations, the African Development Bank (AfDB) has said.

Wale Shonibare, director, energy finance solutions, policy and regulation, AfDB told a virtual meeting that the least-cost way for the continent to reach full electricity access by 2030 and to meet demand from newly connected households is to accelerate the deployment of mini-grids and standalone systems.

 

"So far 1890 mini-grids have been installed in the region with the Democratic Republic of Congo, Ethiopia and Nigeria having the largest mini-grid market potential," Shonibare said on Wednesday during the energy insights webinar on financing and regulatory trends in the African power sector.

 

Shonibare said that the pan-African bank is currently implementing a number of different initiatives such as market scoping and financing solutions to support the creation of a sustainable mini-grid market in Africa.

 

He noted that with an estimated 600 million Africans without access to electricity, there is a strong need to accelerate Africa's regional integration and develop power infrastructure at region-level so that countries with excess power can sell to those with deficits.

He added that Africa's regional power pools are characterized by deficits in investment in generating and transmitting power nationally. "Other challenges they face include lack of trust among member states, low willingness to liberalize markets, dominance of national power providers as well as preference of bilateral over regional agreements," said Shonibare.

AfDB noted that use of auctions to license power projects is a well-established trend in Africa to guarantee the most transparent and competitive process that will accelerate the downward trend in cost and tariffs for renewable energy projects.

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