Scaling Up Mini Grids in Developing Countries to Reach Universal Access to Electricity
According to a recent ESMAP report mini grids have the potential to be the source of electricity for close to half a billion people by 2030. They have demonstrated their ability to provide quality and reliable electricity for households and productive uses, such as agricultural, commercial, and industrial activities. Moreover, the capital cost of mini grids has started to decline and is expected to continue a downward trend through 2030. At the same time, there continues to be a dramatic improvement in the quality of service that mini grids provide.
The reduction in the cost of mini grids can be attributed to the substantial decrease in the cost of the essential mini grid components, such as solar panels, inverters, batteries, and smart meters. This has been catalyzed by several factors, including the innovations and economies of scale in utility-scale solar projects, the booming rooftop solar industry, and the growing electric vehicle market. These factors have presented developers and governments in developing countries with opportunities to deploy mini grids at an unprecedented scale.
ESMAP established the Global Facility on Mini Grids (GFMG) to build on this unprecedented opportunity. The program is designed to increase the deployment of mini grids in World Bank operations and advise governments in developing countries on integrating mini grids into their country’s electrification programs. Since its inception in 2016, the GFMG has helped to take mini grids from a niche industry to a mainstream solution. It has emphasized robust national and international markets and policies, driving the sector’s growth at scale to provide large numbers of people with access to high-quality, affordable electricity.
To reach its core mission, the GFMG undertakes the following core activities:
- Collaboration with operational teams in partnership with the IFC, MIGA, and IDA, to accelerate private sector investment in mini grids.
- Provision of technical advisory to governments in developing countries, as well as to World Bank technical teams.
- Production of knowledge products, such as reports, blogs, technical papers, analyses, and infographics.
- Facilitation of knowledge exchanges with development partners, government officials, private sector companies, academia, and other stakeholders.
Our work
Between 2020 and 2022, the GFMG launched two new knowledge products:
As a follow-up to the 2019 launch of the flagship report Mini Grids for Half a Billion People, the GFMG team has launched a comprehensive knowledge package that includes a handbook, two companion volumes presenting additional analysis, databases, and infographics. This package informs and supports the implementation of the World Bank’s growing investments in mini grids.
In response to a growing interest in mini grids, the GFMG launched a report that examines the scope for interconnected mini grids in areas already served by existing distribution companies. The report, an essential resource for World Bank technical teams and clients, highlights the beneficial outcomes for consumers, local distribution companies, and private developers.
Along with generating frontier knowledge, the GFMG provides essential support to the expanding number of mini grid projects in the World Bank’s portfolio. As of 2022, these have reached 39 operations in 37 developing countries, representing the most extensive mini grid portfolio of a single global financier. Between 2020 and 2022, the facility supported 22 of these projects, covering 28 countries (including large-scale regional programs in the Sahel and the Horn of Africa).
Working to address the most complex energy access challenges globally, the GFMG team has been providing in-depth advisory assistance to several projects in the highest access deficit and fragile countries, such as the Democratic Republic of the Congo, Haiti, and Niger. An additional highlight of the facility’s work between 2020 and 2022 is the hands-on engagement of its team in the Access to Distributed Electricity and Lighting in Ethiopia (ADELE) project. At $500 million, ADELE is the most significant access project in sub-Saharan Africa, with the largest mini-grid component ($270 million) of any financier. As a result of the support provided by the GFMG team, which is leading the deployment of the mini-grid component, the ADELE project reached effectiveness and is rapidly advancing in its implementation.
An additional milestone was the implementation of the $350 million Nigeria Electrification Project (NEP), which the GFMG team continues to support extensively. As of 2022, 379 mini grids were in active preparation under the project’s Performance-Based Grant financing window, anticipated to provide more than a million people with reliable and affordable electricity. The companies expected to deploy these mini grids have raised over $41 million in private funding, leveraging the corresponding IDA financing at a 1:3 ratio. In addition to this ongoing work, in response to the COVID-19 pandemic, the Nigerian Rural Electrification Agency, with support from the GFMG team, rapidly mobilized to provide the Nigerian healthcare sector with much-needed electricity supply and redirected $75 million out of the NEP financing to an urgent health facility electrification program. As a result, as of 2022, construction of reliable solar power systems is in the final stages at 88 rural clinics across the country.
