Development of mini-grids has the potential to unlock under-exploited renewable energy resources including solar PV in sub Saharan Africa, and to bring power to the 620 million people without access to electricity.
Uganda’s Rural Electrification Agency (REA) said mini-grids are the best solution to lack of access to electricity in areas “where the demand is not high and the distance from the grid is long but loads are fairly concentrated with potential for productive use of electricity” such as trading centres and island communities on Lake Victoria.
“Due to the scattered nature of settlements in Uganda, mini-grids play a major role in increasing electricity access. The many people moving to trading centres provide an opportunity for mini-grids,” said Benon Bena, manager off-grid renewable development at REA.
The Paris-based International Energy Agency says 68% of the population in sub Saharan Africa have no access to electricity and that 80% of the energy poor are in rural areas where 63% of the total population lives.
Despite the opportunities for mini-grid development in sub Saharan, analysts say the road to transforming them as a reliable source of electricity generation is full of stumbling blocks that must be addressed by both the governments and the private investors.
According to Virinder Sharma, UK’s Department for International Development, mini-grid development in Africa faces the barriers of inadequate regulations, policy gaps or uncertainty, market fragmentation and unmade linkages and capacity.
“Lack of standardization by regulators, lack of proven commercial business models for project developers and lack of access of to affordable longer term finance,” are the other challenges facing mini-grid development in Africa according to Sharma.
Some countries, such as Uganda, have made progress in trying new measures not only to attract private investors in mini grid development but also in ensuring the mini grids boost the share of renewable energy in the country energy mix.
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