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Sizing the mini-grid opportunity in Africa for impact… and investment

ImpactAlpha, April 24 – Today, more than 600 million people in Africa still lack access to regular electricity. That gap can be closed by expanding the existing main grid, building more mini-grids — self-sufficient electricity setups — and rolling out standalone home solar systems. A new analysis by CrossBoundary, a solar energy investor, suggests 100 million people in Africa could be most cost-effectively served by mini-grids today, an investment opportunity in the range of $11 billion. By 2030, the number of people efficiently served by mini-grids could reach 290 million.

  • African mini-grid finance… The top five mini-grid developers in Africa raised less than $100 million between 2012 and 2017, according to Crunchbase.
  • European utilities… In addition to Engie, major European utilities like E.ON, Enel, EDF and multinationals such as Caterpillar and Mitsui are ramping up their mini-grid investments as well.
  • Bill Gates… and Breakthrough Energy Ventures identified mini-grids as one of five sectors for its $1 billion clean energy fund.
  • By comparison… Investors put $750 million into home-solar companies like M-KOPA over the same 2012-2017 time period.

To test business models for the mini-grid sector, CrossBountry and Rockefeller Foundation have launched the Mini-Grid Innovation Lab, which will help test the models. The Lab, says Gabriel Davies, head of energy access at CrossBoundary, will take a “data-driven, iterative testing approach to put numbers to the questions that governments, donors, and investors need answers to.”

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