At the same time some developers are succeeding with out subsidy in Africa! May be tariff setting by governments are taking so long that its delaying the universal access to electricity!
Wonder how we can strengthen the #minigrid sector? Sustainable Energy for All (SEforALL) took part in the 7th Mini-grid Action Learning Event organized by The World Bank's ESMAP in collaboration with Africa Minigrid Developers Association (AMDA), and here are 7 key takeaways from the event: 1. The debate over end-user tariffs remains a bone of contention with mini-grid electricity prices being compared to those of the national grid. While it is well known that benchmarking tariffs against those of the national grid is unfair, given the multitude of subsidies and bailouts afforded to national utility companies to keep the lights on, the debate remains a major issue at the local level. 2. Governments and donors need to come together to work towards subsidizing and in some cases even cross-subsidizing to improve equity in electricity pricing, regardless of technology, thus relieving the burden from #minigrid developers to absorb the variance. 3. Local currency financing remains the missing link. Particularly, the ability of mini-grid developers to access financing in the same currency that tariffs are paid continues to be a challenge. 4. A healthy enabling environment starts with a clear national integrated electrification plan. However, an effective plan must be backed by best-in-class data and based on a least-cost methodology, driven by and politically accepted across all relevant ministries and agencies/regulatory authorities, and has a clear indication of longevity and timeline before revision. 5. Country-focused discussions acknowledged that a lot of effort has been put into developing strong and robust mini-grid regulations and policies across many markets in #Africa. However, the capacity to implement these policies, meet approval timelines, and provide the private sector with clear processes remains a bottleneck. 6. Areas of convergence with the off-grid solar sector should be better leveraged. While many countries have implemented important import-tax exemptions, there remains ambiguity at the customs authority in many cases regarding whether the products will be deemed exempt or not. The result has been that while panels and solar home kits are easily identifiable and therefore more often afforded exemptions, vital components for mini-grids such as batteries, cabling, and electronics are often taxed at normal import rates. 7. The road ahead requires project developers, governments, and financiers to work together to ensure the sustainability of the sector.