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Conditions for viability of minigrids
Rwanda i. Policy -Have a rural electrification strategy --Identified areas for minigrids based on resource availability and population Business Model: Financing: Grant funding, or Results Based financing (NGOs), [Rwanda to explain further concession loans mobilised by govt which are administered by a bank at low interest rates Not sustainable, needs additional support Tariff not clearly defined Subsidise in form of exemption of duty, vat etc ---No clear tariff mechanism (paid according to appliances, number rooms etc) Malawi Policy -an Energy policy, a RE policy and a Rural EMP exist which form the basic framework for minigrids -There 6 solar and wind hybrid minigrids were not sustainable while the (100kW) mini hydro has been successful
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Malawi Business model --the Hybrids were funded by govt and no tariff paid by community, and hydro funded by a undp grant --Tariff group into 3: Domestic 8c/kWh; Social 4c/kWh; Business 14c/kwh --Subsidy was for capex SUDAN *selected an off-grid area far from grid; Areas not in the grid extension plan for next 25yrs *The project has SHS and solar kits with a prepaid metering system, *Other off-grid productivity projects e.g. Solar water pumping for irrigation exist; **tariff is based on cost recovery basis without profits *The off-grid in towns has commercial tariff -soft loan from banks, user chooses size of system, monthly rental tariffs only cover capex costs and transaction costs of bank --Success factor based on involvement of banks and productivity model
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Mauritius -No policy framework for off-grid electricity becoz smaller distances -Developers and promoters not happy with lack of off-grid framework -developers share grid extension costs with govt Ethiopia Policy -Off-grid issues covered in the general Energy Policy -there is a general guideline on electrification -The Rural Energy Master Plan exists but not regularly updated to reflect situation on the ground: often the grid extension overlaps into off-grid project sites Business models -Development bank offers loans for minigrids but prefer for SHS projects becoz of the overlap stated above -tariff set by regulator at cost recovery plus profit -3 minigrids, Private, govt and NGO funded are in operation -there exists cross subsidy for diesel based minigrid operated by utility Burundi -Theres an Energy Policy for all energy forms -Has a Rural Electrification Agency for Rural areas: The utility takes care of urban electrification -REA for rural grid and off grid projects -REA has 6 microhydro minigrids
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Burundi -Challenge is there's a rural and urban tariff: The regulator is planning to harmonised the tariffs -Business -funded by ARAB bank thru a grant Zimbabwe Policy -Energy Policy and Rural Electrification Act exist -The Rural electrification agency is funded thru a 6% levy on electricity bills and grants from govt, and ZERA -Rural Energy Master Plan is being developed. The Masterplan demarcates areas/zones for Grid and off-grid electrification in the next 25 years Business model: -Minigrids were funded by private players and also funded by Development Agencies, NGOs -Two mini-hydros have commercial rates which are above the utility tariff -A 100kW Solar minigrid has different tariffs for Social and business enterprises -Subsidies in form of exemption of duty on importation of capital equipment
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Madagascar -Energy Policy exists; -Have a Rural Electrification Agency funded from electricity bills Business models -hydro, solar, wind, biomass minigrids exists -Govt gives up to 70% capex subside to developer thru the Rural Electrification Agency -Development agencies (EU, GIZ and others) also fund projects -Govt helps fund transmission network -regulator sets tariff often higher than grid tariffs Swaziland Policy: Electricity Act, Renewable Energy and IPP policy that speaks to electricity access by mini-grids Rural Electrification program in the Ministry which has achieved a 67% rural electrification -Most off-grid systems are stand alone solar systems by private home owners -minigrids are suitable for sparsely distributed rural settlements
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Remarks Tariffs (social, business and domestic) for minigrids need to be cleared defined Community needs to pay reasonable tariffs for sustainability off-grid projects Success factor is based on involvement of financial institutions and productivity models Often the main grid encroaches into mini-grid sites which is not good for private developers. This needs to be clarified in the Rural Energy master plan
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