Mini-Grid Firms Need $46 Billion for World Bank Power Plan
(Bloomberg) -- Leaders of the some of the world’s biggest solar mini-grid companies said they need as much as $46 billion in investment by 2030 to achieve the electrification goals of 29 African countries that plan to use the technology under a World Bank-backed program.
The firms, which include the largest operator, Husk Power Systems, said as much as $28 billion in debt funding, $14 billion in equity investment and $4.6 billion in grants and subsidies will be needed to meet the countries’ targets, they said in a plan released Monday.
The technology, which can deliver electricity to remote communities as well as those in urban areas plagued by poor grid supply, is a key pillar of the World Bank and African Development Bank’s’s so-called Mission 300 program.
That blueprint seeks to bring power to 300 million Africans by 2030, with the 29 countries that have signed compacts with the lenders identifying mini-grids as a solution for supplying electricity to about 116 million people.
This “implies unprecedented scale and coordination,” the companies’ chief executive officers said in the plan released about a year after Mission 300 was officially unveiled at a conference in Tanzania. “The sector is ready to deliver but success depends on immediate action across capital deployment, regulation and institutional execution.”
At current rates of deployment 12,000 new mini-grids will be built by 2030 serving 46 million people, the CEOs said. In 2024 just 600 of the systems were built in Africa.
To date the 22 companies that signed the plan have built 392 mini-grids in Africa and have invested $310 million. They have a pipeline of a further $8.2 billion in installations.
While the industry is still relatively underdeveloped funds and platforms to finance their development are being established.
Nigeria’s sovereign wealth fund and a World Bank agency last year set a $500 million target for a distributed renewable energy fund that will invest in companies providing solar home systems and mini-grids. Separately, Africa50, a pan-African infrastructure investor, is creating a $200 million vehicle, while another $500 million fund is being established in the Democratic Republic of Congo.
The AfDB, together with the World Bank, has formed a $1 billion equity investment platform known as Zafiri to boost electricity access.
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(Updates with pace of expansion, funding vehicles in last five paragraphs)
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