Mini-Grids Are Ready To Change The World (Again)

But despite this momentum, mini-grids have not yet begun to seriously scale across Africa. One of the main barriers to growth has been that the underlying assets are extremely hard to finance.

The first barrier to infrastructure finance is that mini-grids, like most renewable energy projects, are small-scale infrastructure. And small-scale projects are hard to finance. The projects are not large enough to justify the fixed costs of a detailed evaluation of each project. This means projects must be aggregated into pools of sufficient size for investors to assess.

The second challenge is that, unlike traditional infrastructure projects, mini-grids do not sell to large governments. They sell to poor rural consumers who are receiving electricity for the first time. This is a very hard risk to measure and price during this early stage of the sector.

Read full article: Forbes



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