The Mission to Electrify Africa Might Finally Be Under Way

Bloomberg

28-03-2025

Plunging solar panel prices and international funding are now spurring the rollout of so-called mini grids that can transform rural communities
By Antony Sguazzin and Taonga Mitimingi
Photography by Zinyange Auntony for Bloomberg
When strips of solar panels arrived in his remote village in northeast Zambia, Damaseke Mwale saw an opportunity. He bought land, built a house and set up businesses including a grocery store and a hall to charge people to watch football matches.
'From there, that's where my life changed,' Mwale, 41, said as he sat in his living room next door to his small store. Even his children's school grades improved because they were able to study at night, he said.
Mwale is one of the early beneficiaries of a technology that promises to electrify a continent that's home to more than 80% of the world's 680 million people who live without power.
Called mini-grids, they generate electricity for small communities that aren't on national supply networks — and the economics suggest their time may finally have come. Plunging solar panel prices, more business-friendly regulation by African governments and international funding are now spurring a rapid rollout from Nigeria to Madagascar.
In January, the World Bank launched a program to get power to 300 million Africans by 2030, a project that could attract $85 billion or more of investment.
'We're in the inflection point,' said Yariv Cohen, co-founder and chief executive officer of Ignite Power. The Abu Dhabi-based company is acquiring the African mini-grid business of French utility Engie SA, which provides power to Mwale. 'We've never had $30 billion allocated for energy access in Africa. We never even had $1 billion.'
It's hard to know exactly how many units currently exist. Manoj Sinha, CEO of Husk Power Systems, the world's biggest operator of solar mini-grids, reckons Africa could eventually see 200,000 of them. Cohen is more conservative, given there are only hundreds at the moment, he said.
Key to the success of the World Bank initiative, called Mission 300, is the buy in from governments when it comes to tariffs and fostering private investment, and there are cautionary tales that have deterred investors in the past.
There's also the current political climate. President Donald Trump's administration in the US, which is the World Bank's biggest shareholder, is slashing development aid and has expressed disdain for renewable energy.
But the potential impact is clear, as is the incentive for richer countries to make sure the finance is there, according to World Bank President Ajay Banga.
Access to electricity in the sub-Saharan region ranges from 1% of the population of South Sudan to 94% in South Africa. Improving the average is key to development on the world's poorest continent, which in turn is in the national interest of the Western world, Banga said.
'What this does is it develops jobs and industries and productive, consuming individuals in these countries,' Banga said in an interview in Dar es Salaam, Tanzania. 'If it reduces illegal migration, if it keeps people happy in their countries, if it creates marketplaces for your products and your intellectual property and your technology, there's nothing wrong with that.'
About 30 heads of state and governments attended the January conference and a dozen nations presented detailed plans as to how to achieve universal access to electricity. The Democratic Republic of Congo, with $35 billion, and Nigeria, with $27 billion, presented the biggest proposals for investment.
In Zambia, Mwale's village of Chitandika in the Chipangali district got its mini-grid in 2019. The country has since embarked on a plan to bring power to 1,000 rural communities over the next few years, up from 45 now. The program is supported by the Rockefeller Foundation, the European Union, the UN and the Beyond the Grid Fund for Africa, whose donors include Australia, Germany and Sweden. It has an initial target of installing at least 200 more by the end of next year.
Zambia Plans to Bring Power to 1,000 Rural Communities
The village of Chitandika now has a solar-powered mini-grid
The Chipangali area has turned into a hive of activity thanks to the arrival of the solar panels, from a brightly lit barber shop to schools being able to provide more IT support for kids without having to use expensive petrol-fueled generators.
One headteacher, Tryson Banda, said the whole environment has changed, with better lighting and more appliances. His school has gone from having six teachers to 28 because it's a more attractive place to work.
Simon Makowani, a local mechanic, is able to offer welding rather than having to take customers elsewhere in the province. It means if someone just wants to weld an oxcart, they can now do it in the village. 'Before the grid, I was just doing mechanics,' he said. 'I started welding and it has helped me a lot in terms of earning my revenue.'
With a stable power supply, this school in Chipangali is sending more kids to university while headmaster Tryson Banda says more teachers want to come and work there.
Simon Makowani's workshop runs from the mini-grid in Chitandika. The mechanic is able to offer welding rather than having to take customers elsewhere.
Zambia has embarked on a plan to bring off-grid power to 1,000 rural communities over the next few years.
Getting electricity to rural areas is also about meeting basic needs, like providing a veranda LED light for studying.
To access funds, countries need to commit to running competitive tenders, charging high enough tariffs to make state utilities sustainable and promising to using the lowest cost electricity — almost always renewable power.
Nigeria is being held up as an example of the kind of investment that favorable regulations can bring. At least 7 million people gained access to more reliable electricity in the last few years with the help of World Bank finance, with commercial mini-grid operators often selling power to both local communities and the erratic national grid.
'If a country doesn't own it, and it isn't the country's plan, there's nothing much you can do from the outside because politics is local,' said Rachel Kyte, the UK's special representative for climate. 'It's the first foundational piece. Here's the minister of finance standing up and saying here's my plan to close the energy access gap in my country.'
Still, companies may need more incentives, said Sarah Malm, the executive director of Gogla, a global association for the off-grid solar energy industry that says it has 200 members providing power, services and equipment to 560 million people.
Those could include exemptions on import duties for solar products, credit guarantees and subsidies or grants to help the almost 50% of potential beneficiaries who will struggle to pay for electricity, she said.
Indeed, for the World Bank to meet its target of connecting 300 million people, someone is going to have to help the new consumers pay their bills, according to Daniel Schnitzer. He runs SparkMeter, which operates smart metering and grid-management services in African countries including Somalia.
'There's a pretty widespread recognition of the need for some kind of subsidized financing,' he said. 'There's a lot of hope that Mission 300 will unlock those sorts of mechanisms.'
A woman uses a solar panel to charge her mobile while walking through Chitandika. Africa is home to more than 80% of the world's 680 million people who live without power.
A small store in Nyimba Mwana is powered by a solar panel. Key to Mission 300 is to get buy-in from governments as well as companies.
When the sun sets in Nyimba Mwana, villagers now have more access to light.
In Chitandika, that also means entertainment. The mini-grid powers the local night club.
Investors got stung in the past. In 2015, Husk began investing in Tanzania and built a number of facilities. Then the country's energy minister decided that all electricity tariffs, irrespective of the technology being used or the scale of the facilities, should be the same, more than halving what Husk could charge.
'There was a policy that made us enter and then with a flick of a pen tariffs were the same for everybody,' said Sinha, who is also Husk's co-founder. 'That was why we packed our bags,' he said. The company left in 2022.
Three years later, Husk is expanding in Nigeria and has about 80 mini-grids in the country. It's also considering expanding in Congo and mulling acquisitions of mini-grid companies or their assets in Benin and Madagascar.
The World Bank's International Finance Corp. in 2022 estimated that by 2030 half a billion people worldwide could get their power from mini-grids. Many of those would be in Africa.
Mission 300 'might probably be overly ambitious given the time frame but it sends the right signal,' said Philippe Valahu, CEO of Private Infrastructure Development Group, which is funded by seven wealthy nations and has invested across Africa and Asia.
Programs in some countries have effectively served as pilots for Mission 300 and have shown speedy progress.
In Malawi, access to electricity has almost doubled to 27% since 2023, largely driven by the World Bank-backed Ngwee Ngwee Ngwee fund, which finances initiatives to get electricity to people who are off the national grid. Ngwee means bright in Chichewa, a local language.
'I can't think of anything more important than electricity,' said Akinwumi Adesina, president of the African Development Bank, which is providing billions of dollars in funding alongside the World Bank. The continent has the world's lowest electrification rate, and 'that is not a gold medal I want Africa to have.'
Editor: Rodney Jefferson
Photo Editor & Production: Jody Megson
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