Benchmarking Mini-Grid DESCOs 2017 Update Summary of Findings

Sep 03, 2018

Source/author : International Finance Corporation (IFC)


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IFC and Energy Access

▪ Energy access remains a critical piece of the development agenda:

• Globally, over 1 billion people have no access to electricity. • Over half these citizens—an estimated 600 million people—live in Sub-Saharan Africa.

• They spend significant resources on kerosene and candles for lighting and expensive charging services for devices such as cell phones.

• In addition to a reduced quality of life (some 1 million people worldwide die each year due to indoor air pollution from wood and charcoal fuels used for cooking and heating), economic opportunities are constrained by a lack of access to modern energy services.

▪ The International Finance Corporation (IFC), a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets.

▪ Within IFC, the Energy & Water (E&W) Advisory Services Group works to develop clean energy opportunities, as well as improve access based on a range of both grid- and off-grid technologies, and optimize energy usage across a wide range of sectors in emerging economies. 

IFC is engaging with companies and governments in several markets to accelerate the scaleup of commercially-viable mini-grid business models as part of the energy access agenda.

Mini-grids (also commonly-known as “micro-grids” or “island grids”) are power generation systems—typically 10kW to 10MW in size—based on solar, hydro, biomass, wind and/or diesel.

• Mini-grids serve a wide range of customers, from households in small villages1 , to small businesses and larger anchor clients that off-take the bulk of the electricity produced.

• Connected to an isolated distribution network, they can also serve as electricity storage systems or, if and when the central grid arrives, helps to strengthen “last mile” reliability.

▪ In January 2017, IFC released the results of a benchmarking exercise distributed energy services companies (DESCOs) using mini-grid technologies:

• The objective of the analysis was to develop quantitative data on the sector to help refine interventions to catalyze the growth of, and increase investor interest in, mini-grid DESCOs.

• In this context, IFC engaged with 20 mini-grid developers and operators to better understand the range of business models that they are implementing, the outcomes of their operational experiences and their financial returns to date. 3 1 Comprising no more than several hundred households 2 Eleven of the 20 developers participated in both the 2016 and 2017 exercises. All the participants in 2016 are still in business

This document is an update of the 2017 results, and shares our latest findings and insights, with particular focus on residential customers

 


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