2. LIVING OFF-GRID
IEA estimates that
530m Africans will still
live off-grid by 2040
although 950m will
have gained grid access
Sources:
Global & Africa data: Off-grid market
trends report, 2016
ECOWAS data: based on World Bank
electricity access data
3. Click to edit Master title style
ESTIMATED ANNUAL SPEND ON OFF-GRID
LIGHTING & PHONE CHARGING (2014, USD BN)
Source: Bloomberg New Energy Finance,
UNEP, GSMA, World Bank
AFRICA
Note: mobile phone charging assumption: one weekly
charge at $0.15. Technology breakdown is based on
UNEP estimates for 2010. Solar lighting expenditure
refers to Lighting Global quality-verified products only.
10.8
0.8
0.8
2.0
2.4 0.1 17.0
KeroseneKerosene
lamps
Battery
torches
Candles Mobile-
phone
charging
Pico-
solar
Total
People living off-grid spend an
estimated USD 17 billion
annually on alternative sources
of energy
5. Off-grid opportunity: growing menu of technology and business
models for ALL
5
Makes off-grid electricity more attractive and available – both for the poor and better-off
households
Overlapping technologies and business models to choose from
Possibility to satisfy varied income levels and geographic/demographic
conditions
Makes it easier to climb the energy ladder
Device sales
(mostly lanterns)
PAYG
Rent to own…
(lanterns/SHS)
PAYG fee for service
(kits/SHS)
Village micro-grids
Larger grid-quality
mini-grids
Grid
• Expanding fast
• Allows customers to
afford higher service
level
• Scalable business
model
• Most investment ready
8. Definition of mini-grid
8
For the purposes of this program, the term ‘mini-grid’ is amply defined and includes
the following:
• A mini-grid is defined here as a small power source that utilizes hydropower,
solar photovoltaic, biomass or any other energy source (or a combination of
sources, or ‘hybrid)’ that supplies a local distribution grid connected to domestic,
business and institutional customers in a defined area
• Hybrid mini-grids use multiple generation technologies or resources in order to
improve reliability of supply
• Mini-grids can be either stand-alone or connected to the grid
• Operated by private entities
• Other terms that are often used interchangeably with mini-grids include micro-
grids, small power producers (SPPs), etc.
9. ..and to attract the investment required to grow,
mini-grids must have certain characteristics…
Demonstrated
(or believable)
profitability
Robust business
model
Experienced team
Steady revenues
Manageable costs
Ability to generate income,
without over-reliance on
(often unpredictable)
subsidies
Understanding of the
market
Credible approach to
serving customers
Clear strategy for long-
term growth
Knowledgeable leaders
Good management with
deep sectoral expertise
Well-trained workforce
Source: IFC analysis
10. Capturing the mini-grid opportunity in Africa
Source: IFC analysis
• Mini-grids are considered
to be technically- and
commercially viable for
high-density populations
(>125 people per km2).
• In some countries, mini-
grids represent a viable
option to improve access
to electricity.
• Most countries have
limited access to
electricity via the national
grid.
• Countries face financial
limitations to extending
the grid
• Government and other
players need to establish
a strong enabling
ecosystem to support
mini-grid penetration
How to help companies to
effectively capture mini-
grid opportunities in the
region?
11. … joint initiative of IFC and the World Bank to accelerate the development of
markets for clean off-grid energy products in sub-Saharan Africa.
… mobilizes the private sector to build sustainable markets that will provide
millions of people in Africa not connected to grid electricity with clean,
affordable, quality lighting products, most of which are solar powered.
Lighting Africa
12. Profitability
Break
even
MaturityProof of conceptBusiness model development
12
CATALYZING MARKET DEVELOPMENT AND
TRANSFORMATION, NOT DELIVERING SERVICES
Market
Intelligence
Quality
Assurance
Business
Support
Consumer
Education
Catalyzing
Venture
Financing
Catalyzing
mainstream
Investment with
Financial
Institutions
Lighting Africa operates along the market transformation curve,
focusing on specific market support/development activities
Addressing regulatory constraints
Technology/Business model
advancement
Advisory
Services
Investment
13. CATEGORIES OF PICO-PV & SHS
Category
by Power
Category
by Services
Corresponding Energy Access Tier
Pico
PV
< 1.5 Wp “Task Light”
Single Light only
Systems can provide a person with basic lighting
access and contribute to meeting a person &
households Tier 1 Electricity Access needs
1.5 – 3 Wp “Area Lighting & Mobile”
Single Light & Mobile Charging
More powerful systems provide Tier 1 Electricity
Access to at least one person and contribute to
meeting a households Tier 1 Access
3 – 10 Wp “Solar Lighting System & Mobile”
Multiple Light & Mobile Charging
Systems provide Tier 1 Electricity Access to more
than one person, up to a household
SHS
11 – 20 Wp SHS, Entry Level (3-4 lights,
mobile charging, radio, fan etc)
Systems provide Tier 1 Electricity Access to a
household
21 – 49 Wp SHS, Basic capacity
(as above, plus power for TV &
extended capacity)
More powerful systems can provide Tier 2
Electricity Access to a household when coupled with
high-efficiency appliances
50 – 100 Wp SHS, Medium capacity
(as above, plus extended
capacities)
Systems provide Tier 2 Electricity Access to a
household
> 100Wp SHS, Higher capacity
(as above, plus extended
capacities)
Systems provide Tier 2 Electricity Access to a
household
14. ECONOMICS OF PICO-PV
Payback period for $13
solar light (in months)
Source: Off-grid solar market trends report, 2016
Assumptions – Kerosene is the reference
technology. 3.85 hours use per day, at 0.03
litres/hour and latest available kerosene retail
prices
15. A FEW LESSONS LEARNT
Quality Assurance: critical to prevent market spoilage.
Quality bureaus have a big role.
Market Intelligence: need to understand the consumers
Consumer Education: helps build awareness, knowledge & adoption
Business Development: without deep retail distribution, gains may be lost
Access to finance: The entire value chain needs A2F. Work with (M)FIs,
Development institutions
Policy: Government support to remove barriers, e.g. tariffs, VAT, business
bottlenecks
Recognition of the potential of the off-grid products to help change lives
Off-grid is one of the options – grid & off-grid can be complementary
Impact: Off-grid energy products can have a great impact on people’s quality of
life (health, savings), business, educational outcomes, social life.