The document discusses opportunities for off-grid energy in West Africa. It estimates that 530 million Africans will still live off-grid by 2040, though grid access will reach 950 million. Currently, people living off-grid spend an estimated $17 billion annually on energy sources like kerosene, batteries, candles, and phone charging. The majority have a daily income of less than $2. Mini-grids and expanding access to solar products present opportunities to provide power to rural populations, though enabling policies and investment are needed to develop off-grid energy markets.

1. Off-grid energy opportunities
in West Africa

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

4. 0
20
40
60
80
100
120
140
160
180
200
Nigeria
Ethiopia
SouthAfrica
Tanzania
Kenya
Sudan
Uganda
Ghana
Mozambique
Madagascar
Cameroon
Angola
Coted'Ivoire
Niger
BurkinaFaso
Malawi
Mali
Zambia
Zimbabwe
Senegal
Chad
<2 2-10 10-20 20-50 >50 Total off-grid populationDaily per capita income in $:
ESTIMATED POPULATION BY PER CAPITA INCOME
LEVEL (USD/DAY): AFRICA
Note: Income levels are expressed in 2011 purchasing power parity dollars. Source: Bloomberg New Energy Finance,
World Bank, Pew Research Center
The majority of people living off the
grid have a daily income of less than $2
A large share of the population with
$2-10 daily income is likely to live off-
grid

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

7. Mapping the Off-Grid Opportunity

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.