REPORTS

More than half of the 1 billion people in the world without electricity live in Sub-Saharan Africa, and rapid population growth is projected to outpace electric grid expansion. For communities across the region, a consistent and affordable supply of electricity can open new possibilities for socioeconomic progress. Mini-grids—electrical generation and distribution systems of less than 10 megawatts—can play a role. These decentralized technologies are expected to bring power to 140 million Africans by 2040.

Tanzania is a regional leader in mini-grid development. In 2008, it adopted a groundbreaking mini-grid policy and regulatory framework to encourage investment in the sector. Since then, the number of mini-grids in the country has doubled. The national utility (TANESCO), private businesses, faith-based organizations, and local communities now own and operate more than 100 mini-grid systems. Energy leaders across the region can learn from the country’s experience.

This report is the first major survey of Tanzania’s mini-grid sector. In it, we shed light on lessons from Tanzania that can help accelerate mini-grid deployment across countries in Sub-Saharan Africa. Our analysis points to three key actions for governments and practitioners across the continent:

• Create an adaptive and responsive policy approach: In 2015, Tanzania revamped its 2008 framework to create better market conditions for renewable energy. By shifting from a technology-neutral feed-in tariff system to one that is technology-specific, regulators are encouraging developers to invest in renewable energy mini-grids.
• Focus on the entire mini-grid ecosystem: Developing mini-grids involves navigating various permitting requirements beyond the electricity sector: environmental clearances, business licenses, siting approvals, and others. Delays in obtaining such clearances and permits can stall progress and slow down deployment. In Tanzania, a slow environmental clearance procedure delayed the deployment of some mini-grids despite a streamlined regulatory process.
• Invest in both qualitative and quantitative assessments of the development impacts of mini-grids: While we can document the scaling of mini-grid deployment in Tanzania, the evidence on the impacts of mini-grids on local development is anecdotal. To make the linkages between mini-grids and development clearer and encourage further investment, mini-grid developers must build an analysis of development impacts into mini-grid project design. Developers can partner with academic institutions and other research agencies to conduct such analyses.

This comprehensive study will be valuable to the large and growing community that is banking on mini-grids to transform energy access in Africa: government officials and regulators; entrepreneurs and private investors; and multilateral, bilateral, and philanthropic funders. Key recommendations, such as streamlining the permitting process and creating a central database on the status of mini-grid initia-tives, could provide an action check list for those who wish to accelerate mini-grid development. 

Mini-grids have potential to be a transformative solution for communities across Sub-Saharan Africa. New technologies, innovative finance mod-els, informed investors, and ambitious government targets are aligning to make rapid growth possible. Now is the time for the region’s energy leaders to review experience to date and act