Financing and de-risking tools and approaches for solar mini grid projects in fragile contexts
Solar mini grids are an increasingly competitive and financially viable option to meet the significant energy deficits in fragile settings, but affordability constraints remain prevalent. This toolkit explores a range of innovative financing mechanisms and de-risking tools that could be leveraged to help overcome affordability constraints and ensure that mini grids can reach people living in settings of fragility and displacement.
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Asare and Logan Policy toolkit September 2024.pdf
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This paper provides evidence to inform policy decisions around financing solar mini grid projects and structuring private sector involvement in distributed renewable energy (DRE) projects in fragile and conflict-affected situations (FCS). It is intended to help equip policymakers in fragile settings with an understanding of the key financial challenges facing the DRE sector in FCS and information on financing and de-risking tools and approaches they can work with mini grid project funders to leverage in order to better support economic viability and sustainability of mini grid projects in their countries.
To progress DRE investment in fragile settings, collaborative efforts are required from a range of stakeholders, including donors, development finance institutions (DFIs), philanthropic entities, private investors (both domestic and international), and energy project developers. Consequently, this paper outlines important lessons for other key stakeholders too.
The technological scope of this toolkit focuses on solar mini grids. However, these are only part of a necessary wider, integrated energy strategy that should include additional off-grid and grid-based technologies. Where relevant, we draw lessons from other technologies, such as solar home systems, and endeavour to ensure that this toolkit has lessons that can also be applicable for other technologies beyond the core focus of mini grids.