How mini-grids can help bridge the electrification gap in Africa

In June last year, the International Energy Agency revealed a staggering statistic - at least 600 million people in Africa lack access to electricity. The urgency to achieve universal energy access by 2030 is becoming more pressing as time ticks away. Recently, CNBC Africa had a conversation with Matt Tilleard, the Co-Founder and Managing Director at Crossboundary Group, shedding light on the crucial role mini-grids can play in bridging this significant gap. Tilleard pointed out that while the issue of 600 million people without electricity in Africa is often mentioned, the reality is still visceral and frightening. Despite efforts to connect more people to electricity each day, the progress is unable to match the population growth rate. The onset of the COVID-19 pandemic exacerbated the situation, leading to an increase in the number of people without access to electricity. A call for a new approach is evident, and Tilleard believes that distributed solar and storage offer a promising solution. Mini-grids, encompassing distributed solar and storage systems, are identified as a cost-effective means to connect approximately 260 million out of the 600 million underserved individuals. This highlights the substantial impact mini-grids can have in addressing the electrification challenge. Whether developed by the government or private enterprises, mini-grids remain the most economically feasible option in the quest for widespread electrification. The involvement of private capital, alongside support from governments, is deemed vital in accelerating progress towards providing electricity to millions in need. While the financial requirement to connect 260 million people through mini-grids amounts to a staggering $187 billion, Tilleard draws a comparison to historical investments, emphasizing the significance of the cause. Space exploration in the 1960s saw funding of $702 billion to land a man on the moon, making the pursuit of universal energy access equally worthy. Crossboundary Group's approach to project financing and open-sourcing innovations aims to attract private infrastructure capital into the market. Tilleard advocates for a shift in traditional infrastructure finance models to stimulate progress in extending energy access to the underserved populations across the continent. The potential implications of achieving universal energy access through mini-grids are vast. Crossboundary Energy, a subsidiary focusing on distributed solar and storage solutions for businesses, recently secured $40 million in additional funding, solidifying its position as the largest distributed solar utility provider for businesses in Africa. By addressing the primary challenges cited by African businesses, namely access to finance and reliable electricity, Crossboundary Energy paves the way for economic growth and prosperity. Moreover, through Crossboundary Energy Access, rural communities gain access to electricity, unlocking new economic opportunities and fostering development. Tilleard underscores the importance of forming the right partnerships to navigate the evolving energy landscape. With the rapidly declining costs of technology, coupled with increasing entrepreneurial activity and donor support, the momentum towards a distributed energy future is building. However, the transformation necessitates comprehensive regulatory reforms in the electricity sector. Tilleard emphasizes the critical role of visionary leadership by governments to embrace the potential of distributed energy technologies and drive systemic change. To capitalize on the influx of capital and entrepreneurship aimed at enhancing energy access, Tilleard calls for clear and consistent regulatory frameworks, equitable subsidies, and transparent systems. These policy recommendations are crucial in unleashing the transformative power of innovative technologies and private sector initiatives in addressing the energy access gap in Africa.