The webinar on November 9, 2022 built upon the previous broadcast which analysed the status quo and ways forward for the fundamental development of electricity access in Sub-Saharan regions. This time however, the focus shifted more towards the financial, development and regulatory side of mini-grids.
Electricity mini-grids are increasingly becoming a key component of countries’ electrification plans, and their development requires appropriate regulatory frameworks. However, the market for mini-grids, and mini-grid financing in particular, is still very new. It is critical for regulators to understand how these markets are developing when designing regulations, including the allowance for the recovery of financing costs in tariff determinations, and not to simply adopt practices from other electricity systems
Setting cost of capital benchmarks that the market is unable to support will discourage investors and developers and hinder the achievement of electrification targets. Some key challenges of cost of capital determination that should be addressed are the market-based capital structures of mini-grids, determining the costs of each of the components of the capital structure, addressing gearing that changes during a tariff control period, identifying who should bear currency risk, and assessing whether the traditional cost of capital approach is the most appropriate approach for such a new market. Regulators should also consider how different mini-grid procurement approaches (eg, large-scale concessions) may generate different financing options and alter the determination of cost benchmarks.
The webinar was developed in partnership with:
Andrew Tipping is a Technical Director at Economic Consulting Associates (ECA), based in London, UK, where he leads ECA’s Energy Access team.
Andrew has been involved in the development of mini-grid and other off-grid policies, regulations, financing facilities, market assessments, feasibility studies, and market support initiatives for more than 10 years, including developing mini-grid and off-grid frameworks in several countries and for regional organisations. He has been intricately involved in the research and design of tariff methodologies and structures for regulators and policymakers, and of subsidy structures for development partners, providing advice on both of these to mini-grid developers and financiers.
Andrew’s expertise in this area builds on his work advising national utilities and regulators in both developing and developed markets on tariff reviews and price controls. His expertise also utilises his experience advising national governments and development partners in the preparation of electrification programmes that incorporate mini-grids as one of a selection of potential electrification technologies, giving Andrew a holistic view of electrification objectives and approaches.
Eng. Ziria is the CEO of the Electricity Regulatory Authority (ERA). Until her appointment, she was the Director of the Technical Regulation Department at ERA. She is a Registered Engineer with the Uganda Institute of Professional Engineers and the National Engineers Registration Board, as well as a Member of the Institute of Electrical and Electronics Engineers (IEEE) of New York. She possesses over 30 years of work experience in Uganda’s electricity sector, 12 years of which were in senior management positions. Ziria boasts vast knowledge and insights of the Electricity Supply Industry and its challenges and prides herself in the development of various national and development partner-funded projects, both at national and regional level (from sourcing of financing, appraisal, and feasibility study to construction). Ziria holds an MSc and BSc in Electrical Engineering, both from Makerere University, and a Master of Business Administration in Leadership from Walden University, USA.”.
Mukabanji Mutanuka is a renewable energy and development economist with over 8 years extensive experience in the offgrid energy field. Based in Lusaka Zambia, she is responsible for Business Development of Minigrid innovations across Southern African. Prior to this, she has been responsible for the technical, financial and environmental design and development of off grid innovations in Zambia under the White House Led initiative- Power Africa Offgrid Energy Challenge, where she had direct oversight of development and risk management of a solar micro grid, micro-hybrid systems and distribution of solar home systems. She has recently assisted in consultancy work in the offgrid sector under the EU and is a Board Member of Zambia Renewable Energy Association (ZARENA), and the African Minigirds Developers Association (AMDA), and an Administrator of the Association of Power Companies (APC). Mukabanji strongly believes in the power of integrated energy policy frameworks and off grid innovations as a means to revolutionize sustainable access for majority of rural communities
James Wakaba has been in the energy sector since 2001, his experience spanning energy efficiency, energy generation, energy access and climate change. He has helped design, implement and monitor projects and programs in these areas in more than 25 countries, mostly in Sub-Sahara Africa including South Africa. He has worked for and with Governments, Utilities, the private sector and donors, both local and international in these projects. He has run two renewable energy Independent Power Producers in Kenya and Uganda and two Africa-wide NGOs in the area of energy access. He currently manages assets on behalf of Investor InfraCo Africa, focusing on mini-grid and e-mobility investments. James has a degree in Electrical Engineering from the University of Nairobi, is a registered Engineer with the Engineers Board of Kenya and is a licensed energy auditor with the Energy and Petroleum Regulatory Authority.