Decentralized Electrification Pathways in Sub-Saharan Africa—Assessment of Experiences and Business Models

Abstract

Abstract The transition to “SDG7 -modern and sustainable energy for all” may reconfigure the lives of citizens who live “outside the grid” in the rural communities in sub-Saharan Africa. The decentralization approach for developing renewable energy in sub-Saharan Africa has constantly been promoted as a means to rural electrification. This paper reviews the barriers to private sector participation in decentralized electrification projects and the solutions that have been proposed and implemented. It is not only the economic approaches that are analysed but also some of the solutions or drivers that have contributed to rural electrification. There are specific technological pathways which have proven fruitful in sub-Saharan Africa that are unique to its economic and demographic settings and that otherwise would not be adopted or used in developed countries. This paper finally analyses these technological pathways with the objective of matching the drivers and obstacles to potential solutions. Long term energy planning with the integration of regional power pools is instrumental to reduce CAPEX as well as to increase the market size. Blended financing together with already working technologies such as pay-as-you-go, and mobile money will be the pillars to meeting SDG7 goals.