The Mini-Grid Business

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Minigrid scale-up efforts are currently falling short of meeting SDG 7 targets, particularly in Africa, where private minigrid companies must evolve and professionalize to achieve sustainable growth. With limited capital available for building the next generation of top-tier utilities, the sector faces a significant corporate financing gap. At the same time project finance tailored to minigrid needs remains scarce.

In this episode, we delve into the complexities of minigrid financing with experts Cliff Aron from GreenMax Capital and John Ouko from the Africa Minigrid Developers Association (AMDA). We explore the historical challenges of rural electrification, emphasizing the urgent need for development capital to support emerging companies. We also discuss the transformative impact of investing $100 million in human resource development for selected developers and the creation of a billion-dollar minigrid infrastructure fund to attract private investment.

Our conversation addresses the potential for a paradigm shift in minigrid financing, examining current and future financing instruments that could support this transition. We also consider the role of government in facilitating this shift and how minigrid companies might need to adapt their business models to align with the evolving financing landscape.

Tune in to discover how innovative financing solutions can pave the way for a sustainable and scalable minigrid sector.

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Project finance has been instrumental in scaling large, grid-connected renewable energy projects, with well-established approaches that have facilitated trillions of dollars in lending to the sector. The result has been access to low-interest, long-term financing. This is exactly what mini-grids need to achieve similar success and growth. Like large-scale renewable power systems, mini-grids are critical infrastructure, yet they face unique challenges, particularly the risk associated with selling power at the retail level. Additionally, mini-grids differ from large-scale renewable projects in their stakeholder structures.

In this episode, Kellie Murungi, Head of Business Africa at INENSUS, joins host Nico Peterschmidt, CEO of INENSUS, to explore the principles of project finance and discuss what it will take to make mini-grids viable for this type of financing.

Discover why a wave of mergers and acquisitions is anticipated in the mini-grid sector, and how diversifying revenue streams through rural industrialization, edge computing from surplus electricity, and renewable energy certificates can make mini-grids more attractive for project finance.  Additionally, learn how, over time, the financing sector may become more familiar with mini-grids as a new asset class.

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Twitter: INENSUS (@INENSUSgmbh) / X (twitter.com)
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Mini-Grid CEOs have long voiced concerns over the inconsistent and overly complicated funding methodologies that vary significantly across different funders and countries, leading to prolonged delays in electrification efforts. Similar frustrations are echoed in the processes of securing equity and debt.

Host Nico is joined by Kyle Schutter from Sunlight Reviews and Ashish Shrestha from the World Bank’s ESMAP to discuss these challenges. Kyle shares insights on how Sunlight Reviews is helping stakeholders better assess funder reliability and timelines, while Ashish explains how ESMAP is responding to industry feedback to improve program designs. This episode offers a deep dive into the efforts being made to streamline funding processes and accelerate progress in the Mini-Grid sector.

Resources mentioned in this episode:

Sunlight Reviews - Discover the Best Funders in Africa

https://80000hours.org/podcast/episodes/mushtaq-khan-institutional-economics/ 

LinkedIn: https://www.linkedin.com/company/inensus-gmbh/mycompany/
Twitter: INENSUS (@INENSUSgmbh) / X (twitter.com)
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Interconnected Mini-Grids provide reliable electricity to underserved main-grid connected customers.
They are a new phenomenon in the mini-grid space and beyond that provide profitable investment opportunities to mini-grid companies thanks to significantly larger electricity demand in semi-urban areas, where interconnected mini-grids are typically situated compared to rural sites, where isolated mini-grids can typically be found.
Can interconnected mini-grids become the "leapfrogging" opportunity that the sector has been waiting for?
Aaron Cheng from Power Gen, operating an interconnected mini-grid in Nigeria and Chris Greacen who published a book covering the interconnected mini-grid subject discuss the above subjects with host Nico Peterschmidt.

Resources:
 
Mini Grid Solutions for Underserved Customers: New Insights from Nigeria and India Open Knowledge Repository (worldbank.org)

Mini Grids for Half a Billion People: Market Outlook and Handbook for Decision Makers (worldbank.org)

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Twitter: INENSUS (@INENSUSgmbh) / X (twitter.com)
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In this flagship episode, we uncover the transformative power of Rural Industrialization through mini-grids with insights from industry leaders Peter Nyeko of Mandulis Energy (Uganda), Camille André-Bataille of Anka (Madagascar), and Oluwatobi Soyombo of Havenhill Synergy Limited (Nigeria). The host Nico Peterschmidt of INENSUS (Tanzania, Uganda) contributes with his own experience in Rural Industrialization.

We discuss
- effort vs. profitability.
- risk increase vs. decrease through linking two businesses to each other while diversifying revenue streams.
- combining rural development with company profitability
- how to scale electricity and product sales fast

We share lessons learned and obstacles overcome.

Here are some resources mentioned in this epoisode:
- KeyMaker Model fundamentals (afdb.org) - for the INENSUS' Rural industrialization model
- AgriGrid - EnAccess - for the ANKA's Rural Industrialization model
- Please also search the internet for "Reparle AND Uganda" to learn more about Mandulis Energy's Rural Industrialization model

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Twitter: INENSUS (@INENSUSgmbh) / X (twitter.com)
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This is part 2 of the meeting between Olu from "The Energy Talk" and Nico from "The Mini-Grid Business". In this session, we delve into the complexities, breakthroughs and innovations within the mini-grid industry based on Olu’s extensive knowledge of the electrification landscape across Africa.

Below are some links to "The Energy Talk" -  listen to these highly informative and entertaining interviews!

https://podcasts.apple.com/us/podcast/the-energy-talk/id1467655589

https://open.spotify.com/show/4FQMxAZ43y6QIs5UtIHHfg

https://theenergytalk.simplecast.com/episodes

LinkedIn: https://www.linkedin.com/company/inensus-gmbh/mycompany/
Twitter: INENSUS (@INENSUSgmbh) / X (twitter.com)
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As a podcaster, you meet people and gain a good overview of what the sector is all about. Therefore, it is sometimes enlightening to talk to fellow podcasters and get their view on the sector. That is exactly what Olubunmi Olajide from the podcast "The Energy Talk" and Nico Peterschmidt from "The Mini-Grid Business" did during the Energy Access Investment Forum 2024 in Lagos.

This is part 1 of this recording, where Olu interviews Nico for his podcast "The Energy Talk".  As a listener of "The Mini-Grid Business," this might be more of a summary of familiar topics. In part 2, Olu and I will enter into a discussion about innovations in the mini-grid sector.

Part 2 of the recording is published as a separate episode.

Below are some links to "The Energy Talk" -  listen to these highly informative and entertaining interviews! 

https://podcasts.apple.com/us/podcast/the-energy-talk/id1467655589

https://open.spotify.com/show/4FQMxAZ43y6QIs5UtIHHfg

https://theenergytalk.simplecast.com/episodes

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Twitter: INENSUS (@INENSUSgmbh) / X (twitter.com)
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Mini-grid consultants support the establishment of regulation or grant funding programs for the sector, advise on transactions or conduct due diligences. However, recent years have seen growing tensions between consultants and mini-grid companies. 
 
Host Nico confronts consultants Moses Kakooza (independent consultant, Uganda) and Maylis Bravard (INENSUS, francophone team) with some of the frustrations mini-grid companies express. 

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Twitter: INENSUS (@INENSUSgmbh) / X (twitter.com)
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Mini-Grid Due Diligences are always complex and costly? - Wrong!

The Mini-Grid Due Diligence One-Stop-Shop established by INENSUS, DETAIL Solicitors and Steinbeis Consulting Impact Investing reduces complexities by providing one contact point for all parts of a mini-grid due diligence (demand, technical, commercial, legal, environmental, etc.). Efficiency and quality gains from this coordinated approach to mini-grid due diligences are the result and may even unlock financing for portfolios of projects that have so far been too small to run through a financing process.

Listen to the commercial lawyer Dolapo Kukoyi (DETAIL) and the impact investing expert Lothar Jakab (Steinbeis) as they discuss the benefits of the Due Diligence One-Stop-shop with their host Nico Peterschmidt (INENSUS).

Impact Investing (steinbeis.de)

Detail Solicitors | Nigeria's first commercial solicitor form specializing exclusively in non-courtroom practice

LinkedIn: https://www.linkedin.com/company/inensus-gmbh/mycompany/
Twitter: INENSUS (@INENSUSgmbh) / X (twitter.com)
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Unlock the hidden complexities of mini-grid company valuation with the brilliant minds of Brian Lukera Wambani from Camco and Michael Feldner from the GET.invest Finance Catalyst. This episode promises to equip you with the nuanced understanding required to navigate the valuation challenges faced by mini-grid enterprises, which operate at the crossroads of traditional utilities and agile startups. We tackle the pivotal questions: How do investors perceive the value of these companies, and what factors should CEOs and CFOs weigh when determining their company's worth?

LinkedIn: https://www.linkedin.com/company/inensus-gmbh/mycompany/
Twitter: INENSUS (@INENSUSgmbh) / X (twitter.com)
Visit www.inensus.com for more info.