Exploring models for public-private collaboration in clean energy access
On the 8th September 2023, the African Climate Action Partnership (AfCAP) together with Camco, Rocky Mountain Institute (RMI), Growing Government Engagement in Energy Access (GGEEA) and African Association for Rural Electrification (CLUB-ER) hosted an official side session entitled “Exploring models for public-private collaboration in clean energy access” during Africa Climate Week. This session explored the key enabling mechanisms that facilitate mini-grid deployment as well as focusing on the challenges and successes experienced by both the private and public sector in aligning priorities and actions.
The first part of the session focused on how the public sector is working towards increasing energy access in Africa , the acceleration of the deployment of mini-grids and the current challenges and opportunities that African countries face when it comes to electrifying rural areas using Kenya and Liberia as examples. The panel discussion kicked off with Steven Payma from the Rural and Renewable Energy Agency in Liberia (RREA). Payma explained that REA in Liberia has attracted their private sector to invest into the public by enabling policy and regulation environment partnerships in the public-private sector for clean energy access in Liberia. Payma, indicated that Liberia’s National Electrification Strategy targets are set to achieve universal access to energy by 2030. So far, 30% of Liberia’s population in urban areas have access to electricity and only 8% of rural areas have access to electricity. Payma explained that Liberia has both solicited and unsolicited projects running with the involvement of the private sector. He noted that it is key to involve the private sector to attract investment in order to increase energy access and create an enabling policy and regulatory environment. A key message coming out from his discussion was that the national energy utility needs to be unbundled and the sector needs to open up to independent power producers. Such public-private collaborations would support clean , universal energy access.
The second speaker was Eng. Maxwell Ngala from the Rural Electrification and Renewable Energy Corporation of Kenya (REREC). Ngala was tasked with explaining the current challenges to electrifying rural areas in Kenya and what the opportunities are for mini-grids in aiding the achievement of this target. Ngala explained that REREC has a pilot project running in the area of Kenya, called Wajiha. This project has rolled-out 35 mini-grids through mission projects. Ngala indicated that the main challenges faced are technical, institutional and financial. When it comes to planning and the deployment of mini-grids, it’s important to understand the available technologies and to determine which are the most suitable for the context to meet the needs of the local community, Ngala explained.
The discussion shifted towards the private sector. This portion of the panel discussion focused on exploring options for improved collaboration, specifically on how the private sector can act as an implementing partner in realising governments’ NDC targets. Ieva Indriunaite from Camco kicked off this part of discussion by explaining the challenges Camco experienced in funding viable mini-grid projects.
Indriunaite explained that when it comes to the gaps in energy access and viability for climate finance the key challenge is limited access to funding which makes scaling a challenge for the continent. Indriunaite expressed that inorder to enable the large-scale deployment of mini-grids, it requires blended finance. Attracting private sector funding requires regulatory frameworks that are clear, transparent and implemented in a timely manner to de-risk financing. A key message from Indriunaite, is that governments should view mini-grid developers as partners, not as competitors. The private sector can mobilise solutions quickly and these solutions can be integrated into national grids and taken over by the public sector at a later stage.
The next speaker was Aaron Leopold from EnerGrow. Leopold shared some of his experiences of what enables effective collaboration with the public sector. He was in agreement with Indriunaite’s statement to not only involve the private sector in the later stages of the national plan for mini-grid deployment. Leopold explained there is a need for collaboration between the public and private sector at the start of the design process. He indicated that Energrow works to accelerate electrification by looking at the demand side. The organisation looks at how to improve energy demand in rural communities so that mini-grid companies can improve their tariff. A key takeaway message from Leopold was that there is a need to find creative ways to collaborate in the public-private partnerships to support mini-grids, for example, micro-financing and engaging with consumers to understand what they need in their localised contexts.
Our last speaker for the panel discussion was Suleiman Babamanu from the Rocky Mountain Institute (RMI). Babamanu shared his insights on how the RMI aimed to support the transformation of energy systems in Africa and what steps they are taking to enable greater private sector investment. He noted that it is possible to enable greater private sector investment by linking energy access to economic development which remains a challenge for Nigeria. Babamanu explained that RMI does collaboration through understanding the context of the country. For example, Nigeria works on 2 main pillars; 1) Scaling and distributing energy resources, and 2) Deploying efficient demands for productive use. Babamanu indicated that the African Mini-grid Programme (AMP) aims to ensure that government and private developers are working together to create an enabling environment to ensure the transformation of energy systems and greater private sector investment through applying cost reduction techniques and innovative businesses.
In closing, the panellists had an opportunity to give their final reflections on how we can align the priorities of the public and private sector when it comes to energy access. Ngala shared his thoughts and expressed that it is important for the private and public sectors not to work in silos. Indriunaite explained that the private sector lacks accessibility to planning and national planning documents. She felt that it should not be seen as a competition between the private and public sector as both sectors have a common goal of providing energy access to all. Ngala, agreed with Indriunaite on the lack of access to information and data and stated that local data needs to be generated and accessible to both public and private users to enable planning for mini-grids in Africa.
AfCAP aims to continue engagements around creating enabling environments for mini-grid deployment through the Africa Mini-Grid Community of Practice (AMG-CoP) and the Growing Government Engagement in Energy Access (GGEEA) project. If you would like more information on these activities please contact us on firstname.lastname@example.org
This activity was co-funded by AfCAP and GGEEA. GGEEA is funded with UK aid from the UK government via the Transforming Energy Access programme.