Financial and Operational Bundling Strategies for Sustainable Micro-Grid Business Models
Micro-grids are expected to play a critical role in providing electricity access to the roughly 600 million people in Sub-Saharan Africa who currently lack electricity. Private investment in the micro-grid sector will be necessary for the sector to scale, but it has been slow to take off in Sub-Saharan Africa because of the high level of risk relative to reward and the relatively high transaction costs as compared to larger grid-tied projects.
This report starts off by reviewing the main elements of micro-grid business and financing models to provide necessary context. It then examines different areas of operational bundling to improve the viability of micro-grid developers and their projects. The next section considers different forms of financial bundling. Finally, the report includes two case studies which show novel approaches to micro-grid deployment and financing.