| Overview : The global Sustainable Energy for All (SE4All) initiated by the UN in 2010 aims to achieve universal energy access, improve energy efficiency, and increase the use of renewable energy. In 2015, the world’s leaders came together to agree on 17 Sustainable Development Goals (SDGs) and the SE4All goals were confirmed again as SDG#7 to be achieved by 2030. Malawi is at the cross-roads of rural electrification. The rate of rural electrification is quite low, about 2% reportedly had access to the national power grid in 2009/10. Also, other countries in the region have low rural electrification rates, e.g. Rwanda, 5% (2000), Zambia, 3% (2009), Tanzania, 7% (2010-12). Many countries in the region have enthusiastically joined the global SE4All initiative and have formulated or are in the process of formulating SE4All Action Plans (with an accompanying Investments Plan or Prospectus). Also, Malawi aims to achieve universal access by tripling the national electrification rate in terms of connections to the grid (from 10% in 2015 to 30% in 2030) and mini-grids and provide at least basic access by means of solar home and pico-solar systems. As part of the privatization drive and promotion of private sector participation, the focus over the past decades has been on larger grid systems that essentially are meant to supply power to national grid systems. Until recently, mini-grids have been given less attention as a means for electrification, not only in Malawi but also worldwide, in comparison with on-grid (extension of the main grids) and off-grid stand-alone applications. Mini-grids are not considered by utilities that traditionally focus on grid extension, fall outside the private sector approach (commercially selling energy solutions, such as solar PV) and are too big in size for NGOs to be implemented on a larger scale. Most mini-grids have been implemented by NGOs or government agencies with donor funding or by rural enterprises (e.g. tea estates) for their own power supply. Realizing that grid extension on one hand and pico solution on the other hand may not be enough to reach the SE4All energy access goal, clean energy mini-grids (10 kW to 10 MW) are increasingly seen as a viable solution for rural electrification. These can be a viable and cost-effective route to electrification where communities are far from the national grid or where population is not dense enough to justify a grid connection before other communities on one hand, but demand of households and local business is at such a level that cannot be provided by off-grid solar home or pico-solar system. The challenge has been to provide adequate financing and management and operation models for mini-grid systems, that range from pure utility or government agencies model, to private sector utilities, community-driven ownership-operator models and hybrid combinations of these. A model that has got attention in Malawi, is clean energy mini-grids implemented by ‘social enterprises’, i.e. community-based with social objectives, but operating according to commercial principles. A first hydro-powered mini-grid for rural electrification has been established in 2013/14 by the local Mulanje Electricity Agency (MEGA) in the Lichenya River. MEGA is the first operational private energy company and operates as a ‘social enterprise’. The MEGA business model requires donor grant funding for development and commissioning of micro-hydro turbine sites and power distribution and focuses on making energy available and affordable to its target market, but within the parameters of building a financially sustainable business. To achieve this, MEGA’s business model. The MEGA business model has attracted interest from donors and international organizations (such as UNDP) and the lessons learned (development, operation, administration, tariff-setting, pre-paid metering) could be replicated to other mini-grids. The model that MEGA is using is being studied by UNDP to learn how the positive aspects of the scheme can be replicated across Malawi, where further funding for mini-grids should be targeted and where the Government should make appropriate policy and regulatory changes. Against this background, UNDP and Malawi’s Department of Energy Affairs are implementing the project Increasing Access to Clean and Affordable Decentralized Energy Services in Selected Vulnerable Areas of Malawi with financial support from the Global Environment Facility (GEF). The project will be implemented over the period 2016-2018. Its objective is “To increase access to energy in selected remote, rural areas in Malawi by promoting innovative, community-based mini-grid applications in cooperation with the private sector”. The project’s objective will be achieved by means of the following outcomes and outputs. |
