The small green solution to Africa’s big electricity problem

“Having a large transnational power distribution network that’s rolled out across the African continent doesn’t seem like a technically or economically viable solution, given the geography and the distances involved,” says Sergio Pimenta, the International Finance Corporation’s (IFC’s) regional vice-president for Africa.

“Because of this, distributed systems are becoming really important methods for bringing access to electricity across much of the continent, especially in rural areas.”

While small-scale solar systems are not a new phenomenon, they have assumed an increasingly important role given the travails of utility providers. The installation of home solar systems accounted for more than half of access increases in sub-Saharan Africa during 2022, according to the IEA, following government programmes to reduce their cost in countries such as Nigeria, Kenya and Rwanda.

The spread of solar kits that serve not only individual homes but smaller communities has increased in recent years as equipment and installation costs fall, with innovative pay-as-you-go financing models offered by providers such as M-Kopa, Sun King, Engie Energy Access and Lumos. This approach enables homes and communities to access electricity and lessen their usage of kerosene, a widespread fuel used for lighting, cooking and charging mobile phones.

Results-based financing (RBF) programmes — government and DFI-led initiatives under which funding payments are released when pre-agreed results have been achieved — have proved a particularly effective model in key markets on the continent to crowd in the private sector.