Where to go next – Which countries are at the top of the funders’ list? PART 2

Speaker 1: 0:09

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Speaker 2: 0:35

Hello everyone, welcome back to the second part of when to Go Next. Which countries are at the top of the funders list? With Tatja Limonsava from World Bank Asmap, dennis Inderito from G-UP and Benjamin Cournier from AFTB, sefa, let's go straight into the subject. Yeah, when I hear you speak, what strikes me is that some five years back or so, the private sector sent out the message we are ready, governments, where are you? We need the frameworks and we need the funding. Now, ben and Tatja, now what you're saying is a little bit kind of turned around, where you're now saying, well, the governments may be ready now, but the private sector is not speaking with one voice, is not delivering, maybe, or is not ready, needs capacity building to live up to the expectations of the government. Do I get that correctly?

Speaker 3: 1:33

So I think that it's often. There's often this confrontational attitude between both governments and private sector. There's often this expectation that the other will prioritize the needs of the counterpart. But the truth is the governments don't look specifically at many good markets. It's just not their role. The role of the government is to design a comprehensive program to deliver electricity to its people, and it's not even just that, electricity is just it's electrons. It's the role of the government to create social transformation and economic change and support people in job creation, health and education.

Speaker 3: 2:13

So the governments don't really think about the needs of the private sector simply because it's not their job.

Speaker 3: 2:19

Their job is to focus on the people and very often when I talk to developer counterparts, I have to sort of remind them of that because I hear their frustration.

Speaker 3: 2:28

I really do, but I don't think it's helpful to fret that the government doesn't hear you, because it's not the government's role to worry about especially foreign private sector and their priorities and their needs. And that's the same angle that I have to apply when we talk about tariffs, for example, because it's a very painful topic for everyone, and subsidies it's a very painful topic for everyone. But the truth is, if you expect a government to create the right environment for you to come into a country, you will have to also understand the incentives and the priorities of that government and engage in a dialogue Right. So that's kind of where we come in as well. The biggest role is to create that dialogue and that environment where each party understands the other ones needs and priorities and that all of us are here to achieve the same goal, that all of us are here to deliver electricity to people at the lowest possible cost and the highest possible quality and for them to actually achieve the economic transformation that they are pursuing.

Speaker 2: 3:22

Yeah, that's an interesting point. You know, tatja, I have also been part of your team. I had a little bit of insight into how SMAP and World Bank after all works. What I saw is that there are also macroeconomic calculations being performed, like if the government accepts a loan from the World Bank and needs to pay that back after some whatever 30, 40, 50 years or so then it must also make economic sense to them. Well, if they receive, say, half a billion dollars, and this half a billion dollars is then dispersed to private sector mini-grid companies, how do they justify that loan after?

Speaker 3: 4:08

all Because it's cheaper to deliver electricity to their customers through that rather than through taxing their overburdened national grid. Right, and that is how we talk about it with the governments. What is the cheapest way for you to achieve what you're trying to achieve? And that truly is, from my perspective, the most important conversation, because these are all tools for the government to achieve its goals. The grid is subsidized. Mini-grids may also require subsidies. I think we're all understanding that electricity access is expensive and it requires effort and commitment. No country in this world was electrified without subsidies.

Speaker 3: 4:45

The United States had a massive multi-decade national education program with an agency that was dedicated to it, to make sure that all of its citizens eventually got electricity access, and whether that was done through the national grid or through supporting cooperatives that had their own small mini-grids, it was a commitment from the government, and that is the angle that we try to apply when we talk with the governments.

Speaker 3: 5:07

What is the cheapest way for you to reach each segment of the population with the right and most appropriately sized solutions? Because for some communities, the grid is the right solution and the cheapest one, for some the mini-grid makes the most sense and for some their current affordability is such that a tier one or a tier two solution, which is a standalone system, may be the most appropriate tool until they have had more access to appliances and things like that. That would get them up with that ladder to a higher tier service. So that is, from our perspective, how we establish that dialogue is what is the cheapest way for you to achieve what you're trying to achieve with this money that you're borrowing at very low interest but still borrowing on behalf of your people from the world.

Speaker 4: 5:48

And I also add there's an opportunity cost and the ability to deploy just technically a mini-grid is infinitely quicker than grid extension into the more remote areas and that's a massive economic development opportunity cost for governments.

Speaker 3: 6:01

Absolutely, and we factor that one into the calculations as well. Right, I absolutely agree with you, ben, that that is a really important argument that we also work to make is what happens to a generation of children that do not have electricity to study? Right, I know it sounds a very dramatic argument, but it's an important one, because we all know that the countries that we focus on have a very young population and, in order to achieve the jobs and the education goals that the government set out for themselves, they need to have electricity, and they need to have it as urgently as possible, dennis.

Speaker 5: 6:32

Yeah, I do think every government is trying to achieve universal energy access for its people and definitely for very good reasons, that there is a strong correlation with economic development. I think when governments look at mini-grids, they sort of want to really achieve that goal as their first thing, because this is why mini-grids will be embedded in the national energy strategy or national energy plan, whatever a country calls it. But we are at a position where a lot of the low and middle income countries don't have enough headroom to get more public money to support the expansion of the utility, and these are utilities, as Satya mentioned, that are really heavily reliant on government. So I think looking at mini-grids is just trying to open up to more options so that they can continue to achieve their targets on universal access in a way that it doesn't really no-transcript rely fully on them but relies also on financial capital from other sources. The second reason is, I think, despite the industry not having scaled as much as we would have wanted, there is evidence of results where we see many grids going into communities and improving the economies of those communities and I think for government perspective, any increase in the economic numbers, like GDP, atc, is something good for them. So, seeing the capability of many grids, which are developed and managed by developers who are very customer centric and really really put a lot of time and energy into building the demand of these many grids, which, in the case of the user, is building more production, which is more income, which really reduces the load of government in safety nets and ATC, and I think, finally, many grids as is are some of the things that local companies are getting into and I think governments are really happy to support local industries and having part of the value chain going through the local industries is something that is again added to the GDP and also creates a lot of jobs.

Speaker 5: 8:38

When it comes to the private sector, I do think, yes, there is a bit of work that is still needed to convince governments that private sector is the right way to go. Even with all those needs that government has, there's still a lot of questions about whether private sector is the answer for this, and all that is because of the legacy experiences where the utilities have been the mainstay of connecting people. But I think private sector should continuously show proof points that they are actually able to develop a least cost solution where governments feel how money goes a long way into connecting more people than doing grid extensions. So this proof needs to continuously be shown and there needs to be a way to show the progress across years in the way that many grids are continuously becoming low cost, are continuously out competing grid extensions to several areas of our country. And secondly, questions that I've had personally governments ask is the sustainability of the mini grid model itself. So if a mini grid developer comes into our community and connects them, the government immediately marks that community as connected. But sometimes there has been incidences where mini grid developers pull out or the level of service reduces extremely to a very low point that it sort of raises doubts whether this model will be sustainable or whether the companies are in here for the long haul. Or there will be sometimes when an electrified community becomes an electrified, which is really a rare occurrence. But I think that needs to continuously be shown so that the government feels comfortable with supporting private sector and offering policy and regulations that give an enabling environment to the private sector and pushing that to the next level, which is not every private sector will be able to interact with government, because then there will be a lot of information coming in from so many sources. I do think the African mini grid developers association really plays a key role in aggregating a lot of the developer concerns and aggregating the developer data on performance and all these other issues where developers would need to show evidence of why they should be supported. So data first of all. For me is the biggest component that putting together data, putting together performance indicators, because the utility has those and it needs to report those to the regulator or to the government. But mini grids, they're sort of in a line where it's not very clear whether they have to report it. So I think that needs to be a drive from the private sector side to show that they're ready to be accountable, and using AMDA as an umbrella body to put that together and then use that as an advocacy tool is going to be a very strong point for AMDA to do in the coming years.

Speaker 5: 11:20

I sort of agree with the point of AMDA building the capacity of their members. What I feel is, to the point of now, it seems that government is ready and the private sector is not ready. I do think the mini grid environment at the sector itself has evolved over the past couple of years, but we still have the same developers in the same structure they were in a couple of years back. So there's a need to sort of improve their capacity to this industry or factory level thinking, where it's all about efficiency, it's all about going up to scale, etc. So that is needed, and one of the things that developers lack at this moment is the available corporate financing to be able to actually hire the right people who create the pathways towards. You know, this sort of mindset, thinking of scale rather than project by project thinking, and I think AMDA can play a big role in trying to lobby the sector, lobbying the funders, to sort of provide equity finance which gives developers a flexibility to get the right people, probably also reaching out to talents in the market who could become very additive to the sectors. I think AMDA have been discussing a lot about sharing resources, like you know, cfos or CTOs. We're still waiting to see how that is structured, but I do think you know they should really be at the center of trying to figure out the capacity issue.

Speaker 5: 12:44

And the next one is the clarity of direction. So if you are a developer and you went into DRC and you're told they are very good sites because there are million people living in cities and you know as a mini-grip developer. That is really good because you have economies of scale. How do you actually build a site? How do you get to know that place? How do you get to build it? How do you know the taxes, the regulations? So this is not very clear in a lot of frontier markets and I do think AMDA's role as being very close to government can help shape pathway for their developer members so that everyone or every developer understands what they should be fulfilling in several markets. Instead of hiring consultants or hiring people to do that, amda should really be trying to do that.

Speaker 5: 13:30

And probably the last thing for me on the AMDA question is what do they do long term? So now you've worked with government, you've identified performance, you've identified all these things. You've worked with the developers on capacity. What are the other key questions in the sector? And they do things such as supply chain efficiency. So now that you have a big pool of members, maybe about a hundred or so can you use that power to go to OEMs who are providing panels or providing batteries or providing whatever equipment, and start negotiating with them from an umbrella level so that your members can now access this equipment at much cheaper prices can get the economies of scale for this. Is that something that can be structured at the AMDA level? So I think for me that is the end line. Goal is, amda becomes a very good aggregation tool for not only government and advocacy and data, but also on the other areas where aggregation brings a lot of benefits to the developers.

Speaker 2: 14:28

All right, ben Tatia, if you get a request from a government where no framework has been developed whatsoever for mini grids, how do you approach that? Do you say, well, we carry you through until you're ready. Or do you say maybe you want to approach GIZ or whomever to give you a little bit of technical assistance and then come back later when you're ready?

Speaker 4: 14:59

That kind of request we would deal with through our African Minigrid Acceleration Programme, technical Assistance, where we work with beneficiary governments to try and put in place the structures and the tools to promote the development of a private sector-led minigrid market. Where I suppose Tatiya is going to be a little bit more agnostic in terms of the ESMAP and, as she's described, in a much more holistic approach to electrification, we're fairly unashamedly focused very much on the development of private sector-led green minigrid markets and to that end we're presently working through the EMAP Programme in seven countries and there are different levels of that level of preparedness. One example is we're working in Angola where I'd say kind of that's very much at the beginning of that journey, and so there are the kinds of conversations that we're having on much earlier stage and it's really around kind of the political decisions that need to be made that define a market. You know, do you want to use minigrids and by how much?

Speaker 4: 16:08

What is the role of the private sector? Is it purely as an operator or are we looking to try and leverage its capital as well? Where do you want to set the tariffs? Because tariffs is a political input, it's not an output and then, as a function of the tariffs that you want to achieve. What are the longer-term subsidy mechanisms that we can put in place? Because expecting donors to continue to fund until we achieve universal electrification is simply not a credible approach. And then other countries are much further down their pathway, and I think I'm going to repeat Madagascar, or indeed Mozambique, which has you know, in the case of Mozambique, a relatively now well-developed regulatory set of tools but which haven't really been kind of deployed in anger yet, and so we're discussing with that government about how to kind of operationalize those, which involves kind of site identification, structuring of procurement programs and structuring of grant programs.

Speaker 2: 17:02

Does that mean, ben, that CEPA is basically offering all the components? Let me explain a little bit where this question is coming from. My experience shows that governments would never ask for minigrids if there is not an opportunity to receive some funding for minigrid deployment and rollouts, and only once that funding is in sight. They would then also deal with the required regulatory and legal framework. Now, if you approach a government or if they approach you, that is the first question Do they approach you or do you approach them? And once that has happened and you're in contact, do you offer the full package or do you say well, maybe we'll find somebody to roll this out, but now let's focus on the development of the framework, which, according to my experience, doesn't really happen very easily without the ground funding in the background.

Speaker 4: 17:59

Sure, I mean, look, you know, there are examples of us approaching government and there are examples of governments approaching us and we provide that technical assistance to do some of that upfront kind of environment development.

Speaker 4: 18:12

And then we have in our arsenal of tools, kind of the ability to fund the programs afterwards. And I've alluded to the fact that we can do grants or reimbursable grants or indeed kind of you know, even concessional debt to fund those programs. And so now we're clear about the fact that those are there. Look, you know, cepa, given its size, is not mobilizing the quanta of financing that World Bank is mobilizing in some of its programs. But I think the reality is, if we can work with a government to define and structure an enabling environment that works, access to funding is, I don't think, that challenging. There are a lot of monies within the donor communities, the earmark for green mini grids, and the biggest single challenge is getting them out of the door. And so you know, if one partner kind of successfully puts in place an environment and a structure, other partners are very willing to come along and follow up on Ben's point.

Speaker 3: 19:11

From the bank's perspective, it's very much what you're describing, nico. It can be either us approaching the government or the government approaching us. It's a long term dialogue, so it's not just out of nowhere that we will have this conversation with the government, but that is sort of where we, as ESMAV, are able to offer an end to end solution. We are a fairly small team with a significant budget, but still considering the scale of work that we need to do, it's it's catalytic in terms of unlocking World Bank commitments and World Bank lending. How we work is that teams come to us saying that the governments that we're focusing on are talking about many of its and asking specifically for many good solutions as part of an energy access program, and then we go in and have a long conversation about what does that actually mean and where does the government stand?

Speaker 3: 19:57

And if there's no environment in the country at all but the government is still planning to have an actual project and actual lending commitment, then we get to work, working with them across all the different aspects that need to be addressed the 10 frontiers that I had mentioned to you before, whether that be regulation or access to finance, or institutional framework or training and skills development in the country.

Speaker 3: 20:21

We work with the task teams to talk to the governments about what does that actually mean for you? So it's very, very upstream, but we only do this upstream work if we know that there will be a program planned, a concrete commitment from the government, and that there will be a project that will be developed and that there will then be funds available through that project, because otherwise it just wouldn't be the best use of the limited funds that we have and the limited time and people that we have available to us. So that's generally how we've organized our process and we're very much stretched to the limit at the moment, I have to say, because most of our projects are scaling up and most of our client counterparts and governments are asking for mini-grid programs.

Speaker 2: 21:01

Yeah, which is an interesting development. Indeed, as you said, we are seeing increased interest in mini-grids. In general, this interest is coming from governments, but there are also a lot of international companies in the market that are just screening the market and going to those sites where World Bank or AFDB or any other funder is in negotiations with government to set up a larger funding program. And then the question is can local developers, which have not had the opportunity to gain as much experience as the few large international players in the sector, can they keep up? Can they actually accelerate their business as fast as the international companies can come into the market? What is your experience? There's a lot of discussion around. Should governments accept international players to come into the market? Should they rather foster local domestic companies to pick up the work? How are you handling this in your communications with government and Ben on your side, even with your own funds to fund the private sector?

Speaker 3: 22:16

So this is one of those sensitive topics, right that we have nuanced conversations around with the governments. There are certain countries where there's a very thriving local market that emerged sort of on its own bottom up, quite kind of under the radar, like in Nigeria for example, and that market is scaling and growing in response to the programs that have been set up, whether or not those programs were specifically directly targeting local private sector. And then there are countries where the governments have a strong preference for local companies to be significantly present. Ethiopia, once again, is an example of that. But it is our job to understand what makes the most economic sense, first of all, right for the country and for the programs that we're designing. From our perspective, we cannot allow for programs to be exclusive and completely exclude certain types of companies from coming in and qualifying. But if there is a certain preference for local content to be included, then we certainly work with the governments on what that might look like and what makes the most sense From my perspective, from what I'm seeing so far in the market.

Speaker 3: 23:17

I think partnerships between local and international companies are very, very important because they just leverage the strengths that each partner has to offer and it's a very rapidly evolving and changing market. So we will see all sorts of different configurations and models emerging companies absorbing other companies and local players absorbing other local players and becoming more and more present in the market. But it's not a one-size-fits-all conversation. It's not a simple dialogue to have, but it's a really important one, because each type of company has different strengths to offer. It is also our job a very important one to make sure we don't create inappropriate incentives and that we stifle the nascent local market. So it is a longer-term conversation that we have with the regulator, with the government, about what that actually means and what would make the most sense.

Speaker 4: 24:07

Yeah, thanks, nico. It is a very nuanced conversation. What I might add to that is the fact that the success of a mini-grid market, particularly if they're the first mini-grid programs in a country, are very dependent on the technical capabilities of the projects that are deployed. So we do need to be mindful of the fact that someone who has got a long experience as an EPC does not necessarily make a good mini-grid developer.

Speaker 4: 24:38

A mini-grid operator is an entirely different set of skills that of customer engagement, that of demand modeling, that of encouraging demand growth, that of deployment of productive use technologies, that of revenue collection. So these are all very important attributes which are intrinsic to the successful operation of a mini-grid and therefore I think Tati has pointed around making sure that we blend the best of that international experience, which has been earned in pretty hard circumstances in lots of cases, with that local content. I think is really important to make sure that those first mini-grid programs are successful. Because if you are asking because the counterfactual, of course, is, if you are asking a rural user to pay 20, 30, 40 cents a kilowatt hour compared to an urban user who might be paying kind of five or six cents a kilowatt hour, then the quality of that. Service needs to be very, very good and they cannot afford to have poor quality of service and then pay that kind of level. Just because these are rural users, it doesn't mean they're ignorant to the fact of what it is they're paying.

Speaker 2: 25:51

Now I have a question that is specifically for you, Dennis. Among the three guests of mine today, you are the one which probably deals most with innovative business models. What are the most promising business models for the mini-grid sector from your perspective?

Speaker 5: 26:09

Pricing- loads, which for me seems like the easiest one we solve for, and that's also scale. And after that we get points where it's very, very easy to even electrify the rest of the population because you've already achieved scale at sort of the lowest hanging fruit. We've always been trying to unlock the agri-processing question. How do you use agri-processing as your key anchor for doing power systems? Because with this you are achieving the dual goal of providing energy for whatever productive use you want, but also you're unlocking the incomes and livelihoods of communities, which is what you really want to do as a developer. So I think for me the model we are doing in Ethiopia is really, really promising. I do think Ethiopia really really has done well on the agricultural side by doing aggregated farming. I think now plugging in an energy system and an irrigation is sort of the next stage of unlocking the potential of these communities. So for me I'm really looking forward to what we get out of these pilot projects that we are setting up, because in a lot of countries we will find similar scenarios where there's a lot of farming but it's so subsistence and it's so seasonal, which could really do with some irrigation so that you have the production throughout the year.

Speaker 5: 27:28

So we went to Zambia recently just to do a mission of scoping and understanding the environment there, and I think I saw the same characteristics as Ethiopia, where there's so many farmers who are doing horticultural farming, which is really really very high income and high margin, but they're doing it using rainfed irrigation. They're only doing small pieces of land because, again, you don't want to take a risk. When it's rainfed, the inputs are not enough. When we went there, I think the cooperatives there are really trying to optimize on providing inputs, providing capacity building for the farmers and again, for me, looking at that scenario, what I saw was a replica of what you're seeing in Ethiopia, where if you were able to do a centralized irrigation system and provide water to all these people, then they actually have incomes to pay for your electricity and you'd risk a lot of your demand risk, as most minigrees are trying to do. So for me, that is one of the promising ones, which I'm really looking forward to seeing.

Speaker 5: 28:25

What are all the proof points that we generate from that that can be replicated? There are so many others that are on our radar, such as all this talk of trying to add social and public institutions and trying to think about models there. I think there's the more technical models where you'd risk by putting in technical laws or loads that consume energy when we don't have demand peak, which we are still evaluating. But I think we're going step by step and trying to see what proof points. What evidence do we generate is a sort of for us, the main path that we want to remain on and see what we share with the whole community of practice that we operate with for consideration.

Speaker 2: 29:11

Yeah, and this Dreams project is quite close to what other minigrid companies are also implementing, like Anka Mandules, our own subsidiaries, jimeme and Volterra, but also Husq Power, for example, and I think there is some room for more exchange of lessons learned.

Speaker 2: 29:28

Definitely, when I talk to minigrid companies, minigrid developers and minigrid operators, one of their main concerns regarding funding programs is the continuous availability of those Like. In many cases, you have funding programs which are limited by implementation time, but it also takes some time to develop minigrids and implement them and then to acquire additional funding financing equity debt to scale, and the investors and financiers would always ask for how much additional grant will you be able to acquire to implement the minigrids that we are financing and investing into, and will the grant funding program exist long enough for you to implement all your pipeline? And then most of the companies have to say well, I cannot say right, because World Bank programs are usually limited to five years. There is no guarantee that there will be a follow-up program, and that is one of the aspects that is at the moment retarding the fast-tracked rollout of minigrids in Nigeria, for example, but also in other countries. Do you have any reaction to that?

Speaker 3: 30:55

Yes, I do. That's another sensitive topic, certainly, Nico, that you touched on, but a very important one. We like to think of it as unfortunate, but also growing pains right, and it is a really important signal to the government that, look, you have a flourishing market, you have a program that is dispersed so fast that it is running out of funds, and it is our job to work with our donor partners and to work with the government to make sure that there is a bridge and that there is a way for these funds to continue to flow into the market. It is not always a perfect system, but it is very much a clear signal to that government and other governments that look, when there is a program that works, the companies come and they want to see you show up and commit as well.

Speaker 3: 31:44

There are many different things. There are many moving parts in the market, Many different markets. Things are shaking out differently. I certainly hear you on Nigeria and Nico. I think we've all heard a lot of frustration from companies on this and I really don't want to downplay that, but from our perspective, it's on us then to try and figure out a solution, not just as a World Bank, but also working with other partners and seeing where other partners can come in and help us fill that gap while the new program is being finalized and becomes effective.

Speaker 4: 32:12

Just to add that, yes, nigeria is obviously the example that you're referring to. I think it's the first time we've had a problem of this magnitude and it's a nice problem to have. In some senses, I think that's why it's an area where kind of country agnostic funds can start to play an interesting role. I think it's where we see organizations like UEF could potentially have a role in future, or even indeed the CEI fund, which has got different country windows Longer term. I think we'd like to see those start to plug those gaps, particularly if there are unfortunate kind of timing gaps between different grant programs in different countries.

Speaker 2: 32:55

Dennis, do you want to comment on the issue of the stop and go characteristic that funding programs limited by duration introduced to the sector?

Speaker 5: 33:05

Definitely creating momentum in a sector and then funding around comes to an end is obviously a bit detrimental to the sector, but also it's an opportunity, as Ben has stated, to create common instruments that we can consolidate funding into.

Speaker 5: 33:22

One of the key examples I could give here is the Universal Energy Facility, the UEF, which was built to become a consolidation of a lot of RBFs.

Speaker 5: 33:33

The reason here was so that we avoid this stop and go on RBFs.

Speaker 5: 33:38

Is it possible to either put all our fund into one instrument and that ensures continuity, or is it even possible to even align on the processes of the instrument and then have a way of all the funds being channeled in a similar manner?

Speaker 5: 33:53

So I think eventually what this will lead to is a situation where we have a lot of instrument which are cross funder, which will be funded at different times depending on the funder schedules, but they will ensure that the market signal that is created from the start is sort of carried through up to where the funding instruments are needed. So I think this consolidation effort and the discussions around that are really going to be very useful for the sector and if we get to a point where there are aggregated programs and people funding, organization funding into them. Then we'll have a very good market signal on the financing side, matched with very good signals, maybe on the government side in terms of regulation, matched with very good signals on the private sector side, and then we have a flywheel which is moving in a very balanced manner and leading us to the scale that we are looking at. That's where we would want the sector to go to and that's one of the key things that we are putting as our ambition as an alliance in the energy sector.

Speaker 2: 34:52

Alright, to come to a close, I would like to ask each of you to tell our audience a little bit about which programs and countries you're currently looking at and where you see great potential for mini-grid rollouts in the near future, and which countries mini-grid developers and operators should have an eye on.

Speaker 3: 35:19

So in the bank, really, we're looking at a whole different scale at this point. You would have probably noticed that, first of all, our projects are getting bigger and bigger. So the Nigerian electrification project is now becoming Nigeria dares. We have a massive program in DRC, the Agri project, the Ethiopia Adelaide program and Kenya COSAP, and those are just getting bigger and bigger. So those are obviously the biggest markets already that we're engaging in.

Speaker 3: 35:48

And then, with the new World Bank President has come a new level of urgency and prioritization of public-private partnerships and mobilizing private sector financing and bringing it into the sector, and so we're really scaling up our approach.

Speaker 3: 36:02

They're referring it to it as retail to wholesale. So we are also looking at larger regional programs, multi-year programmatic approaches or MPAs, that we are developing. You would have heard about the Ascent, which is a regional program in eastern and southern Africa, and you're likely going to see more of these larger regional programs that target access, not just mini-grids but access as a way for us to not only bring a whole new level of financing ourselves as the World Bank but to also unlock a very significant new level of financing from our donor partners and from the private sector and from the governments to bring into the market. So that's as much as I'm able to say at this point about regional programs, because many of them are under development at the moment, but that's very much where we headed as the bank. So, in terms of one specific market, I wouldn't necessarily say that there's one specific country or several specific countries we're prioritizing. It's really a very much a continent-wide shift in vision that we are undergoing at the moment.

Speaker 2: 37:02

Does that mean that you're not going to leave any country behind?

Speaker 3: 37:06

That's my hope, niko. That is what we're going to do is to deliver universal access to electricity by 2030. That's our mandate, and a big focus of our work is also on the fragile and conflict-affected countries as well. We have very large programs in very, very fragile countries, mainly even Niger and Chad and many others. So that is very much our mandate and our goal.

Speaker 4: 37:27

On our side we continue to work on the dream program in Ethiopia that was mentioned earlier in the call, and we have other country programs under development in Togo and in Guinea and we would like to try and mobilize funding for Mozambique and Madagascar in the longer term. But I think what I probably also want to point out is that structuring these country programs is a quite a challenge. It takes quite a lot of time. Tassia kind of alluded to that earlier on and I think if we are, as we all are, trying to accelerate the pace of deployment of capital into the market, on our side in Sefa we're increasingly thinking about ways in which we can put concessional capital into the market, and the other approach that we have for that is to then kind of fund on the debt or the equity side of the capital stack, which means, in an ideal world, funding funds which developers can tap into. And so in that sense I'm pleased to kind of refer to approval that we have earlier on this year to provide $10 million worth of concessional funding into the cross boundary energy access platform, which is of course, an equity provider for many good developers.

Speaker 4: 38:46

Colleagues will be familiar with the recent announcement of the series D Capital Race for Husk and there is undoubtedly kind of concessional capital that has gone into that raise from different financiers and we're looking at a similar model for other leading developers and hoping to announce one fairly soon.

Speaker 4: 39:09

And then I think we're continuing to look at opportunities for kind of deploying funding, innovative funding tools into the market. And I'm particularly enthused by this idea of off grid RECs or renewable energy certificates, which have had obviously some impact on renewable energy deployment in grid connected contexts, particularly in the global north. But actually bringing that kind of thinking to the global south and to development contexts, I think is something that a number of people are thinking about, and so we are actually kind of working on a project which would look at us kind of providing some funding into that as a means of mobilizing some funds there. So I'm quite excited about that sort of side of things because it means hopefully we can kind of start to get some money out into the market that little bit quicker. Those are just a flavor of some things that we're working on.

Speaker 5: 40:00

We are going very deep into three countries when it comes to mini grids that's Nigeria, the DRC and Ethiopia, and I think it's a bit opportunistic, given that these markets possess the largest unelectrified populations, and this is really where you can bring scale into the game if you are able to get solutions that actually work. But we also work across other markets, such as Sierra Leone, malawi, burundi, uganda and Benin, where there are bits of work around mini grids as well, but not as deep as the three initial countries that I mentioned. So we are happy to engage with developers, we are continuing to engage with governments in these countries. We are happy to engage with all the stakeholders want to come into these countries in one way or the other just to see where the synergies will lie and push this together as different strengths with the similar ambition.

Speaker 2: 40:51

Yeah, thanks a lot Ben. Thanks a lot, tatia. Thank you, dennis, that was very insightful indeed. Have a good night, have a good day, thanks so much Nico.

Speaker 4: 41:00

Thanks, nico, love you too.

Speaker 5: 41:01

Thank you very much, nico. Thanks for having me.

Speaker 6: 41:05

Hello, this is Sylvain Boursier, a senior mini-grid expert at Inansis. The mini-grid sector needs public contributions into mini-grid capex in the magnitudes of billions of US dollars. World Bank, african Development Bank and others are providing loans to African governments to allow for this money to flow. However, it's not the banks taking decisions on how to deploy the funds. It's the governments defining the modes of money flow. The banks provide the knowledge and run country-specific scenarios for the government to decide on. They also support framework development on requests of and under guidance by the governments. This includes the developments of laws and regulations in close collaboration with the respective line ministries. It comprises capacity building for those government institutions that shall handle the funds and, finally, procurement procedures are developed.

Speaker 6: 42:00

The mini-grid private sector, represented by organizations like Hamda, should play a stronger role in these early decision-making steps. They should work towards convincing governments of being open to private sector-centered approaches. This means that government should leave private sector enough room to implement profitable business models. The mini-grid private sector must continue to build trust with governments. This requires a lot of data about successes, which partly still needs to be generated, collected and compiled. Private sector must increase its effort in promoting itself as the solution to reliable and affordable electricity supply to rural villages and towns. Only once convinced of private sector approaches, governments will commit significant amounts of future African generation taxpayers' money as grants to the mini-grid private sector.

Speaker 6: 42:57

Today, as this process of generating track record to convince governments requires grant funding at scale, funds like GAP and CEPA enter the stage to overcome the Ed&Egg challenge. They provide catalytic donor finance to showcase successful business models, generate grant funding opportunities without forcing governments to get into debt. They help governments inform themselves about the opportunities the mini-grid sector brings along while carrying the opportunity costs on behalf of the governments. This is how the various funding instruments are complementing each other. Such a complex process with many stakeholders involved is typically slow. More coordination and clear communication about who expects what from whom would accelerate the trust-reaction process. We at INANSUS believe that the mini-grid sector is on an exponential curve when it comes to trust-building between governments and private sector. Many more countries will start taking loans for private sector mini-grid grants in the coming years under programs like World Bank Day and others.

Speaker 1: 44:07

This episode of the mini-grid business has been brought to you by INANSUS, your one-stop shop for sustainable mini-grids. For more information on how to make mini-grids work, visit our website, inansuscom, or contact us through the links in the show notes. The mini-grid business powered by INANSUS.