Welcome And Guest Introductions

SPEAKER_03 0:26

This is where we tell the stories. This is where we discuss the feature. The minigrid power by elements.

Nico 0:36

Hello, this is Nico. Today we will talk about power for refugee settlements. My guests are Douglas and Destalligan, operating minigrids in refugee settlements in Kenya and Ethiopia. And Amy advising UN and NGOs in how to best supply electricity in displacement settings. Dessalegon Voldemariam is the managing director of Humanitarian Energy PLC in Ethiopia. He has over 15 years of experience in the energy sector with a strong focus on delivering energy solutions in displacement settings. Amy Jenks is leading program and partnership for the GPA, the global platform for action on sustainable energy in displacement settings. She has 10 years of experience at both global and operational levels on this topic. Douglas Cox leads Renewia's work in East Africa and mostly

How Refugee Settlements Differ From Villages

Nico 1:30

focuses on large mini-grids in humanitarian settings. He is currently based in Kakuma Refugee Camp in Northwest Kenya. Amy, what is so different in power supply to refugee settlements from power supply to regular villages?

SPEAKER_01 1:47

So, Nico, I'll start off by maybe giving a controversial answer. So saying that it's maybe not that different. It's more different in the way that it's managed. So often refugee settlements are set up when there's a cross-border displacement due to war or persecution. And those communities are living in areas near borders and then are supported by the UN and INGOs. And so a lot of the essential service provision is supported by the international humanitarian sector. Sometimes they're also in areas that are a bit underdeveloped, maybe don't have roads, are far away from commercial and capital centers. So maybe distance can be one difference than kind of normal rural villages. And another is really the density. So often displacement settlements have quite a lot of people who come and settle in the same place over a longer period of time. So sometimes instead of compared to a rural village with maybe two or five hundred households, you might have a rural village with 2,000 to 10,000 households.

Nico 2:46

And some of our listeners may be surprised that after all, most of the refugee camps don't have electricity access. Why is that?

SPEAKER_01 2:53

Yeah, I would say often energy is not a priority specifically within the humanitarian sector. And so humanitarians are great at setting up emergency food supply or shelter supply or water supply.

Why Electricity Gets Left Out

SPEAKER_01 3:05

But electricity is not always a core competency. So that often gets left out of operational humanitarian planning.

Nico 3:12

All right. And that takes us to the core of our discussion today. I guess that is where the private sector comes in now, isn't it? Exactly that. All right. And here we can now hear from Douglas and Dissa Legan, who are supplying electricity to refugee camps. Who wants to start?

SPEAKER_02 3:30

Well, I think in addition to what Amy said, maybe what I'm about to say could apply to a couple different regions of the world. But I think East Africa in particular has a very unique situation where some countries have been, you know, relatively stable for decades now, whereas their immediate next-door neighbors have been incredibly unstable for decades. And that sort of dynamic combined with, I would say, overall a pretty remarkable level of hospitality on the part of hosting countries, has led to some very long-term and in some places very large refugee camps. And I'll kind of switch between refugee camps, displacement settings. We use a lot of different words in this overall community, but I think we're we're all talking about the same idea basically of people who have fled something, whether it's economic or more likely something more violent, and they're in a different place and probably overall wouldn't prefer to be there. And it's this really interesting situation because just like Amy said, yeah, this is not the expertise of humanitarian agencies. And everybody starts a refugee camp thinking that, okay, this is just temporary. Ideally, it's over as soon as possible. Weeks or months later, everybody gets to go home because the conflict is over. But because of that situation, particularly DRC, Somalia, and South Sudan and their just sort of unfortunately never-ending conflicts over the last few decades, we've had refugee hosting areas for those decades now. Kenya and Ethiopia and Uganda probably being some of the most interesting examples of that alongside Rwanda, I'll say too. So it just makes for a very interesting dynamic. And there are definitely some really cool ways that that works out as a mini-grid company in ways that make off-grid electrification, you could say, more, I guess, more interesting than in regular villages.

Nico 5:12

All right. More interesting

The Real Loads Inside Camps

Nico 5:15

because there is more density, as Amy said earlier. Because most likely there are a lot of people from different areas at the same spot, probably with some trade happening, because there's no processing there, right? At least it takes time until local economies develop. So basically you're supplying electricity for lighting and television, aren't you?

SPEAKER_02 5:41

I love that question because no, Nico, not at all. That is, I think, what everybody thinks of when you picture these long, endless rows of tents and people just kind of in their squalor or whatever. But actually, whenever you get hundreds of thousands of people together, like in Kenya's refugee camps, you know, in the Kakuma area and Dadab area, economies develop. People bring their skills, people even sometimes bring their machinery. And you'll find that large areas within both of the camps honestly look like well-developed parts of Nairobi in terms of the economic activity, not in terms of the overall infrastructure provision, unfortunately, but in terms of what's going on, what people are using machines to accomplish. Grain milling, small, metal workshops, small. This is all the stuff that we dream of in our villages. But then in the refugee camps, we just think, oh yeah, there's another one. There's 20 more where that came from. In Kakuma, for example, we're currently powering four huge boreholes. We're powering an equity bank branch, we're powering multiple SafariCom cell towers, just massive, massive users of electricity. Humanitarian compounds, too, which I know we're going to get to later, but just when they're located in the camp itself and they're just another one of our customers, obviously they love air conditioning just as much as I do. And so the loads can just become massive. And that's why, as much as I'll probably default to the word mini-grid as we talk about this, really metro grid is the more appropriate term for a lot of these settings because the loads are just massive.

Nico 7:05

Is it because people in regular villages come from these rural areas? Whereas people in refugee camps sometimes can also come from cities, have maybe a different education level, have had a different exposure in their life to commercial economic activities and these kinds of things. Is that the reason why the dynamics, the economic dynamics in refugee camps are so much different from those in rural villages in Africa?

SPEAKER_02 7:37

I think that's a really large part of it, but I do also think it's kind of just a natural consequence of when you get this many people together. Because I know, for example, that in Kakuma, most of the refugees are from South Sudan, and most of those are not from large cities. And even the sort of larger cities and towns near the border between Kenya and South Sudan are really not well developed, anyways. And so I think just to kind of spitball it, like very many Somali refugees bring that sort of energy, you could say, the sort of urban skills and all that, because you could very plausibly

Investing Despite Camp Closure Risk

SPEAKER_02 8:10

have fled from Mogadishu to Kakuma, for example, at some point in the last 35 years. But I think then it's also just a natural consequence. You get this many people together, people make economies.

Nico 8:20

So uh desalegans, you at some point decided now it's time to electrify a refugee camp. We already now learned that refugee camps may be an attractive electrification target, but sometimes they just disappear, right? You don't get a guarantee for a refugee camp to exist in 10 years, 15 years, 20 years from now. On what basis did you take your decision to invest into such an area?

SPEAKER_00 8:49

Thank you, Nico. That's a true risk that refugee uh settlements brings to private investors. But uh I mean uh the refugee campus has been there for long. On average, if you take Ethiopian refugee campus, their average of the campus is over 15 years. So, and given the East Africa political situation, they more likely be staying. So there have been efforts by the development partners providing solutions, but most of the solution has not been sustainable. So someone has to take risk, and fortunately, we have a shareholder who is also a humanitarian agency, MercyCore established humanitarian energy PLC to take necessary risk to invest in humanitarian settings. So, I mean, someone has to start that, and by the way, we are the only licensed private mini-grid developer in the country, and not alone in the humanitarian setting, but even in the country. So that tells you the level of risk initiative that Mercico has taken to establish humanitarian energy and given a mandate to operate in humanitarian settings. I mean, the risks are very obvious, but some of the risks are perceived risks. That's not really a real risks. I mean, refugee camps are there, people are saying that refugees do not pay, but they have clearly demonstrated in shadow, and their average uh monthly consumption are even bigger than some people in some bigger towns. So that shows that demand is there, people pay, and with some demand activation work and with few grants, a commercial mini-grid can be a viable option for humanitarian settings. So, and we took that risk and we continue taking that risk, given that uh we'll get support from uh partners around us.

Nico 10:50

Yeah, and this Allegheny Mercy Corps is the mother company of your company, Humanitarian Energy PLC. And this is an NGO. I guess it's a little bit easier to take the decision as an NGO compared to as a private, full-for-profit company. And I think that is now a question to Douglas. What drove you into electrifying refugee camps?

SPEAKER_02 11:16

Well, let me just first start by applauding MercyCorps. I think it is so cool what they've done in Ethiopia. It just really shows a flexibility that I think most NGOs don't feel the freedom to have. And I just really think the work that you guys are doing in Ethiopia is really amazing. So applause to you both. But as a private company, I mean, the funny answer to this is you know, now hindsight 2020, this was just always a really good idea. And I don't mean to understate that. When we first came, we didn't quite realize what we were getting ourselves into. So we've been operating in Kakuma since 2019. We've had a number of different expansion phases. And so right now, what's running is a 2.5 Bengal mini-grid. 12,500 connections are currently using its power. So call that 65,000 humans or so. And that obviously didn't happen overnight. We're not magicians. We had to start small. And it kind of worked out well as just showing up, seeing in 2019 that at the time there were 190,000 refugees here and realizing that this is the direction our company is going to take. This is the most impact we could possibly make on the world. And also just going to be the most commercially successful communities that we could possibly electrify in Kenya. Very unfortunately, it's impossible for almost any refugees to get a connection to the national utility, KPLC, because of a variety of reasons, but reasons that don't really stack up to making that much sense in the end. And it just is what it is, and it's always been that way, right? And so there's just this huge market that we can fill and uh you know just sell so many kilowatt hours for such a good cause. So I think I don't know, it's the story kind of writes itself when you see the scale and the story and everything. I'm so glad that we found our way here.

SPEAKER_01 12:56

If I could add on to that, Nico, just a statistic that came out last year was that 92% of all humanitarian funding asks in 2025 were protracted. So that means five years or more. At the GPA, we have estimated that around 40 million displaced people, most living in sub-Saharan Africa, are lacking electricity. And then if you take that, less than 92% of that being in protracted context, it really does give you a picture that the risk of closure, unfortunately due to kind of the trends and how conflicts are also not getting resolved so quickly these days, does mean they can be attractive business opportunities, obviously with the right type of subsidy where needed. I think it also brings in a question of what type of financing in these many grids or electrification projects. And I

Subsidies And The True Cost Of Power

SPEAKER_01 13:45

think one thing to note is that often refugee settlements are outside of the national development planning because they're not considered in the country's national electrification plan. Sometimes many grid developers don't know how to access that type of more concessional financing that might be needed. So it's something we at the GPA are working on to really outline the market size across three or four countries, all in East Africa, very systematically to see where are the more and less attractive market opportunities and how can we kind of work with private developers to come in and develop more types of mini-grids. We have two examples here. We want, you know, 100 in place. So it's what we're trying to do, you know, speed up that process of understanding the market size and market scoping and seeing where there are those business opportunities.

Nico 14:31

Yeah. Douglas, did you get any subsidies for your project?

SPEAKER_02 14:35

Yes, we did. And that was extremely helpful. And I think we'll continue to be at some level. And I guess let me start at the end here and say that we are currently fundraising for a major expansion to cover both more refugees and host community members here in Kakoma, and then also in Kenya's other major refugee hosting area, Dadab. And there are certain combinations of concessional loan and concessional equity that could work without any grant financing. And it's actually a realistic potential. But more likely, as with all electrification projects, government or not, grant funding or whatever we want to call it, free money is somehow necessary because we're developing infrastructure from end-to-end that is all the way from the solar panel to the in-home wiring. We have no decades of infrastructure to build off of. This is all fresh, and we are not getting yet, at least, the kind of interest rates that national utilities get, even though I sure think we should. So grants will continue to have their place. The number of funding partners that we've had here in Kakoma is too long to list. I guess the German government has been involved in almost all of them, so I should give them some special thanks. But it's been through a wide variety of programs. And if you want to know more, uh shoot me a text. But uh yeah, definitely it's necessary. I will say the very beginning, we came here because GIZ had a tender and we won it. And I mean, we had to have that, right? We had to have somebody holding our hands both financially and sort of practically showing us the ropes, um, introducing us both to you know humanitarian actors and to government officials in this area. So that is, I think, really, really important. And it's great to have a start like that. But hopefully we're graduating out of that as we go.

SPEAKER_00 16:14

Yeah. Um, I mean, it's good also to talk about the opportunities in the humanitarian space, which is not really available in other locations. As one of the things with the population size in humanitarian settings is help you build a system of megawatt size so that also help you with the economy of scale. And there are also partners supporting refugee settlements, livelihood support, so you can integrate your mini-grid with livelihood activities operating in the humanitarian space. So these are opportunities that any private developer can benefit from. We've talked about risks, but the opportunities are also huge, which private sectors can also benefit from the economy of scale.

Nico 16:59

All right, thank

UN Compounds As Anchor Clients

Nico 17:00

you. So, as in Nensus, we've been uh working for UNHCR through GIZ also at some point, and there it was all about how to hybridize the electricity supply to UN compounds that are set up next to the refugee camps to manage the camps. And I kept wondering, and I also was asking the question to the UNHCR staff like, if you supply your own compounds, why don't you also supply electricity to the refugees themselves? And the answer was well, these are two different budgets and two different work streams that cannot be mixed. Amy, can you clarify? Can you shed a little bit more light on what we're talking about here?

SPEAKER_01 17:52

Yeah, I mean, so in the first place, often humanitarian offices are not always geographically next to settlements. And so that's the first question. Is your big load your 200 to 500 kB generator, you know, sitting within five kilometers of a refugee settlement? But where they are, there are those opportunities where ideally the humanitarian office is really an ideal anchor client to anchor a mini-grid. That's where the question of where the money comes from comes in. So often the money for solarizing their facilities is in a completely separate budget. It's in the facilities and administration budget, which comes from different donors and different funding streams, versus the program budget, which is usually for support to refugees and to host community as well, sometimes. That silo of budget lines really does cause issues in capturing some of these opportunities. And it's something that we actually really need to break within the humanitarian system. It's really to look at the whole electricity need in an area and see kind of what is the optimal use of resources there and what is the role of the humanitarian agency. Can they enter into a utility type agreement with a mini-grid provider? And if so, can that anchor be an anchor for a wider electrification of the community? So unfortunately, the devil is in the detail of the budget lines here. And I'll have to also say the humanitarian sector has gone through a massive cut in staffing. So everyone is really going down to their core mandates. Unfortunately, energy is sometimes seen as a luxury in these areas when, you know, food and shelter and water are really the primary needs. And so instead of having those internal staffing, those internal electrical engineers or business type people who could think through these models with the private sector, unfortunately, that type of stuffing has been let go in recent years due to the very large-scale 30 to 40% funding cuts of these agencies. So it's been a bit of a survival game. And really, without that internal expertise, at least to make a bridge between the community and the private mini-grid developer to think through these type of models, it's quite hard to get them in place.

SPEAKER_02 19:58

I think also from first principles, there's kind of a good reason for some of this that you definitely do want excellence and service delivery from humanitarians. I mean, there are so few of them providing so many critical services to so many beneficiaries. And I want them doing that with fast internet and cold air conditioning and cold beers. But you know, if you sort of could take the solar equipment pricing of now with the better humanitarian funding of the past, maybe it would have made sense for them to build significantly larger power systems than they just need for themselves and then somehow sell to their beneficiaries, which is, I think, another interesting little legalese detail in a way that like they're generally not allowed to sell things to refugees, right? But if we could get past that somehow through some sort of contracting, whatever, it's just tough now, right? They are working on so little. And I mean, the cuts of last year have been so deep and so difficult that it I think it kind of makes sense that it's different funding streams. I will say, though, what doesn't make sense, and it's tough to get past this, but what doesn't make sense is humanitarian agencies building or obviously contracting out to build every building getting its own individual solar system that then doesn't have necessarily the high-quality checks on construction or on operations and maintenance. And I mean, I swear I feel like every week I see a new dead battery bank somewhere here in Kakuma. And whenever I get time, I try to revive these things, but it's a graveyard, it's a solar graveyard up here. And that's how you end up with so many projects just falling back on diesel generators. And it's really sad because especially in a time when funding is so cut, to see so much of the budget going to diesel of all things, and nobody even wants this, it's just a tragedy. And I hate it. And unfortunately, We couldn't really play too much of a role with that until recently, just because, you know, for example, our first system was 60 kilowatts. The battery inverters had an output capacity of 54 kilowatts. And the Kenya Red Cross hospital down the road could easily overwhelm our system and shut off power for everybody. And so they would just have to fall back on their generators all the time back in the day because we weren't a reliable power provider for them. And that was just that, right? Now that we're 2.5 megawatts, and I'm saying yes to everybody, and maybe saying yes to too many, but it's it's bountiful. And everybody's a drop in the bucket. Even you bring a 72-kilowatt pump and I just say, sure, why not hook it up? And I think that is the future, and certainly our future. I think though anyone who's working in this world and can grow as big as possible as quickly as possible has an enormous service to play, not to be too cheesy about it, but kind of to the world as stakeholders in this, as all of us are taxpayers to governments that fund the UN system, and then those dollars going into diesel instead of into food for people. I think we can play a big role in solving those problems. So I'll get off my soapbox now. Sorry about that, but that's how I feel.

SPEAKER_01 23:09

Could I add one nuance there as well? Humanitarian agencies are really set up to deliver emergency services to people in that are really coming and settling for the first time. So that is a procurement system that's made for buying a lot of things in bulk in a very short amount of time. A very procure and distribute focused system. Whereas what we're talking about is changing the whole contracting model to a service-based model. And they do have examples in other sectors, like in the fleet sector, they buy vehicles on a service leasing contract. So we do have examples where the procurement rules of the UN allow this, but because the agency's incentives are set up to procure and deliver things, instead of buying things as a service, it makes that whole uh negotiation of a tariff, for instance, between a UN office and a mini-grid provider really outside of the box and outside of the status quo of what the humanitarian agencies are used to doing.

Nico 24:09

I would like to quickly go back to the subject of compounds versus the actual camps. Now, first of all, Amy, you said compounds may not always be next to the camps, but in some cases they are, right? And then there are you have these different funding streams. But what I found in my work for the UN on these compounds is that these compounds can have significant electricity demand, right? This can be easily several hundreds of kilowatts because people they don't just work there, they also live there. They need air conditioning, they need IT, they need everything that you have in a regular office plus house on a relatively high standard of living. So after all, all of that is produced most of the time by diesel generators. And the diesel generators are not operated by the UN organizations themselves, but they procure the assets plus operation and maintenance services from third-party providers. Now the question is: these third-party providers, could they not be incentivized, if they are anywhere nearby, to also supply electricity to the camps? Because they are there already and they could learn from our two examples here today, from Renewia and from humanitarian energy. So why is it not working yet, Amy? Can you shed some light on this?

SPEAKER_01 25:45

Yeah, definitely. And you're completely right. The details there around the contracting type. So everyone is very used to just buying a diesel generator because it's easy, it's reliable, usually there's a local mechanic who can maybe fix it. And whereas people maybe perceive solar as something more complicated. Again, going back to the status quo, people usually do APC models, buy, install equipment,

Diesel Lock In And Service Contracts

SPEAKER_01 26:10

and leave, and then people feel a bit burnt by solar not working. And so there's this perception of diesel being more reliable. I think the real transition will come in, and what we the sector really needs to move towards are signing electricity as a service agreements with companies. The bottleneck there has been from a company and an investor perspective, if you would sign a kind of PPA or leasing agreement as a company with the UN, you would probably want a five to ten year contracting timeline, right? To guarantee that your payments are going to come in. But on the UN side, their budgets are usually one to two years. We ran a workshop series around this a few years ago. And that was the big catch-22. The UN said, yeah, we would love to do that, but sorry, we have our money in the bank for one to two years, so we can't. And really, this is where, for instance, financial guarantees could come into play to enable those sort of contracts. But I think there's been a misunderstanding or a lack of bridging between companies and their investors and with the UN realities of what money they have in the bank at the same time. And if that sort of financial guarantee or maybe switching to kind of one-year renewable contracts in places where it's very likely that these compounds will stay for a long time, could then de-risk the investment on the private sector side and allow those compounds to actually be anchor clients. And then the mini-grid developer could then extend electricity to the local community on a business basis. So I think that's a key issue and disconnect between companies and investors in the UN that really needs to be solved.

Nico 27:44

Is the UN maybe procuring from the wrong suppliers? Should they maybe talk to the mini-grid companies? Definitely. And say, hey, well, definitely if you deliver us electricity, you're free to also deliver electricity to the camp itself.

SPEAKER_01 28:00

Definitely. I think it then goes back to those one-year short-term budgets people are thinking about next week, not next year. And that's really the key thing.

Nico 28:08

Yeah, but I but Douglas and Dissalegan said, well, this is not too much of an issue, right? We have more than enough demand from the camp itself. If we then start with a compound and make money from the first day, I think everyone would be happy. Don't you think so?

SPEAKER_01 28:24

Absolutely.

SPEAKER_00 28:28

The thing is, the humanitarian compounds as well as operation, their demand is high. In some cases, 60, 70% of the load of the camps goes to humanitarian agency. So that is too much risk to take for a private developer if the PPA power purchase agreement is not in place. So, I mean, with householders, businesses, I mean, as I said, we can take risks. But a developer to make that system, and at some point, if an HCR or WFP fails to continue their operation, and even if they reduce their consumption by half, then that's a big, big, big uh risk for private developers. Plus to that, when you raise financing, I mean you do you need to have that PPA in place. Uh so that gives confidence for lenders to give you that money. And the demand is there. Yes, they can demonstrate that. Uh you, I mean, you you can build uh the load profile, whatever, whatever document is, but if an agreement is not in place, it makes financing very tough. So financiers will not be interested if PPA is not in place. The thing is, their their consumption is too big to take risk for a developer. I mean, that's the reality from our side.

SPEAKER_01 29:48

And Dessaline, I think you can speak to this more, but there's an added layer of complexity that if you're only serving a UN compound, you're basically an IPP with a contract with the UN, where then if you extend electricity to local community, then you're under national regulation. And maybe that's different. So there's some extra layers of complexity there, which I think again Dessaline can speak much more to from the Ethiopian context.

SPEAKER_00 30:12

If you are, I mean, serving, that's why we have, I mean, as humanitarian energy, we have two complementary business models. One is a mini-grid, this is our ordinary mini-grid model where you serve, I mean through utility model. But we have also tailored business model that target humanitarian agencies and their operation. That is an asset lease model. Most UN operations they don't have money to pre-finance, so we'll be the one uh pre-financing, operating so that they're not required to get into operation, whatever. So we take all the necessary risks. But as Amy was saying, I mean, you need to have like five, six, seven years of contracts, of the asset lease contract or agreements in place. But that's not usually coming with the maximum UN agencies can sign is two years. If with two years, if you pre-finance, then the cost is going to be too high even for them to cover. So, I mean, these are um vicious circles actually to resolve. But we have that model and we are very much happy to serve them because it makes your model really financially viable because of the big load. But the complexity around that is not something that private sectors would like to take risks with.

Nico 31:33

Yeah, but this Allegheny, when I asked you a few minutes ago about why you invested into a refugee camp electrification, even though you don't know if the refugee camp will exist some five to ten years from now, you said, oh, they will exist, right? I'm pretty sure about that. Couldn't you just also say that as long as the refugee camp exists, there will most likely also be some UN support, right? It would just be an extension of your initial argument. Very true.

SPEAKER_00 32:10

Yeah, yeah, that's very true. But the thing is, I mean, at the end of the day, humanitarian energy PLC is a private company, and we have to run as a commercial entity. So we have that big social mandate, that's true, and we will take adequate risks, but at the same time, I mean, it has to be very calculative risk. And we have to also look at the energy access and from the social impact side. So if you serve like 10,000 refugees, consumption more or less is the same as serving one small UN compound. So getting finances through the social impact is much higher. Probabilities much higher to get finance. I mean, you cannot raise funding to solarize a UN compound. I mean, it's tough. But for uh refugees, you can really uh find resources to subsidize the tariff. But it's difficult to get financing, especially grant or philanthropy, to solarize UN compounds. And it has to be clear for all of us that humanitarian energy has to operate as a commercial enterprise. And at some point, despite all the support that we are getting from MercyCore, we have to operate as an independent uh enterprise. So we

PPAs Guarantees And Investor Requirements

SPEAKER_00 33:30

have to look at all the return on investment because we we attract investors and we also have to pay debt back. So all these things has to be in place and financial viability and the risks has to be minimized as much as possible.

Nico 33:44

Douglas, can you confirm that? Is it easier to acquire finance for refugee electrification than finance for office electrification?

SPEAKER_02 33:53

Literally, yes, based on our experience. I was gonna throw in two thoughts. One that people used to really push us on whether or not the refugee camps would still exist in X number of years. And I don't really have that conversation so much anymore, thankfully. It's kind of silly that that's more about our operational history and you know being in this community for seven years than it is about the community's operational history, you know, Kakuma having been founded in 1992 and Dadab in 1991. So I'm not saying it's right, but it that has seemed to track with what funders are the conversations they're having with me.

Nico 34:26

Aaron Powell So what is the entry point now for a mini-grid company which wants to enter the space? Is it a tender usually for a certain camp, or can it be unsolicited proposals of companies which are interested in electrifying a camp?

SPEAKER_02 34:42

Aaron Powell A lot of new entry does go through tenders just because, you know, like for us, GIZ putting a tender out, they had presence here, they knew it well. That was a good way to convince a random private company to get in like us, right? But for example, our entry into Dadab, we've gone in fully just self-driven on that and raising our own funds for that and everything. And then I think this gets a lot more into the very nitty-gritty specifics of different countries' regulations and all that. But um it's very possible in I would say probably anywhere to if you can raise the funds, if you can make the case that you can do this in any refugee camp that's not who you know whose political sensitivity isn't so high that you know it's it's a no-go zone for funding or for approvals, right? Which off the top of my head, I can't really think of any place like that. So yeah, it's very much, I think, open doors all around, just a bit of a steep hill to climb.

Nico 35:36

And at what point in time would mini-grid companies come in as an electrification option? It's probably not right after the emergency has happened and when all the refugees come to a certain place. It's probably years later, right? And that is, I guess, also your experience, Douglas and Deserlegan. You entered the space almost a decade or decades after the camp was established, and then you already found a ready market for your electricity. Is that the right approach? Should we let the refugees wait for a decade until they get access to electricity?

SPEAKER_02 36:14

I mean, personally, I do not think at all that's a sort of globally morally correct approach at all. But at the same time, I do understand, for example, we were approached with some interest in bringing our model to some refugee camps in Chad for folks fleeing the Sudanese Civil War. And unfortunately, you do just have to look at that and kind of wonder like, is are those going to be there for that long? And I really hope they're not. You know, I am so rooting for peace in Sudan, right? And at the same time, I'm so rooting for the well-being of those who have fled the war in Sudan. So what do I do with that? I think the funders make the call on this one. I don't think anybody would fund that. I think that would have to be essentially 100% grant funded. If anyone disagrees, email me afterwards. I want to be wrong on this one, but I think I am right. I think for Renewia and humanitarian energy, again, unfortunately, I have to put all these caveats on here because I really do care so much. And these are really just so many tragedies built into these good economics, right? But I think a lot of these camps have been around for so long that we're spoiled for choice for now. You look at also other countries in the region, and we're still spoiled for choice. I mean, there's millions of people without electricity in these very large, dense settlements. And so I don't think we need to make that call yet. I think maybe in a few years after we've built gigawatts of metro grids in every country in the region, maybe then it'll make sense to be facing that dilemma. But for now, I think it's kind of clear.

SPEAKER_00 37:42

Yeah, in in our case, what we do is, I mean, Shader is a pilot and we have demonstrated, proven the concept. And then following that, we have an expansion plan. And that has a detailed engineering study for additional four camps. And one camp, our construction has already been started. The other three camps are already under fundraising. So we have an expansion plan and we do

How Companies Enter This Market

SPEAKER_00 38:10

also quick mapping to see the demand, especially we look at their willingness and ability to pay. That's a key for us for any expansion. And then because the camps has been long and there are campus with 30, 35 years old. So I mean it's logical to solarize those campuses because the demand is so big. And it's logical to prioritize those camps with already settled and those uh with new camps because everything is established, the load profile is already clear. Targeting those camps for me is very logical.

SPEAKER_01 38:43

Yeah, it also really depends on the situation. So, for instance, in Jordan, after the Syrian crisis, there were multiple refugee camps set up, and people in Syria were used to high electricity usage every day. So in the settlements there, they had really large-scale grid type systems. So we can really think about this in many ways. Those grid type systems are now an asset to the Jordanian grit, and that's great. I think it's to use these opportunities as a general electrification opportunity. And I think there's different ways to think about it as well. Could you look at different lower capital intensive business models, such as battery swapping, to test that out in marketplace first, and then see if you can expand? So it's probably not always to go in with the technology solution, but really to see, as Desaline said, what is the willingness and ability to pay? And then what kind of business model could be worked out around that? Could it be battery swapping? Could it be energy as a service for a kind of tier one type system? Could it be a combination of multiple, looking at the whole area, including and especially including doubles community demand, in conversation with the national government and the utility to really see where those opportunities are best fit? So I think lots of options out there.

Nico 40:02

Yeah, Disselang and Douglas, do you see different technological requirements for electrification of refugee camps compared to regular villages, regular mini-grids? Is there anything different in the technological approach you take?

SPEAKER_02 40:21

I think that because of the density and the size, it's actually the best sort of case for very large-scale equipment. And giving, you know, I'm gonna forget my tiers here, but you know, tier, tier 10, tier 20, tier whatever the biggest number tier is electricity service. Five. You know, I kind of thought that, but we don't really mess around with one through four, so I don't know. Tier, yeah, tier, tier five service, because, anyways, that's just a good thing. But yeah, the density and the economic activity just really support it to begin with. I bet it's completely different in other places. And I think everyone probably in this call knows Uganda's refugee situation better than I do, but my understanding is that it's a lot more spread out, which is partially a very good thing, better farming land and all that. I bet a lot of the sort of standard trade-offs apply there, where certainly it is way more sensible to provide a solar home system for somebody way up on the hillside than to do a 11 kV extension up the hill and then a step down for them, and then you've just spent $30,000 on one person's house, right? So I think your mileage may vary, you know, but common sense prevails.

Nico 41:28

All right. Now we've looked into what is the best time to enter the scene, what technology to apply. Now the question is, what does it take on the regulatory administrative side to set up such a system and such an environment?

SPEAKER_00 41:46

Yeah, regulatory-wise, I mean, whatever applies for the national applies for the refugees. No unique intervention. But we're discussing about uh targeting UN or INEGOs in the refugee camp. That's where the difference comes. Because if you are serving communities, whether refugees or host communities, you will get this tax and duty exemption in the case of Ethiopia. But if you are building a system for one organization, then you will be required to pay for the tax and duty, which will, in some cases, double or triple the cost of building the system. So that's why we're trying to serve UNHCR or any just operating in the camp as one of our customers. The idea and the logic behind this tax and duty exemption is for energy access. So serving UNHCR or one compound is not considered as expanding energy access because you have to have some people benefiting and the number of people, all things will be seen. So to benefit from that, we're building a system, and then UNHCR or other partners can benefit from the system that we build for the refugees or host communities. But a separate standalone system is really much higher expensive because of the tax and duty uh associated with building a standalone system for those clients.

Nico 43:20

What about land acquisition? What about licensing? What about building permits? Is that different from other mini-grid setups?

SPEAKER_00 43:32

Not different, especially land-wise. The good thing is we get it lease-free, so free lease. That's what is the experience we're having. So we're not paying for the land. That's an opportunity. But that is also applicable in other locations outside, I mean, all over the country. So land is not an issue. Permit is pretty the same standard and procedure you follow. So you're not getting any benefit by. Operating in humanitarian space regulatory-wise, and you don't also miss any uh opportunity because of operating in that area. I mean,

Tech Choices Regulation And Land

SPEAKER_00 44:10

regulation-wise, licensing-wise, construction permits everything and importation, everything, and everything is pretty similar.

Nico 44:18

And the land is still in the hands of the government, or is it under control of any refugee-related organization?

SPEAKER_00 44:27

I don't know what uh the other country's case, but in the case of Ethiopia, the land belongs to the local administration. So you get that land and you have to have that lease agreement with the local authority. Whether it is a refugee camp or even outside of the refugee camp, the land belongs to the local administration. And you have to have that agreement. That's where serving the host community comes. If your system is dedicated to serve only the refugee community, the host community or the local administration is the one giving you the land. So you have to give them back something. So that's when you have to incorporate host communities in your system design. All right, Douglas, is that the same in Kenya?

SPEAKER_02 45:13

Yeah, more or less. I mean, I think Nico, you probably wrote half the minigrid regulations around these parts, right? So, you know, a lot of countries have fleshed out the process for a normal remote community quite well, but they don't really deal with edge cases very often. And this is a huge edge case in terms of, you know, in certain camps, distances to national grids and things like that. But on the other hand, they're generally located in kind of less desirable areas and places that weren't already being used for something else, right? And so those two effects kind of combine to net out to make it the same, a short answer to your question, that it really is more or less the exact same process that we follow in any other village in Kenya that we follow for this much larger community. The only thing on top is just more out of courtesy than out of requirement, or kind of somewhere in between, just getting the consent of the Department of Refugee Services in Kenya, um, UNHGR, of course, these very important local partners who you do want them to know that you're around and what you're doing, and obviously all of that. But otherwise, from you know, the energy and petroleum regulatory authorities perspective, this is all just another mini-grid. The host community down the street from our plant, we serve with a different mini-grid. And I'm very thankful for that. They're too far to make it make sense to serve from the same plant. So it's all a long story, but a good story, right? But it is interesting that even though they're about 15 kilometers down the road and you know have some economic co-interest, but I mean 15 kilometers is a pretty fair distance, we need their approval and we need their local government's approval for things we're doing, you know, just as much as we do for the mini-grid in their own community. So yeah, it's a lot of stakeholders and a lot of approvals to get. But I still would say overall, it's not fundamentally different. And you can find dynamics like that in lots of villages, anyways.

SPEAKER_01 47:03

Maybe I would add in in the case of solarizing offices of UN compounds, often in other countries land is provided or leased to the UN. And so if you have a large office and it's a solarization of their load, then often you can use their rooftop space or some land nearby. And then it's just a direct discussion with the UN agency. And that's kind of where we at the GPA come in, is to bring companies to kind of sit down at the table with humanitarian agencies and try to understand each other better and develop ideas together. Often, again, because of public procurement rules, if the UN goes up to one specific company, then they would be disqualified from the tender that they might put up. So it's really creating brokerage space between the UN to understand the mini-grid companies or the renewable energy companies and the renewable energy companies to understand the UN and have those conversations to see what is needed where.

Nico 47:59

All right. Let's go into a round of final statements. What would you recommend to a mini-grid company considering an engagement in a refugee settlement? Who wants to start?

SPEAKER_02 48:14

I can fly by the seat of my pants here. I would certainly say do it. People need electricity. And like I keep saying, there are really some fundamentals that make it a much more attractive market to serve than many of the places that we in the industry already love serving and already are, you know, pouring ourselves out to serve. So I think definitely do it. Bring all your compassion and all your mental health and all your therapy and just everything because it is not easy. And what you see is not easy. The people you are around have often seen things that you would never believe and experience things, been victims of things, perpetrated things. I mean, you are in a different world in some ways. And you need to bring sort of your best self and be really truly dedicated to the service of people who need it and deserve it. So do it. Move fast. Don't sit on it, raise the money and build and join what we're trying to do here. That's what I would say.

SPEAKER_00 49:12

Yeah, from my side, the market is really too big to cover by one company in the case of Ethiopia. So we need to have more companies coming to the market. And the market is really big, and there are also opportunities working with humanitarian agencies, INDOs, organizations working on the livelihood support also support the productive use of energy. So the opportunities are big. Come and join us, is my call for private sectors and financiers. Maybe it's good also to give my last word on the financial, the risk and the operating environment is quite different from other operation areas. And I mean, we're taking risk, and I also encourage them also to take some calculated risk. So we're taking risk, let them also take a risk and do something that is measurable and impactable. Because what is encouraging for us is we've seen people's life changed

Final Advice For Developers And Funders

SPEAKER_00 50:20

in shader. So that's clearly visible. So that's the energy that we are having to build and expand our operation to other areas. So come and visit our areas, and then you will see the impact, and for sure, everyone's mind will be changed after seeing the impact that we have demonstrated in shader.

Nico 50:40

Yeah, and according to what we discussed today, risk may even be lower than in regular mini-grids, right? As the economic development is that strong in refugee camps.

SPEAKER_00 50:51

Yes, exactly. Come and see the risks we're facing. So especially, I mean, you cannot treat this as a regular mini-grid project. The risks are much higher, but the opportunities are there, and then they have to be ready to take a risk. And whether it is a financer or even private developer, have to calculate and see those things. But impact-wise, you can demonstrate that impact very quickly.

SPEAKER_01 51:17

To add on there, I would say maybe size the market opportunity and maybe don't start with the hardest, hardest, hardest placed first. That's one tip. Another is to really develop genuine partnerships with the UN, with INGOs, really understand each other and see how each other work, and then you can find solutions together. Really invest in partnerships, really less in a transactional way, but more in a let's build something together way. And so that's another one. I think also start with a few different areas and try to blend finance in a few areas and see how to then build from there. So get that operational experience in these settlements, and then I think doors will open and others. And I guess there's also a call to financiers and people who build guarantees. There's very specific risks in these areas that can be de-risked if the right guarantees are put in place. And I think that is where we will see a sea change in the economies of scale that we can from many grid developers when and if we can work with financers to get the right guarantees in place for these types of locations. Because as we've talked about, they're kind of a no-brainer in terms of the density. But when the financiers are pricing in XYZ TEP risks, then it makes the cost of capital very high. Um, and so it's, I think, about finding those financial instruments that will allow many grid developers and private companies to come in and do the great work they know how to do.

Nico 52:47

All right. Thanks a lot, Tessalin, Amy, Douglas. It was a pleasure. And uh thanks a lot once again. Thank you.

SPEAKER_03 52:58

Thank you. Thank you. This episode of the Mini Grid Business has been brought to you by Elements. Your monster for sustainable many grid for more information.