Financing Mini-Grids in East Africa
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KNOWLEDGE PRODUCT SUMMARY
Title
Financing Mini-Grids in East Africa
Type
Case Studies
Organization
GVEP International
Region/Country
Global/Multiple
Website
no website
Contact
Peter J. George
E-mail
Year of publication
2013
Description
Mini-grids require debt financing to be financially viable.
› The “ABC” model – a PPA with an anchor customer – is at this point critical to bankability and still very much in its infancy in East Africa – few case studies available. › While local banks are beginning to recognize the bankability of well-executed projects (most of which include offtake of excess power to grid), and guarantee support from donors is encouraging them (e.g. TEDAP credit line through Tz commercial banks), we believe financing in the near/mid-term will be at “topco” not “project” level, and more similar to long-tenor corporate finance than loans based on the contractual and risk-mitigated principles of project finance.
› However, we believe that over time, more sources including larger, international banks and institutions will become available, providing lower cost debt at lower rates, once there is more certainty/understanding about revenue flows.Author / Producer
GVEP International
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- Financing for Micro and Mini Hydro
