Decentralised Access to Electricity Through Mini-Grids in Tanzania

Abstract

Renewable, decentralised mini-grids are a promising technology for electrifying remote communities in sub-Saharan Africa. However, most mini-grids struggle not only to obtain a profit, but also to recover costs. This Policy Briefing describes the case of a private, for-profit mini-grid business model which also developed the productive commercial uses of electricity to achieve financial sustainability. The model failed due to high regulatory risks, initially high tariffs, and complex management of commercial activities. We argue that public–private partnerships and collaboration with local agrobusinesses could improve affordability, reduce risks, and ensure long-term sustainability.