PPP (Off-Grid Public-Private Partnership)

In 2018, the Italian Ministry for the Environment decided to support, with about 5.4 million euro, the Program by the International Finance Corporation (IFC) “Advisory services Off grid energy Public Private Partnership in Sub-saharan Africa” with the aim to encourage the participation of the private sector in the design and supply of off-grid and mini grid renewable energy in sub-Saharan Africa.

Over 600 million people, in sub-Saharan Africa, do not have access to electricity. The extension of the network required by the rural populations is very expensive and often out of the reach of public finance. In this scenario, off-grid energy solutions, offered by individuals, can play an important role in achieving universal access to energy.

Although, there is a significant interest and continuous innovation from the private sector in the off-grid and mini-grid sector (autonomous domestic solar systems -SHS, establishment of mini-networks, etc.), an approach which is based exclusively on the market meets several difficulties and limits its diffusion. The main obstacles include the difficulties and uncertainties at both the legislative and regulatory level, as well as the high costs of financing, in local currency.

Public-private partnerships, appropriately structured and incentivized, in which the public sector clearly establishes the market to be served and which provides adequate funding to cover project implementation and financing risks, can further attract private sector capitals and skills, accelerate the spread of off-grid electrification systems and promote economies of scale.

The Program “Off-grid Public-Private Partnership (PPP)” supports access to modern off-grid energy services in sub-Saharan Africa, starting with the promotion of public-private partnerships. Local governments will be supported in identifying and addressing market barriers that currently restrict private sector participation. Data will be collected and assistance will be provided for the promotion of market incentive policies and for the improvement of local regulatory systems. Thanks to the Program, local governments will also be supported in drafting the calls, in the selection of private operators, in the structuring of partnerships.