What are the pros and cons of each ownership model?

Short Answer

There are notable advantages and disadvantages to the various mini-grid ownership models. The best ownership model for a given mini-grid project will depend on the government’s policy and regulatory framework, community support for the project, available financing and the technical and managerial capacity of the owner(s). Before choosing an ownership model, project developers need to understand the pros and cons of each model and the operating environments where each model works best.

Further Explanation of Key Points

The The following tables summarize the pros and cons of community-based, private-sector, utility-based and hybrid ownership models.

Community-based Ownership Model

Private-sector Model

Utility-based Model

Hybrid Model

Putting it Into Practice

When choosing an ownership model, project developers need to consider the local context alongside each model’s advantages and disadvantages. Location-specific factors can impede or promote mini-grid development depending on the ownership model.

The following tables summarize conditions that favor each ownership model. The lists are not exhaustive, so the project developer will need to consider other factors specific to the project, its location and the local community.

Resources

Alliance for Rural Electrification (2011). Hybrid Mini-Grids for Rural Electrification: Lessons Learned.
This comprehensive report describes the lessons learned from projects implemented by members of the Alliance for Rural Electrification. The report addresses the key technical, financial, organizational and institutional issues relevant to developing sustainable, replicable mini-grid implementation models.

Global Village Energy Partnership International (2011). The History of Mini-Grid Development in Developing Countries.
This history provides an overview of the opportunities and challenges in mini-grid development in developing countries. The discussion includes many different mini-grid ownership models.

World Bank (2014). From the Bottom Up: How small power producers and mini-grids can deliver electrification and renewable energy in Africa.
This guide provides practical guidance on how small power producers (SPPs) and mini-grid operators can deliver electrification and renewable energy in rural areas, examines ground-level regulatory and policy questions that must be answered to achieve commercially sustainable investments, and discusses design and implementation of feed-in tariffs for SPPs in developing country contexts.

Last updated: February 13, 2018

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