Evaluating minigrid policies for rural electrification: Scoring regulatory risks as a pre-condition to investment

Falling costs and increased quality of service have positioned minigrids as an increasingly attractive solution to addressing gaps in energy access. As a result, minigrids are more frequently included in national-level integrated electrification planning, and global private minigrid players absorbed USD $187 million at the corporate level in 2019 - a 76% increase over 2018. However, broader energy policies governing the main grid and/or public minigrids >1 MW are often insufficient regulators of smaller minigrid systems that typically serve rural communities with low energy demand. Although new minigrid markets have frequently emerged in unregulated environments, private sector developers increasingly see a well-rounded and credible minigrid regulatory framework as a pre-condition for development. Wood Mackenzie has developed a 30-point evaluation to score and rank minigrid policies, which we've applied to 15 relevant policies in markets in Africa, Latin America and Southeast Asia.