High-profile bankruptcies in the off-grid sector: Where do we go from here

The high-profile bankruptcies of two of the off-grid industry’s most well-known companies active in African (Mobisol and Solarkiosk) have grabbed headlines. This seems to have cast a shadow in the eyes of some investors over the prospects of the off-grid market and particularly the viability of current business models in rural electrification.

The Alliance for Rural Electrification (ARE), which brings together the leading market actors all along the decentralised renewable energy value chain, remains justifiably optimistic about the long-term prospects of off-grid market and the crucial role it plays in actually delivering on the global goal to achieve universal access to energy by 2030 (SDG 7). Without delving into the specifics of the two companies, ARE is convinced of the long-term health of the off-grid sector, provided some conditions as outlined in the article are met. 

With this article, ARE seeks to flesh out some of the core challenges and sector trends, and proposes a number of key recommendations on how to move forward and turbocharge the off-grid sector, so that SDG7 can move from being a global political goal to an actual reality on the ground.

In essence, ARE concludes that public investors should drive the development of innovative financing mixes, crowding in private capital, boost their internal procedures, as well as set up more mechanisms to de-risk investments in the off-grid sector.

 

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