Kenya shows that the global microgrid market is ready for significant private investment. While there still remain some challenges – especially around the regulatory framework and aggregation of projects – there are now enough businesses with viable business models to provide early stage, strategic or even crowd investors with commercially attractive opportunities. The medium-term growth potential for the microgrid market in Kenya, as well as in other energy access markets including in Africa, South and South-East Asia, is very high.
Insights from the report
For many of Kenya’s 48 million inhabitants, access to electricity is still a distant pipe dream. Only about 20% have access to grid power 7. This is a stunningly low number, especially when compared to the 88% of people registered as mobile phone users.
Investment costs can vary widely depending on a variety of factors such as the remoteness and accessibility of the site, availability of materials and labour, the cost and ease of securing land and permits and local perceptions of the services being offered. Costs will also vary according to the standard to which the infrastructure conforms; strict safety and compatibility standards to ensure later grid compatibility, for ex- ample, will be more expensive than the infrastructure set up by informal local grid operators.
Under the right conditions, there is a valid business case.