Growth Gateway: investing in green sectors in Africa, mini-grids investment case (summary)
Published 26 June 2025
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Mini-grids are small-scale electricity distribution networks, typically disconnected from central distribution grid.
Mini-grids are emerging as a vital solution to sub-Saharan Africa鈥檚 energy access challenge, where over 600 million people remain without electricity. Unlike costly and slow national grid expansion or limited solar home systems, mini-grids offer scalable, reliable, and clean power for higher-density rural communities.
These systems typically combine solar generation, battery storage, and diesel backup, serving residential, commercial, industrial, and municipal users. The market, currently valued at 拢24 million, is projected to grow at a 25% CAGR to 拢72 million by 2027, with a full potential of 拢4 billion.
Key growth drivers include declining capital and energy costs, increasing productive use of electricity, and strong support from development organisations and national electrification plans.
Countries like Nigeria, DRC, and Kenya are highlighted for their large addressable markets and supportive regulatory environments. However, challenges persist, including demand risk from low-income users, inconsistent regulation, the need for market-building efforts, and limited access to commercial capital.
Success factors include securing concessional finance, aggregating projects for scale, automating operations, and boosting average revenue per user (ARPU) through anchor loads and productive energy uses.
For UK investors, the report outlines multiple pathways to enter the mini-grid sector, including direct investment in developers, project financing, and partnerships with public or community models.
The mini-grid value chain spans from hardware design and financing to installation and customer management. While the sector is attracting a broad range of investors, it still relies heavily on blended finance and results-based funding to achieve commercial viability.
Notable recent transactions, such as CrossBoundary鈥檚 拢48 million Nigerian portfolio and Husk鈥檚 拢80 million raise, underscore the sector鈥檚 momentum and growing investor confidence.