21^st April, 2017- Mini-grids in Rwanda are developed by the private sector with government playing a key role in identifying sites and establishing a framework through which they become financially viable investments. Mini-grids are small distribution systems isolated from the national power system which includes a source of power generation. This generation is usually provided by hydro or solar, often in conjunction with either battery storage or diesel generation to handle the intermittency of power output presented by renewables.

In the recently approved Rural Electrification Strategy in April 2016, four Programmes were identified that would help the Government of Rwanda (GoR) meet universal access by 2020. Programme 3 is the provision of access through sustainable Mini Grids, and given the large investment costs, there are a number of pre-conditions that need to be met to make them viable and these include:

1.  Distance from the grid: Where a connection is available to the national electricity network a mini-grid is unlikely to be financially viable, since the costs of power generation in a mini-grid are usually much higher. In deciding where to locate a mini-grid it must be determined whether this is the least-cost option for providing power to households and businesses. This will, in a large part, be determined by the proximity of the grid.

2.  Demand: Given the large fixed costs of a mini-grid in both the network and the generation technology, there needs to be a demand that is both high, and spread across the day for it to be viable. Most households consume power during the evening but for a mini-grid based on solar or hydro to be viable it is likely that there would need to be a large demand during the day too.

Given the constraints above, the relatively small size of the country and the planned extent of electricity access, it is suspected that mini-grids are likely to be financially viable in a limited number of cases an assessment of 20 potential mini grids locations is being carried out by Rwanda Energy Group (REG), while the Ministry of Infrastructure (MININFRA) is working with World Bank to design a Financing Mechanism of Mini Grids that would help make them sustainable and affordable to Rwandans.