A new study ‘Lessons learned from 12 years of mini-grid results-based financing in Africa’, conducted by The Future of Energy, offers lessons and future recommendations for incentivising mini-grid projects through results-based financing mechanisms to scale up energy access in Africa.
Despite collective commitments of over EUR 250 million to mini-grid project development in Africa and ambitious goals to catalyse private investment, current results-based financing approaches are failing to deliver results at scale and speed up implementation to achieve universal energy access by 2030.
Mini-grids are seen as one of the most cost-effective and scalable energy solutions to provide electricity for some 380 million people in Sub-Saharan Africa by 2030. Yet, as of early 2025, only 14% of the $9.1 billion in financing committed to mini-grid electrification across Africa had been disbursed due to various market challenges. Unelectrified communities should not be left alone for another decade while market actors continue learning by doing. They require the energy access actors to rapidly apply existing knowledge while continuing to innovate and adapt.
To help attract the necessary investment, results-based financing (RBF) programmes offer subsidies tied to specific project milestones and, when properly developed and strategically deployed, can play a crucial role in this urgent mission. Since 2013, at least 13 programmes supporting the acceleration of mini-grid instalments have launched across Africa, including the Beyond the Grid Fund for Africa programme (BGFA), and the effectiveness of these programmes have been examined as part of this new study.
“Strengthening results-based financing for mini-grid projects is essential to build investor confidence and scale up productive electricity use. But success goes beyond subsidies – it requires clear regulations, fast verification, timely payments, and reliable incentives to attract private capital and expand sustainable energy access in underserved Sub-Saharan African markets,” comments Aleksandra Reskalenko, Programme Manager at Nefco.
Findings from the study
Despite RBF programmes being widely recognised as a powerful tool to unlock private investment, their real-world implementation has been characterised by delays, misalignment and under-disbursement, resulting from challenging market conditions, operational issues among developers and programme inefficiencies.
Despite the above-mentioned challenges, since 2013 the 13 examined RBF programmes have played a catalytic role in developing the mini-grid sector. With appropriate refinements and the integration of complementary support mechanisms, they can become effective tools for increasing momentum towards the $91 billion needed to provide electricity to some 380 million people in Sub-Saharan Africa through mini-grid deployments.
“Results-based financing remains a powerful tool for mini-grid development but only if designed for local realities. Streamlined disbursement, digital verification and integration with other support mechanisms can turn RBF programmes from slow-moving grant mechanisms into strategic accelerators,” says André Troost, Director of Consulting at the Future of Energy.
The study identifies several key factors for the successful implementation of mini-grid projects through results-based financing. Two important findings are:
- RBF programmes cannot operate in isolation – results-based financing works best when paired with guarantees, technical assistance and pre-financing tools to accelerate capital mobilisation and ensure sustainability.
- Connection-based metrics do not necessarily incentivise sustainable service delivery – rewarding connection numbers alone can undermine long-term viability. Incentives should focus on energy use and financial sustainability.
In addition, the study points out, among other things, that incentivising commercial energy use improves profitability and sustainability, early funding supports local developers to scale, the local presence of RBF programmes is important and the scale of the mini-grid developers matters.
“In order to support long term viability of mini-grids, focusing on consumption is vital. However, subsidy schemes based on capacity are initially important due to typically low consumption right after commissioning,” comments Kari Hämekoski, Fund Manager of BGFA and Senior Programme Manager at Nefco.
Future recommendations
The study underscores that RBFs remain a suitable support instrument for the mini-grid sector, but they need to be designed with more pragmatism, streamlined with digital tools and tailored to different developer types. For developers and investors to put their trust in RBF programmes, delayed disbursements should be avoided so that they can take up their rightful place as de-risking instruments.
To succeed, future RBFs must establish a track record of predictable, on-time disbursement. RBF programmes must also be complemented by other support mechanisms and not operate in isolation. With just under five years remaining to achieve SDG7, urgency is paramount. RBFs must evolve from slow, bureaucratic grant channels into agile, strategic accelerators – or risk becoming yet another bottleneck in the race towards universal electrification.
The study lists five key aspects of designing and implementing RBF programmes to support the scale-up of energy access in Africa:
- Clarify programme objectives and design them accordingly.
- Re-design incentive structures to focus on energy consumption rather than just connections.
- Address pre-financing challenges through early milestone payments and integrated
pre-financing offerings. - Streamline verification processes using digital technologies.
- Enhance coordination and alignment with in-country actors, especially national governments, programme donors and other results-based financing programmes.
By the end of October 2025, the BGFA programme had contracted six mini-grid service providers in four Sub-Saharan African countries. The aim is for these services providers to deploy over 40 mini-grid sites by the end of 2029. In total, 8.7 million people are expected to receive access to clean energy solutions through BGFA, once projects are implemented in rural areas of Burkina Faso, the DRC, Liberia, Mozambique, Uganda and Zambia.
Background of the study
The study, written by The Future of Energy, is intended for policymakers, donors and actors in the private sector working to scale up energy access through mini-grid solutions in Africa. The aim of the study, which was commissioned by Nefco in early 2025, was to assess the effectiveness of Results-Based Financing (RBF) mechanisms in supporting mini-grid development across Africa, including the BGFA programme. Key objectives included conducting a desk review of RBF programmes across Africa; evaluating existing mini-grid business models; analysing the policy and support frameworks in BGFA-supported countries, identifying possible barriers; and evaluating the effectiveness of deploying results-based financing programmes.
For further information about the study:
Visit beyondthegrid.africa and read the study Lessons learned from 12 years of mini-grid results-based financing in Africa.
A printable version is available here.
For further information, please contact:
Aleksandra Reskalenko, Programme Manager, Nefco
aleksandra.reskalenko@nefco.int, +358 10 6180 490
Kari Hämekoski, Fund Manager of BGFA and Senior Programme Manager, Nefco kari.hamekoski@nefco.int, +358 10 618 0660
André Troost, Director of Consulting, the Future of Energy (TFE)
andre@thefutureof.energy
Photo: Commissioned mini-grid site in Goma, Democratic Republic of the Congo – Nuru