In Nigeria and Kenya, many rural farms and small agro-businesses operate off-grid, relying on fuel generators for power. A recent study by Temilade Sesan, Lucy Baker, and others explores how these communities can shift to renewable energy mini grids—making them both profitable for providers and affordable for farmers.
What Are Mini Grids?
Mini grids are localized power systems that generate between 10kW to 10MW—often using solar or hydro energy. Unlike national power grids, they are ideal for remote areas. For instance, Nigeria aims to install 2,700 mini grids by 2030 to provide electricity for the 40% of its population still in the dark.
Kenya already has 110 operational mini grids and is developing 150 more. Setting up a mini grid costs around $1,400—far less than extending the national grid, which can cost over $600,000 for just 10 kilometers.
The Profitability Problem
Despite their promise, rural mini grids across Africa struggle financially. The high setup costs are usually covered by governments or investors. But for sustainability, mini grids must recover these expenses through electricity tariffs—often too expensive for low-income farmers.
To bridge this gap, researchers explored how to make mini grids viable without burdening rural users.
The KeyStarter Model: A Fresh Approach
Through interviews with 12 mini grid firms, researchers identified a new business model—KeyStarter. This model boosts agribusiness productivity, which in turn increases electricity usage and payment reliability.
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In Nigeria, developers offered farmers credit and agricultural inputs to boost crop yields. Farmers then used electricity-powered mills to process crops, increasing their energy consumption.
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In Kenya, poultry farmers received quality feed and access to extension services, making their businesses more profitable—and able to afford electricity.
This anchor-load approach provides a steady income stream for mini grid developers, allowing them to offer lower tariffs to households.
What’s Next?
The KeyStarter model shows that mini grids can thrive by aligning energy with agricultural growth. But to scale this success, private developers need more public funding and cross-sector collaboration—especially among agriculture, energy, gender, and transport policymakers.
The takeaway? Rural electrification in Africa doesn’t just require electricity—it needs smart partnerships that empower farmers, boost productivity, and make clean energy accessible for all.
