Publication - Designing Public Funding Mechanisms in the Off-Grid Solar Sector (English)

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Designing Public Funding Mechanisms in the Off-Grid Solar Sector (English)
The World Bank
Rysankova,Dana; Miller, Charlie
Published in
May 2022
This report provides guidance to governments and their development partners on how public funding can be used to provide energy access to households through off-grid solar (OGS) solutions. It is intended for policy makers and other stakeholders involved in the design and implementation of off-grid electrification strategies and programs. It focuses on domestic solar solutions such as solar lights, solar home systems, and related appliances. A wide range of solutions is needed to achieve universal electricity access, including on-grid, minigrid, and off-grid electrification. In off-grid settings, solutions are needed for both domestic and productive use of electricity, as well as for public facilities. Other reports are available that explore ways to deploy public funding to support grid and mini-grid electrification, as well as off-grid productive uses and public facilities. The report explores how public funding mechanisms can be deployed on the supply side, the demand side, or both to provide energy access through OGS. Funding mechanisms are defined as “supply-side” when funding goes to companies or investors to reduce the cost or risk of supplying products to end users. Funding mechanisms are defined as “demand-side” when they are designed to make OGS more affordable for end users. The report considers the circumstances in which each funding mechanism is likely to be appropriate, as well as the advantages, disadvantages, risks, and key design considerations for each approach. Based on extensive desk research and stakeholder consultation, the report shares the lessons that practitioners have learned from using each mechanism, and provides guidance on how to design and implement mechanisms effectively in the future.