An IAD framework analysis of minigrid institutions for sustainable rural electrification in East Africa: A comparative study of Uganda and Tanzania

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Authors

  • Lillian Donna Namujju
  • Henrietta Acquah-Swanzy
  • Irene F. Ngoti
Minigrids offer a viable solution for extending electricity access to underserved areas beyond the reach of main-grids. Their sustainability is crucial for rural electrification prospects in Sub-Saharan Africa. Using Ostrom's IAD framework, we conduct a socio-cultural and institutional analysis of minigrids across their development stages. We map sector actors and their respective roles in the minigrid sector providing a framework for their interactions and choices towards sustainable outcomes. We further present a comparative institutional assessment of Uganda and Tanzania's minigrid sectors; analyzing outcomes and constructing a diagnostic framework of the causal actor interactions and exogenous contexts hindering sector sustainability. Our study reveals the inherent challenge posed by the complex interdependencies within the minigrid sector and its relationship with adjacent sectors. It further uncovers significant institutional inefficiencies in the minigrid sectors of Uganda and Tanzania. We advocate a flexible solution strategy, wherein, regulators strategically modify the adaptable components of the IAD framework considering the specific root causes of problems. This approach allows for targeted interventions through precise adjustments to effectively address underlying issues. Additionally, we emphasize the importance of policy integration mechanisms with adjacent sectors and a policy design process that incorporates the core values of sector actors.
Original languageEnglish
Article number113742
JournalEnergy Policy
Volume182
ISSN0301-4215
DOIs
Publication statusPublished - 01.11.2023

Bibliographical note

Funding Information:
At its center, Fig. 4 lists the central actors: Investors are private, local governments, donor/development partner agencies, or host communities funding minigrid implementation. Regulators are autonomous agencies including electricity regulatory authorities, rural electrification agencies, etc. who regulate, supervise and monitor operations. The role of the central government is through the legislature making policy and government ministries e.g. Ministry of Energy facilitating sector funding as well as creating an enabling environment (Akinlabi and Oladokun, 2021). Local governments provide permitting and local approvals for minigrid operations. Host communities are target consumers of power and resource partners in minigrid implementation. Interest groups including Non-Governmental Organizations (NGOs), donors, and development partners are usually invested in influencing policy.Key in the countries' minigrid sectors is government's central role in the determination of minigrid sites and the licensing and pre-approval roles of the regulatory authorities including Uganda's Electricity Regulatory Authority (ERA), the Rural Electrification Agency (REA(U))2 and the National Management Environment Authority (NEMA) as well as Tanzania's Energy and Water Utilities Regulatory Authority (EWURA), her Rural Energy Agency (REA(T)) and the National Environment Management Council (NEMC). ERA and EWURA are responsible for overall regulation and licensing including tariff setting, sector supervision, disputes settlements, etc; REA(U) and REA(T) are responsible for coordination of government-, donor-funded and private sector-led rural electrification programmes and NEMA and NEMC play an environmental protection role.Minigrid financing. Uganda's Rural Energy Fund (REF) was established in 2007 to fund electricity access projects to rural communities through the development of minigrids. The program, funded by the World Bank and the government of Uganda, offers financial incentives to private minigrid developers consisting of upfront capital subsidies of up to 50% (Hoeck et al., 2022; Lane et al., 2018). Tanzania's REA(T) runs a similar incentive program for private developers funded by the government of Tanzania covering a capital subsidy of up to 75% (Melnyk and Kelly, 2019) and its Rural Based Financing program offers subsidies of $500 per connection (Phillips et al., 2020). Tanzania's program offers higher developer financing than Uganda's program possibly accounting for the higher investment attraction in their minigrid sector. Additionally, Tanzania's program is managed by a single agency, REA(T) (Willcox and Cooper, 2018), while Uganda's program is managed by multiple agencies (REF, REA(U), Uganda Electricity Generation Company Limited) which leads to greater administrative complexity (Twesigye, 2019) that would hinder investment attraction in the sector.This work was supported by the Africa: Research and Teaching Platform for Development - Sustainable Modular Grids Project (A:RT-D Grids) funded by the German Federal Ministry of Education and Research (BMBF) under the Client II program – funding reference 03SF0607A.The authors declare the following financial interests/personal relationships which may be considered as potential competing interests: Lillian Donna Namujju, Henrietta Acquah-Swanzy, Irene F. Ngoti reports financial support was provided by the Africa: Research and Teaching platform for Development - Sustainable Modular Grids Project (A:RT-D Grids).

Funding Information:
Minigrid financing. Uganda's Rural Energy Fund ( REF ) was established in 2007 to fund electricity access projects to rural communities through the development of minigrids. The program, funded by the World Bank and the government of Uganda, offers financial incentives to private minigrid developers consisting of upfront capital subsidies of up to 50% ( Hoeck et al., 2022 ; Lane et al., 2018 ). Tanzania's REA(T) runs a similar incentive program for private developers funded by the government of Tanzania covering a capital subsidy of up to 75% ( Melnyk and Kelly, 2019 ) and its Rural Based Financing program offers subsidies of $500 per connection ( Phillips et al., 2020 ). Tanzania's program offers higher developer financing than Uganda's program possibly accounting for the higher investment attraction in their minigrid sector. Additionally, Tanzania's program is managed by a single agency, REA(T) ( Willcox and Cooper, 2018 ), while Uganda's program is managed by multiple agencies (REF, REA(U), Uganda Electricity Generation Company Limited) which leads to greater administrative complexity ( Twesigye, 2019 ) that would hinder investment attraction in the sector.

Funding Information:
This work was supported by the Africa: Research and Teaching Platform for Development - Sustainable Modular Grids Project (A:RT-D Grids) funded by the German Federal Ministry of Education and Research (BMBF) under the Client II program – funding reference 03SF0607A .

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