Electricity access continues to improve in 2024 - after first global setback in decades

The market for mini-grids has been growing in recent years as more countries institute regulatory frameworks to facilitate the financing and implementation of these projects. Around 27 million people were connected to a mini-grid in sub-Saharan Africa in 2021. Countries such as Nigeria and Uganda have seen an acceleration in the number of mini-grid licenses that have been permitted and registered, and in the number of customers connected to mini-grids. Based on planned projects and permits in the region we estimate this trend to continue to accelerate and that by the end of 2023 around 40 million people, or 3% of the population, had access through a mini-grid in sub-Saharan Africa.

A surge in Solar Home Systems (SHS)2 is also playing a key role in electricity access, reaching more than one third of the region's total new connections in 2023 while being almost negligible just a decade ago. Despite a challenging macroeconomic context, according to GOGLA, sales of SHS in sub-Saharan Africa increased 3% in 2023, after a remarkable 54% increase in 2022. While there was a slight decrease in sales in more established markets in eastern Africa, these were outweighed by continued growth in west African markets, driven by Nigeria, and record sales in southern Africa.

According to IEA estimates, in 2023 around 43 million people or 4% of the population in sub-Saharan Africa have access through SHS, and an additional 30 million use SHS as a source of back-up electricity. The market for SHS as back-up has seen a large uptick recently in Nigeria, South Africa, and Angola, where power cuts and reliability issues have prompted many residents to rely on backup diesel and petrol generators or SHS to compensate for electricity shortfalls. While SHS sales continue to grow in Africa, elsewhere the market saw a decline in 2023. In developing Asia, sales of SHS continued to decrease in 2023 due to increased grid connectivity and the use of grid-connected solar systems.

Data from the first months of 2024 indicate that the rate of new household grid connections in sub-Saharan Africa is set to stay at the levels seen in 2023. At the same time, recent analysis suggests record mini-grids connections in 2024. Conversely, the recently released GOGLA data for the first half of 2024 suggest that this year both global and sub-Saharan Africa SHS sales might settle below the highs of 2023, but East Africa, the world's largest market, is turning back to growth.