Thematic Fiche no. 7: Sustainability – Business Models for Rural Electrification
One of the big hurdles in rural electrification is that supply to remote villages with low income is not economically viable. Therefore, financial sustainability is a very important, as well as challenging, aspect of rural electrification projects and programs. Lack of organisational structures, high levels of initial capital investments, and lack of ability or willingness to pay by rural customers are some of the issues that make it challenging to develop a sustainable business model for rural electrification.
This thematic fiche presents different aspects of business models used in Rural Electrification, and outlines the important issues to consider when designing the business model in a rural electrification project. Specifically, it describes different types of organisation and ownership, financial structures and choice of customers, and looks into the experiences made by ACP-EU Energy Facility projects. It is based on a survey of four projects from the first Energy Facility that have established different business models.
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