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This white paper by the ARE Financier Circle examines how Results-Based Financing (RBF) for mini-grids in sub-Saharan Africa can be optimized to better mobilize private commercial capital. It argues that current RBF designs often prioritize short-term connection numbers over long-term business viability, creating 'cliff-edge risks' and administrative barriers that deter investors. The paper proposes a four-pillar approach focusing on aligning impact metrics with commercial sustainability, adjusting disbursement schedules to support capital raises, introducing lifecycle risk mitigation instruments, and fostering ecosystem-wide collaboration.

This report, based on the 2023 Energy Access Investment Forum (EAIF), outlines the potential and challenges of green mini-grids in sub-Saharan Africa. It emphasizes the need for patient growth capital, improved regulatory frameworks, and the integration of productive uses of energy to ensure the commercial viability and sustainability of distributed renewable energy (DRE) solutions.