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Forging Public-Private Partnerships on Energy Access

Marcus Wiemann, Executive Director (ARE)

Promote Private Sector Investment in Africa's Renewable Energy Markets

Ina de Visser, Project Manager (RECP)

The Africa-EU Renewable Energy Cooperation Programme (RECP) has been partnering with ARE for a number of years, culminating in several publications and jointly-organised events and workshops. RECP considers ARE to be a vital strategic partner in the area of energy access and services where rural electrification is a focus, and looks forward to continue and build upon the existing partnership.

 

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The Africa-EU Renewable Energy Cooperation Programme (RECP) has been partnering with ARE for a number of years, culminating in several publications and jointly-organised events and workshops. RECP considers ARE to be a vital strategic partner in the area of energy access and services where rural electrification is a focus, and looks forward to continue and build upon the existing partnership.

The RECP aims at renewable energy market development, by supporting

  1. the development of favourable policies and regulations,
  2. cooperation between African and European companies,
  3. access to finance for these companies and
  4. the development of relevant skills

Donors of the RECP are the European Commission, Austria, Finland, Germany and the Netherlands.

At the International ARE Energy Access Workshop in Madrid on 5 March 2015, RECP contributed by making a presentation on “Promoting Private Sector Investment in Africa’s Renewable Energy Markets”, highlighting the crucial role entrepreneurs and businesses play in realising the continent’s vast, and largely untapped, renewable energy potential. The presentation held by myself also outlined RECP’s services to businesses, ranging from the provision of detailed market reports, support in identifying concrete project opportunities as well as B2B match-making and assistance in accessing project preparation and financing facilities. 

The following example of an RECP regional project illustrates the importance of improving framework conditions, which are a prerequisite for renewable energy markets to take off.

Green Mini-grids in the SADC Region
The South African Development Community (SADC) faces major challenges in improving access to modern energy services as a region. In order to promote mini-grids in the region, the RECP has supported the Regional Electricity Regulators Association of Southern Africa (RERA) in developing policy and regulatory tools to improve framework conditions for mini-grids. 

Mini-grids offer a number of areas within which the private sector can play a critical role. This, however, requires a coherent and sound policy environment that ultimately provides assurances to investors, for instance, by fixing retail prices and service conditions under a favourable tax regime. 

The outputs of the SADC project consist of a market needs and demand analysis and legal templates for Power Purchase Agreements, generation and distribution licenses, as well as guidelines for mini-grid planning and development, economic regulation and technical regulation. The work under this project has fed into the development of the Mini-Grid Policy Toolkit.

To obtain project outputs, please visit the EUEI PDF website. For more detailed information on RECP’s services, visit theRECP website or contact us at recp(at)euei-pdf.org

 

Cooperation and Innovation

By Serge Remy, Head of Sales & Marketing, Studer Innotec SA

Innovation is more than ever the key to success because it helps a brand meet the very specific needs of a market and differentiating it from its competitors. Yet, innovation cannot be ordered. It is a long and mature process involving many divisions of a company, the first of them being the R&D team. And, when it comes to a real breakthrough, an external contribution may be needed.

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By Serge Remy, Head of Sales & Marketing, Studer Innotec SA

Innovation is more than ever the key to success because it helps a brand meet the very specific needs of a market and differentiating it from its competitors. Yet, innovation cannot be ordered. It is a long and mature process involving many divisions of a company, the first of them being the R&D team. And, when it comes to a real breakthrough, an external contribution may be needed.

While having a strong and efficient R&D team, Studer Innotec at times uses the competences of the Engineering School of Sion and its Research lab, in Switzerland, close to where the company manufactures its products.

This technical cooperation has already brought major innovations leading to the now famous Xtender series and to a large MPPT solar charge controller range, namely VarioTrack and VarioString series, which have acquired a significant share of the solar market.

Even the most efficient R&D team needs external inputs: from the market to meet specific requirements, from the social environment to adapt to today’s life models and from the scientific world to integrate new technologies, and this is where the cooperation with our Engineer School makes sense. 

Studer Innotec is committed to the market
All inverters and MPPT solar charge controllers are not made equally, because needs for energy are different from one person to another, from one application to another.

This is why anytime and anywhere you need well-tailored solutions, smoothly operating and long lasting systems, you will find Studer Innotec’s products meeting the highest requirements. Our inverters and MPPT solar charge controllers are designed to address your very specific needs for an energy you can rely on, for long.

New products
The latest result of this long term cooperation with the local Engineering School is theVarioString series, consisting of two high voltage MPPT solar charge controllers: VS-120, 120A/200-900Vdc (introduced in 2014) and the brand new VS-70, 70A/200-600Vdc, introduced in April 2015.

These two MPPT charge controllers are absolutely unique on the market in terms of performance: conversion efficiency achieved with over 98% as well as a best in class MPPT efficiency for isolated string MPPT battery charge regulators.  The unique features of these two new products are a breakthrough in the field of hybrid systems. The design is done in a way to be a perfect complement to the well-known range of hybrid inverters, Xtender, today largely used in rural electrification, for residential or commercial applications, as well as for mini-grids. The high string voltage allowed by the VarioString series offers significant savings on installation costs, which impacts favourably the capital investment of your hybrid system.

 

OFID Supports Energy Access Fund

By Namat Al-Soof and Fuad Siala, Energy Consultants, OFID

Access to modern forms of energy is the first incremental level of access to services to fulfil basic human needs. The OPEC Fund for International Development (OFID) has recognised the importance of energy access and is giving it strong priority through its energy for the poor initiative. The institution has played a leading role in the UN Secretary-General Ban Ki-Moon’s SE4All Initiative and in helping shape the new Sustainable Development Goals (SDGs) with the eradication of energy poverty as SDG7.

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By Namat Al-Soof and Fuad Siala, Energy Consultants, OFID

Access to modern forms of energy is the first incremental level of access to services to fulfil basic human needs. The OPEC Fund for International Development (OFID) has recognised the importance of energy access and is giving it strong priority through its energy for the poor initiative. The institution has played a leading role in the UN Secretary-General Ban Ki-Moon’s SE4All Initiative and in helping shape the new Sustainable Development Goals (SDGs) with the eradication of energy poverty as SDG7.

As of the end of 2014, OFID had approved nearly US$3.9bn, almost one-quarter of its commitments, in support of energy-related projects ranging from the construction and rehabilitation of infrastructure and installation of household connections, to research and capacity building.

Most recently, OFID has extended €5m for an equity participation in the Energy Access Fund (EAF), an impact investment fund sponsored by Schneider Electric. The fund achieved a first close at €54.5m with commitments from CDC UK, European Investment Bank, FISEA – PROPARCO, and AFD - FFEM. It will focus on equity investments of € 2.5m to € 5m, with an average investment size of around € 3.5m. The expected investment horizon will range from five to seven years.

The newly-launched fund will transform millions of lives in underserved communities in sub-Saharan Africa, India and some poorer countries in East Asia by supporting private sector enterprises facilitating the provision of low-carbon, affordable access to electricity. Targeted countries include Burundi, Ethiopia, Kenya, Malawi, Mozambique, Rwanda, Tanzania, Uganda, Zambia and Zimbabwe.

The EAF will target off-grid and mini-grid infrastructures, especially in rural and peri-urban areas, where traditional sources of funding are hard to come by. These off-grid and small-grid investments are generally managed by Small to Medium Enterprises (SMEs), which have been historically overlooked by traditional financiers. The Fund will address a gap in Bottom of the Pyramid (BOP) markets by investing in the growing universe of energy-related SMEs struggling to get access to financing. The Fund will also invest in institutions involved in the financing of energy access projects or distributing energy loans to rural or sub-urban microfinance-related companies.

The investment environment of the countries which EAF is targeting will vary. In some countries such as Rwanda, there is a favourable economic climate for sustainable economic growth, whereas in some other Sub-Saharan African countries conditions may be challenging. Since March 2010, the EAF Team has reviewed 37 investment opportunities matching the Fund’s geographical target markets.

In addition to funding, a range of technical support will be provided to offer practical help and advice for local businesses concerning management, governance, energy efficiency, and environmental best practices.

 

Onergy - Expanding Human Capability

By Suman Lahiri, Regional Director, EBTC

Over 600 million people in India lack access to energy due to several reasons including poor quality, inappropriate products, failure of energy projects, etc. Lack of service network in rural areas have generated a trust deficit among customers leading to non-sustainability. Punam Energy Pvt Ltd (ONergy) is a renewable energy venture. It was established in 2009 to provide complete energy solutions in India. It creates an eco-system that connects grassroots organisations, technology and finance to manage the energy demand and resources of the rural population. ONergy creates a unique full service distribution infrastructure by establishing Renewable Energy Centres and operates through a network of trained rural entrepreneurs making it decentralised, sustainable and scalable.

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By Suman Lahiri, Regional Director, EBTC

Over 600 million people in India lack access to energy due to several reasons including poor quality, inappropriate products, failure of energy projects, etc. Lack of service network in rural areas have generated a trust deficit among customers leading to non-sustainability. Punam Energy Pvt Ltd (ONergy) is a renewable energy venture. It was established in 2009 to provide complete energy solutions in India. It creates an eco-system that connects grassroots organisations, technology and finance to manage the energy demand and resources of the rural population. ONergy creates a unique full service distribution infrastructure by establishing Renewable Energy Centres and operates through a network of trained rural entrepreneurs making it decentralised, sustainable and scalable.

EBTC scans for interesting business models, surrounding sustainable solutions. These initiatives can be a source of inspiration for EU SMEs to understand and work in the Indian market. I have read and heard about ONergy. Recently, I got an opportunity a few months back to visit one of its unique initiatives in Bagnan (near Kolkata, India) on the invitation by Mr. Vinay Jaju (CEO of ONergy) - a solar-based agriculture pump project.

The project shall replace diesel usage and can be used for both drip irrigation, as well as, regular methods of irrigation. The pump set is managed by a local micro entrepreneur who has information on water demand of the nearby agricultural lands and books water supply orders in advance. Water is supplied at a scheduled time and a fee is charged for supplying water to the farmers at a much cheaper rate than that of diesel-based water supply. 

This project is co-financed by Switch ON-ONergy and National Bank for Agriculture and Rural Development (NABARD). 90,000-litres of water each day can be pumped up by the solar energy driven pumps, which in turn can irrigate 10-12 surrounding acres. A back-up reservoir with a capacity of 30,000-litre has also been built. The reservoir can supply water in the early morning and evening hours when the sun is not strong enough to generate energy. The farmer now pays 10-20% less than before.
 

This is an innovative business model and ONergy is planning to scale up the model elsewhere. It not only generates employment but also saves the money of local farmers which can be utilised for other useful purposes. Mr. Sudipta Dawn (General Manager, ONergy) is always on the lookout for energy efficient applications in rural areas. ONergy is developing solar-based systems for lighting, as well as, computers, irrigation equipment, pumps, and more to expand the utility for the rural people. We need business models in rural market that expands human capability. The modern business entering into BoP market should design their strategic processes keeping this in mind.

 

Knowledge Transfer from the Industry down to Micro-Entrepreneurs: Preparation of the second run of AEE-Programme

By Geraldine Quelle, Head of Marketing, Phaesun GmbH

A solar hairdresser offers services in the Ethiopian mountain village Laka. People charge their mobile phones at a solar charging station. In the evening, the local restaurant shows movies on a solar-powered TV.

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By Geraldine Quelle, Head of Marketing, Phaesun GmbH

A solar hairdresser offers services in the Ethiopian mountain village Laka. People charge their mobile phones at a solar charging station. In the evening, the local restaurant shows movies on a solar-powered TV.

These are the results of the first run of the AEE-programme programme (Applied Education and Entrepreneurship Programme) that was launched in 2013 by the University of Arba Minch/Ethiopia, the University Of Applied Sciences Of Neu-Ulm/Germany and the solar company Phaesun. AEEP is supported by DAAD (German Academic Exchange Service), co-financed with funds from the Federal Ministry of Education and Research (BMBF).

The target of this programme is the introduction of a new study course at the southern Ethiopian University Arba Minch with a focus on the development and implementation of BOSS-solutions. BOSS stands for Business Opportunities with Solar Systems, these are solar systems that are used for income generation in areas without reliable electricity grid.

In order to prepare the second run of the programme, eight lecturers from Arba Minch are staying in Germany for a two months’ preparation workshop at the moment. This workshop mainly deals with the preparation of the training documents for the courses in Ethiopia while the weak points of the first run’s technical systems are to be identified and BOSS ideas discussed with Phaesun experts for round two.  Phillip Travers from the University of Neu Ulm is responsible for the didactical part. He coordinates the project measures both in Germany and Ethiopia. "This project means a learning process for all participants", he explains. "It is all about an exchange of knowledge between the partners of the industry down to the users of solar systems."

Lessons learnt from the first run:
Local entrepreneurs could not partly come to terms with the technology and there was some "fear of innovation". On the other side, the students who trained them could not directly benefit from the introduction of these businesses which lowered their motivation.  As a result, the second run will address university graduates who intend to directly establish their own businesses mainly in rural areas.

Solar wagons were developed during the first run to take into account the fact that entrepreneurs in rural areas traveled from market to market and needed mobile solutions. The solution with the solar carts was difficult especially in the rainy season when paths became muddy. The second run will focus on Plug and Play solutions. Solar systems are to be arranged in a way that they can be easily moved with different transport means (e.g. hand carts, pack animals).

 

  • Methodology For Mainstreaming Appropriate Green Technology Initiatives In Rural Areas Of The Arab Region (Beirut, 25-26 Feb 2015)

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    Represented by ARE member Trama TecnoAmbiental, Xavier Vallvé participated at the Expert Group Meeting on the Methodology for Mainstreaming Appropriate Green Technology Initiatives in Rural Areas of the Arab Region hosted by UN-ESCWA. 

    The two-day event was attended by 43 experts from 17 countries. During his intervention, Xavier Vallvé highlighted the commitment of industry to rural electrification with renewable energy sources as proven by the existence and dynamism of the Alliance itself. Among other recommendations he pointed out the need to have light-handed policy for off grid rural electrification, to engage private developers and operators, to recognise that grants and public investment are needed, particularly in the capital investment phase of projects, to close the gap between total cost and willingness to pay of the users and to ensure that an adequate tariff structure assures long term sustainability.

  • International Are Energy Access Workshop & General Assembly (Madrid, 5-6 Mar 2015)

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    Over 150 energy access stakeholders from the public and private sector, as well as from civil society, gathered at the Ministerio de Economia y Competitividad to discuss opportunities in rural electrification markets in a one-day unique business matchmaking workshop. The Alliance, in cooperation with ICEX Spain Trade and Investment, organised the workshop to further advance cooperation between the public, private and finance sector. Marcus Wiemann, ARE Executive Director: “Thanks to the kind support of our sponsors and more importantly the input from the public and private off-grid market professionals (presentations), the workshop was a result of good outcomes from previous ARE matchmaking events whose aim was to assist market participants in their efforts to engage in upcoming initiatives and projects in the pipeline.”

    At the 2015 ARE General Assembly the next day, ARE announced the election of three new members to its Board: Thomas Gottschalk (Mobisol GmbH, Germany), Karl Kolmsee (Smart Hydro Power GmbH, Germany) and Vivian Vendeirinho (RVE.SOL, Portugal). The new board members bring to the Alliance an extensive and wide-ranging experience in energy access through renewables, including small hydro and solar technologies.

    Read about it in our press release.

  • The Invest’€Lec International Salon (Yaoundé, 10-13 Mar 2015)

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    The Electricity Sector Regulatory Agency (ARSEL) organised theInvest’Elec International Salon - a conference and exhibition focused on realising current and future investment and business opportunities in renewable energy to boost clean rural electrification in Cameroon.

    As supporting organisation of the Salon, ARE mobilised local and international companies to promote public-private partnerships and dialogue on investment and business opportunities in renewable energy and access to electricity in rural areas. Over 261 small hydro sites, up to 5 MW each (totalling 247 MW) and around 30 biomass sites have been identified. 6 sites have now become pilot projects. 

    In addition to raising the visibility of the Salon, ARE facilitated the participation of the European Union Energy Initiative – Partnership Dialogue Facility (EUEI PDF) during the programme at the Salon.

  • German-African Energy Forum (Hamburg, 4-5 May 2015)

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    ARE is proud to have been a supporter of the 9th German-African Energy Forum - European Power for Africa. The Forum is the main platform of German-African energy business and regards itself as one of the most important conferences of the sector in Europe.

    ARE Vice-President Caroline Nijland (FRES) kicked off the rural electrification session by challenging panelists Aziz Fall (REA Senegal), Elmar Steurer (HNU), Georgios Pantoulis (EC), Rainer Hakkala (GIZ) and Thomas Gottschalk (Mobisol) on their energy access commitments for 2015, which later formed the basis on how they could best work together. ARE wishes the panelists the best of success to achieve the set targets.

  • Save-The-Date: Access To Energy In Africa Workshop (Milan, 14 May 2015)

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    Sub-Saharan Africa stands out as the region where access to modern energy (both electricity and clean cooking solutions) is most lacking. ARE member ACCRA CCS from Italy will participate in the Access to Energy in Africa Workshop at WAME (World Access to Modern Energy), which is part of the World EXPO in Milan. The workshop will not only showcase the findings of the IEA’s Africa Energy Outlook which analyses the situation and advances scenarios and suggestions, but will also promote the debate among scholars, policy makers and cooperation practitioners.

    Representatives from WAME, EXPO, IEA, the Ugandan Ministry of Energy and Mineral Development, EUROPEAID and the Ministry for Foreign Affairs and International Cooperation are expected to speak.

  • 2nd United Nations SE4All Forum (New York, 17-21 May 2015)

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    As business partner association of SE4All, the Alliance had the pleasure to contribute to the success of this year’s 2nd UN SE4All Forum with a number of engagements and commitments. With an increase in registration from 1,500 in 2014 to 2,500 this year at the 2nd UN SE4All Forum, universal access to clean energies is gaining more and more attention worldwide.

    The session on mini-grids moderated by Richenda van Leuven (UNF), co-lead of the HIO Secretariat, faced a lot of interest from the attendees. Thanks to the kind support from Rockefeller Foundation and on behalf of the Clean Energy Mini-Grids High Impact Opportunity (HIO), ARE presented its first edition of a mapping tool covering clean energy mini-grid support providers from the public, philanthropic and commercial sectors. Available as a written publication and online, this mapping tool provides an ideal resource for potential project developers and investors. 

    In parallel, the Sustainable Bioenergy High-Impact Opportunity (HIO) was also launched at the Forum to facilitate the development and deployment of sustainable bioenergy solutions. On that occasion, Partners for Euro-African Green Energy (PANGEA) and ARE presented lessons learnt by their members on how to effectively implement innovative models that utilise bioenergy technologies for electrification purposes through their latest information paper. The paper looks at inclusive business models, value addition and provides policy makers with policy recommendations to encourage the uptake of biomass as part of decentralised energy production. Given the high interest raised, ARE is planning to create an extended version. Interested stakeholder who wish to present their success stories are welcome to contact David Lecoque.

  • European Development Days (Brussels, 3-4 Jun 2015)

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    The European Development Days is a key Forum for leaders and stakeholders to openly address global challenges and develop innovative solutions. This year’s edition represents the flagship event of the European Year for Development, under the thread of 'Our world, our dignity, our future'. A side event addressing the forum’s topic on Sustainable Energy for Growth is being organised, where two ARE members will showcase their mini-grid project development expertise and innovative financing instruments. 

    The aim of the side event is to bring together experts to discuss issues related to sustainable energy investments’ mobilisation, such as innovative business models, forms and volumes of financing required, and gaps in the landscape of support instruments. The session will focus on innovative energy market systems and discuss topics related to small and meso-scale on-grid renewables, as well as mini-grids and standalone systems for rural electrification.

    Feel free to visit us at the ARE stand.

  • Invitation: Off-Grid Platform At Intersolar Europe (Munich, 9-12 Jun 2015)

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    Intersolar Europe has traditionally been the meeting place for the photovoltaic off-grid sector. In order to acknowledge this growing market, to facilitate the exchange of experience and to expand your network, Intersolar Europe, OTTI, BSW-Solar and ARE will synchronise their activities during Intersolar Europe from 2015 onwards to create a joint Off-grid Platform and stimulate synergies.

    From 9 to 12 June 2015 you can attend the lectures and company presentations, whilst also obtaining information on the recent developments in the off-grid photovoltaic sector. The newly created Off-grid Platform will serve as the meeting point for the global off-grid sector and scientific community. We look forward to welcoming you at the Intersolar Off-grid Platform and we would like to invite you to present your company in the spotlight as a sponsor or exhibitor. In case of interest, kindly return the registration form to Ling Ng by 30 April.

    In addition, if you wish to position your organisation as a key player in the field of decentralised energy solutions and off-grid market technologies or you would simply like to learn more about this very promising field of business, we are seeking sponsors for the ARE-BSW evening reception on 10 June 2015. Contact: Ling Ng.

  • Markus Sebastian Hole Joins The Alliance’s Secretariat

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    Since the end of March, Markus Sebastian Hole has joined the Alliance as Events and Communications Intern.

    To provide support to the increasing number of activities, the Alliance is pleased to welcome Markus Sebastian Hole to the team. Markus is a Norwegian European Studies postgraduate with experience from both the European External Action Service and the Norwegian Ministry of Foreign Affairs. He will be with us the next three months and work on events and communication. Markus can be contacted atm.hole(at)ruralelec.org.

  • Sharing The Load: Public And Private Sector Roles In Financing Pro-Poor Energy Access

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    By iied

    Increasingly the private sector is expected to finance access to modern energy services in developing countries. Yet governments and donors still have much to learn about working with business, while low-income markets are unfamiliar and risky for private investors. In this report iied presents some innovations and challenges in financing pro-poor energy access. It highlights the need to identify those population segments (low-income, subsistence or extreme poverty) that can be reached most effectively by public, private and combined finance models.

  • Increasing Private Capital Investment Into Energy Access: The Case For Mini-Grid Pooling FacilitiesIncreasing Private Capital Investment Into Energy Access: The Case For Mini-Grid Pooling Facilities

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    By UNEP

    Mini-grids are viewed as one of the key elements in securing universal energy access in the developing world. However, current levels of investment into renewable decentralised energy are insufficient to reach the development goals identified by initiatives such as the UN’s Sustainable Energy for All. In order to reach such levels of deployment, new models of financing need to be designed. In this report, UNEP provides a conceptual framework for the development of a private sector facility to pool and cross-collateralise diverse capital to support international mini-grid portfolios.

  • Mapping Channels To Mobilise Institutional Investment In Sustainable Energy

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    By OECD

    This report develops a framework that classifies investments according to different types of financing instruments and investment funds, and highlights the risk mitigants and transaction enablers that intermediaries (such as public green investment banks and other public financial institutions) can use to mobilise institutionally held capital. This framework can also be used to identify where investments are or are not flowing, and focus attention on how governments can support the development of potentially promising investment channels and consider policy interventions that can make institutional investment in sustainable energy infrastructure more likely.

  • The India Off-Grid Electricity Market

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    By ARE

    This brief is an output of the cooperation agreement between the European Business and Technology Centre (EBTC) and ARE - a cooperation which aims to facilitate rural electrification competence and technology transfer from Europe to India. This document gives readers a brief overview of the potential of decentralised renewable energy generation in India with a view to stimulate private sector involvement in this sector. While the scope of this study is limited to micro-grids that can distribute locally produced electricity from solar, small wind and small hydro plants, core messages expressed may apply to renewable energy solutions of larger sizes too.

Please note that views expressed in the Co-Editorial, the In Focus section and the Special Feature of the newsletter, are those of the contributors and do not necessarily reflect ARE’s opinion.

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