What are the capacity-building needs for each ownership model?

Speeches Shim

Short Answer

Technical training and capacity-building needs vary by ownership model. Mini-grid projects require capacity in community engagement, design and installation, financing, regulation and operations and maintenance (O&M). Early in the planning process, developers need to conduct a capacity needs assessment to determine the skills and expertise required given the local context, identify capacity gaps among key actors and create a plan to address those gaps.

Further Explanation of Key Points

Capacity-building Needs by Ownership Model

The following tables summarize typical capacity-building needs for each ownership model. Not all capacity-building needs will apply to all projects; developers also need to consider the local context.

Community-based Model

Local technicians may need enhanced capacity in:

  • Distribution line installation
  • O&M

Community organizations may need capacity in:

  • Tariff design and revenue collection
  • Systems that promote accountability and transparency
  • Collaboration with project stakeholders, including donors, non-governmental organizations (NGOs), private companies, utilities and/or government agencies
  • Promotion of new energy uses, especially productive uses of energy
  • Establishing of processes for conflict management and resolution

Private-sector Model

Private businesses may need enhanced capacity in:

  • Effective community engagement strategies
  • Design, installation, O&M and/or management of mini-grids
  • Tariff design and revenue collection
  • Promotion of productive uses of energy

Utility-based Model

Utilities may need enhanced capacity in:

  • Mini-grid installation and operation (necessary when utility lacks expertise with small-scale mini-grid systems)
  • Effective community engagement strategies
  • Designing appropriate tariffs for mini-grids

Hybrid Ownership Model

Communities, private-sector companies and utilities in a hybrid model may need enhanced capacity in:

  • Effective collaboration
  • Technical expertise and/or management capacity, as described for community-based, private-sector and utility-based models

Community-based Capacity-building Needs

In the community-based model, technical capacity-building needs may vary by technology. Communities are often best suited to manage mini-grid technologies that require only simple maintenance once installed. The local workforce may not have the necessary technical expertise to install, maintain and/or operate complex mini-grid systems.

If a capacity needs assessment reveals technical gaps, training local technicians will improve the project’s sustainability. Some developers rely on technicians from nearby urban centers to maintain mini-grids. Under this model, communities may endure prolonged outages while waiting for assistance. Trained local technicians, on the other hand, can correct simple malfunctions right away, keeping systems running. Project developers may want to provide at least basic technical training to members of the local community. Local technicians will need technical capacity-building throughout all stages of the project. During the O&M phase, mini-grid operators need refresher training programs to keep their skills and knowledge current.

Community cooperatives that manage mini-grid projects may need capacity building in responsible business and accounting practices. Training in designing appropriate tariff structures and collecting revenue is important element in building sustainable mini-grid projects.

Corruption can pose a challenge for developers working with community cooperatives. When corrupt leaders embezzle funds or demand bribes, they limit the effectiveness of projects and undermine community trust. Successful community-owned projects build the capacity of cooperative members to use transparency and accountability in their operations. Cooperatives should communicate frequently with local communities about the status of the mini-grid project, the revenue it generates and how the cooperative is using the revenue.

Private-sector Capacity-building Needs

Private businesses may need to build capacity in engaging with their communities by implementing effective community engagement strategies to build social ties, networks and support. Community engagement examples can include creating partnerships with existing stakeholders and organizations, identifying assets and resources within a community and holding town hall meetings to gather necessary data on needs and priorities.

Private businesses may also need capacity building in design, installation, operations and building maintenance skills since these are critical components to a sustainable mini-grid solution.

Training in tariff design and revenue collection mechanisms are also vital to build technical knowledge within the private sector. The private sector may also need support with promoting productive uses of energy using a mini-grid system.

Utility Capacity-building Needs

Building capacity among utilities to promote mini-grid projects is critical to developing rural energy markets. Utilities may need capacity to install, manage and maintain the mini-grid operation. Utilities may also need capacity in effective community engagement strategies such as GIS maps that provide details within a community by addresses and geographic area. Another approach to build knowledge within utilities includes training in how to design appropriate tariffs and collect payments for mini-grids.

Hybrid Ownership Capacity-building Needs

Communities, private-sector companies and utilities in a hybrid model may need to develop capacity in how to effectively collaborate. These entities may also need to build their technical expertise and/or management capacity, as described in the community-based, private-sector and utility-based models.

Putting it Into Practice

Conducting a Capacity Needs Assessment

A thorough capacity needs assessment helps a project developer understand and plan for a project’s capacity-building needs. This is a crucial part of mini-grid project planning. Project developers can use capacity needs assessments to identify obstacles to success and address them early in the process.

A capacity assessment has four key steps:

  1. Identify the key actors
  2. Determine the project’s capacity needs
  3. Assess existing capacity
  4. Identify capacity gaps

The following table provides a template for assessing capacity needs for mini-grid projects.

Capacity Needs Assessment Process
Step Key Questions
1. Identify the key actors. Who will own, manage and operate the mini-grid? Who will use the electricity? (Examples: local communities, private enterprises, utilities.)
2. Determine the project’s capacity needs. What technical, financial and management capacities will actors need to operate and manage the project? (Examples: mini-grid technical expertise, tariff collection capacity.)
3. Assess existing capacity. What technical, financial and management capacities do project partners have?
4. Identify capacity gaps. Of the required capacities, which are lacking? (Examples: O&M, system design, community awareness campaigns.)

Designing a Capacity-building Strategy

Once the capacity gaps are clear, the project will need a capacity-building strategy. The first step is to determine which capacity needs the developer can address and which will require outside assistance.

A mini-grid technology company, for example, might be able to train local operators to maintain the mini-grid. The company might need a partner, however, to help educate the community about uses of electricity. A community development organization, on the other hand, might be well-suited to train local entrepreneurs on productive uses of energy but lack the necessary expertise to train mini-grid operators.

Mini-grid developers might need to find partners to provide capacity building. Possible capacity-building providers include donor agencies, international development organizations, local NGOs, government agencies, community groups and private companies. Sources of training and capacity-building vary by region and type of mini-grid project.

Relevant Case Studies

Biomass Gasification in India. Decentralized Energy Systems of India (DESI Power), a nonprofit organization, is helping communities harness electricity for economic activities. Working closely with local communities, the organization installs biomass gasification mini-grid systems and promotes productive uses of energy. As part of its mini-grid projects, DESI Power builds the capacity of local communities in rural India.

Hydropowered Mini-Grids in Nepal. Using a subsidy program, Nepal’s Alternative Energy Promotion Center (AEPC) has played a critical role building capacity in micro-hydro development. AEPC has helped develop more than 2,000 hydro-powered mini-grids nationwide, providing 25 MW of electricity to 1.5 million people. AEPC was created by the Government of Nepal as part of its national rural electrification strategy.

Rental Solar Power Systems in Tanzania. In rural Tanzania, Redavia Rental Solar Power rents preassembled solar PV systems to local operators. Local entrepreneurs use the easy-to-deploy systems to hybridize traditional diesel-powered mini-grids, generating electricity for both household and industrial use. To build local capacity, Redavia Rental Solar Power has created an academy to train local solar technicians.

Resources

Greacen, C. et al. (2017). Mini-grids and the arrival of the national grid: Case studies from Sri Lanka and Indonesia.
This presentation highlights case studies of mini-grid development in Cambodia, Indonesia and Sri Lanka.

International Renewable Energy Agency (2012). Capacity Development Needs Diagnostics for Renewable Energy: Tools for Capacity Needs Assessment in Renewable Energy Sector Particularly in the Wind and Solar Sector. Handbook and Toolbox.
This set of tools provides guidance for national and local-level capacity-building to promote renewable energy systems, particularly wind and solar energy.

USAID. E3 Bureau Capacity Development Assessment: From capacity development to sustainable development (2016).
This report contains the main findings, conclusions and recommendations of the E3 Bureau’s assessment. It identifies good practices for capacity development and includes case studies of E3 or USAID mission-funded activities with major capacity development components, summary of external expert interviews, and discussion of CD approaches and indicators.