LocationsCreating greater confidence for solar mini-grid investment in Mozambique
August 28, 2026
"Mozambique has a historic opportunity to transform its vast energy potential into greater access, investment, jobs, and inclusive economic development. Solar mini grids can play an important role in this transformation, but this requires an enabling investment environment" – Eunice Mucache, Head of the Environment and Climate Resilience Unit at UNDP Mozambique.
Recommendations from the DREI Lab were presented for policy validation on 20 August in Maputo.
Mozambique is taking important steps to create a more predictable and attractive environment for investment in renewable energy. Supporting this effort, the United Nations Development Programme (UNDP) in Mozambique has completed the implementation of the DREI Lab (Derisking Renewable Energy Investment), focusing specifically on the country’s solar mini-grid sector.
The ten-week process brought together public institutions and private sector stakeholders to identify practical measures that can help reduce investment risks and strengthen investor confidence. Through a collaborative process, participants developed strategic recommendations on policies, tariffs and incentives aimed at creating greater certainty for investors and supporting the expansion of solar mini-grids in Mozambique.
The recommendations were presented for policy validation on 20 August in Maputo, following consultations involving institutions including the Ministry of Mineral Resources and Energy (MIREME), the National Energy Fund (FUNAE), the Energy Regulatory Authority (ARENE), the Ministry of Agriculture, Environment and Fisheries, the Ministry of Economy, and the Ministry of Finance. The consultations also brought private sector perspectives into the assessment of potential risk-mitigation instruments.
The DREI Lab represents a core phase of the DREI 2.0 framework and forms part of the SEIA Project (Sustainable Energy Investment Accelerator), a global UNDP initiative supporting faster, more inclusive and equitable energy transitions. SEIA works to strengthen investment environments, facilitate access to finance and develop a pipeline of clean energy projects that are ready for investment.
By bringing government, regulators and the private sector around the same table, the DREI Lab is helping to identify the conditions needed to unlock greater investment in solar mini-grids – an important step towards expanding access to clean, reliable and sustainable energy in Mozambique.
Eunice Mucache, Head of the Environment and Climate Resilience Unit at UNDP Mozambique
The impact of solar mini grids
For communities far from the national electricity grid, solar mini-grids can be more than a source of power—they can be a catalyst for local development. By providing reliable electricity, they can help businesses grow, improve health and education services, create jobs and open new opportunities for communities to build stronger local economies.
This potential is particularly significant in Mozambique, where around 60% of the population still lacks access to electricity, with rural communities among those facing the greatest challenges. Expanding access to clean and reliable energy can therefore play an important role in improving livelihoods, strengthening essential services and creating conditions for sustainable economic activity in underserved areas.
"It is precisely for this reason that, through DREI 2.0, implemented within the framework of the SEIA Project, UNDP seeks to help create the conditions necessary to reduce risks and make these investments more attractive and bankable for the private sector," said Eunice Mucache.
Stakeholder's equipped to serve as focal points within their respective institutions, helping to carry the knowledge forward and support efforts to create a more enabling and predictable environment for private investment.
From technical analysis to an Action Plan
Over the course of three months, from June to August, the DREI Lab participants identified the main risks that affect private investment in solar mini grids, discussed relevant derisking instruments to mitigate these risks, participated in capacity building sessions on finance and public policy, and used the DREI 2.0 Levelized Cost of Energy (LCOE) model to assess the financial implications of risk mitigation measures for investors, the public sector, and end users, translating complex financial concepts into practical policy insights.
The validation workshop marked an important step towards turning the DREI Lab’s recommendations into concrete action. Senior representatives of the Government of Mozambique, including MIREME and other relevant ministries, joined international partners and private sector representatives for constructive discussions on the proposed measures.
The exchange helped build a shared understanding of the priorities and practical steps needed to move forward, laying the foundation for the DREI Lab Action Plan for Mozambique and strengthening collaboration among the institutions and stakeholders involved.
"For the Government, electrification through mini grids represents an opportunity not only to bring energy to communities that remain beyond the reach of the national grid, but also to stimulate local economic development and mobilize private capital for sustainable development. For this reason, we need to understand risk perception, quantify it, and establish mechanisms to manage it," said Ortigio Nhanombe, Deputy National Director of Energy at MIREME.
Ortigio Nhanombe, Deputy National Director of Energy at MIREME
Building lasting capacity for the future
The DREI Lab was not only about producing technical recommendations - it also aimed to strengthen the capacity of institutions to sustain and build on this work over the long term. Through three intensive modules, participants developed a stronger understanding of how private investors assess opportunities, how to model the financial viability of mini-grid projects, and how different instruments can help reduce investment risks.
The programme also equipped participants to serve as focal points within their respective institutions, helping to carry the knowledge forward and support efforts to create a more enabling and predictable environment for private investment.
With this phase completed, the DREI Lab concludes with a comprehensive study on barriers to private investment in mini grids, a recommended action plan for public derisking instruments, and a cohort of trained public sector professionals equipped to support implementation.
Senior representatives of the Government of Mozambique, including MIREME and other relevant ministries, joined international partners and private sector representatives for constructive discussions on the proposed measures.
About DREI 2.0
Derisking Renewable Energy Investment 2.0 (DREI 2.0) is UNDP’s full-service, end-to-end offering designed to help governments understand investor risks, co-create actionable solutions and develop tailored derisking strategies grounded in investor insights. DREI 2.0 delivers a dual impact: generating actionable insights to guide policy decisions and cultivating a community of public leaders equipped with a derisking mindset.
Through this combined offer, DREI 2.0 moves beyond one-off analysis. It creates a shared language of risk between the public and private sectors, increases trust and alignment, and helps institutional actors move toward policies and partnerships that are truly investment ready. It is underpinned by UNDP’s convening power, technical expertise, and broad network of partnerships across the global energy finance ecosystem.
