National child project under the GEF Africa Mini-grids Program (AMP)

About the Project

As part of the UNDP-supported, GEF-financed Africa Mini-grids Program (AMP), the AMP in Somalia seeks to “support access to clean energy by increasing the financial viability, and promoting scaled up commercial investment, in low carbon mini-grids in Somalia, with a focus on cost reduction levers and innovative business models”. The baseline situation is characterized by a low electrification rate (35%), the lack of electricity grid infrastructure, and the predominance of and reliance on diesel mini-grid systems, owned and operated by private Electricity Service Providers (ESPs), charging remarkably high tariffs. The project strategy corresponds to the unique nature of the energy sector in Somalia, and the AMP’s concentration on clean energy, by focusing on digital transformation and institutionalization of ongoing initiatives to expand the adoption of solar PV technologies, and promote hybridization of existing diesel minigrid systems as a financially viable path to driving down tariffs and reducing GHG emissions in Somalia.

Project Status	Ongoing
Project Duration	January 2022 - November 2026
Total Project Budget	$ USD 4 million
Focus Areas	Resilience and Climate Change
Contributing Partners	Global Environment Facility (GEF)
Implementing Partners	Ministry of Energy and Water Resources (MoEWR) in Mogadishu, Ministry of Energy and Minerals (MOEM) in Hargeisa, Energy Regulatory Commission (ERC), Puntland State Authority for Water, Energy, and Natural Resources (PSAWEN) in Garowe, Somalia Bureau of Standards (SBS), Somaliland Quality Control Commission (SQCC)

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Our key initiatives and approaches include:

Stakeholder ownership in a national mini-grid delivery model is advanced, and appropriate policies and regulations are adopted to facilitate investment in low-carbon mini-grids.
Innovative business models based on cost reduction operationalized, with strengthened private sector participation in low-carbon mini grid development.
Financial sector actors are ready to invest in a pipeline of low-carbon mini-grids and concessional financial mechanisms are in place to incentivize scaled-up investment.
Digital and data are mainstreamed, across stakeholders, into local mini-grid market development. Increased knowledge, awareness and network opportunities in the mini-grid market and among stakeholders, including benefitting from linkages to international good practice.

Project Objectives

Supporting access to clean energy by increasing the financial viability, and promoting scaled-up commercial investment, in low carbon mini grids in Somalia, with a focus on cost reduction levers and innovative business models.
Strengthen the regulatory and policy environment to operationalize existing energy laws and policies and support inclusive mini-grid delivery models that promote private sector investment.
Foster digital transformation in the energy sector, including tools for site selection, tariff calculation, remote monitoring, and performance tracking, to increase transparency and efficiency.
Build institutional and technical capacity of public authorities, regulatory bodies, and energy service providers (ESPs) to design, operate, and manage mini-grid systems.
Mainstream gender equality and social inclusion, ensuring equitable participation in energy access initiatives and addressing the unique energy needs of women, youth, and minority groups.
Generate and disseminate knowledge on mini-grid performance, cost-efficiency, and social impact through effective monitoring, evaluation, and participation in regional Communities of Practice.

Key Achievements

Supported the development of the National Mini-grid Policy and Regulations
Digital Readiness Assessment (DRA) and Digital Strategy for the mini-grid sector developed
Strengthened Somalia’s electricity regulation by supporting licensing and tariff frameworks and building NEA capacity, enabling a unified licensing system, licensing 20+ ESPs, and improved design of cost-reflective tariffs for sustainable, bankable mini-grids.
National consultative dialogues were held on the minigrid delivery model to enable minigrid development and a fully private sector model was adopted.
A comprehensive minigrid techno-economic analysis on Derisking Renewable Energy Investment (DREI) analysis was conducted to inform investment and policy decisions.
A dedicated DREI technical working group was established to implement the recommendations and trained on DREI methodology.
Conducted assessment on institutional setup for rural electrification, resulting in the identification of targeted capacity building on technical, managerial, and regulatory issues.