Access to electricity in Sub-Saharan Africa: from an urban/rural frontier to a market frontier? A pricing analysis

Sub-Saharan Africa (SSA) occupies a special position when it comes to achieving universal access to electricity, the goal of SDG7. The rate of access has progressed significantly. However, in a business-as-usual scenario, if the combination of public (governments and national companies) and private investment were to continue at the current pace, the goal of universal access to electricity in SDG7 would not be achieved. On the one hand, this Business as Usual trajectory is based on the extension of the centralized grid, but it also benefits from an increase in territorial coverage based on decentralized technologies. By the way, minigrids of 2nd generation (diesel and hydro) and, more recently, minigrids of 3rd generation (solar power), provide access to previously unserved peri-urban and rural areas. Last but not least, solar-based standalone systems are paving the way for even the most remote areas. Inspired by the main international financial institutions, a consensus seems to be emerging to accelerate this trajectory. It is based on the massive implementation of solar minigrids, including storage capacities, whose full levelized costs have fallen rapidly and sharply. And these costs are set to fall further, not least due to the increase in load factors made possible by good-quality production and, consequently, by a steady rise in consumption. These forecasts, which have been translated into comprehensive public policy projects in some countries, most often assume that the production capacity installed via minigrids will eventually be integrated into the main grid. In SSA, access to electricity is set to increase as the power system evolves (Foster et al. 2021). While the supply side and its organization to achieve this objective are now well designed (ESMAP 2022), on the demand side the analysis remains fragile, subject to the variability of macroeconomic growth conditions (Egli et al. 2023). As the Covid 19 crisis abruptly reminded us, these conditions are a limitation of the electrification schemes envisaged. The purpose of this paper is to review the pricing conditions developed. Indeed, only tariffs that make it possible to contextualize the growth of access both in relation to the technical progress affecting supply, and in relation to the calibration of demand based on objectifiable data, and in particular the income structure of consumers in the economies concerned.