Funding Needed to Achieve Universal Access for Households, Business, and Social Infrastructure

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Chapter 08

Key messages from the report

On current trends, OGS is estimated to electrify only 55%, or 216 million, of the 398 million people for whom OGS is the least-cost electrification solution, at a cost of USD 9 billion by 2030. Current growth trajectories in productive use of energy (PUE) and social infrastructure are also significantly lower than what is required for universal electrification.
A “universal access” scenario requires USD 21 billion to electrify all 398 million people who would be most efficiently connected via OGS, with roughly half coming from public and half from private sources.
- Public funding will need to scale up from USD 1 billion in 2025 to USD 2.1 billion per year in 2028–2030 – a significant increase from current levels.
- This would unlock a corresponding private investment of USD 1.4 billion in 2025, peaking at USD 2.7 billion in 2027.
- During this period, sales are projected to steadily increase from 1 billion systems sold in 2025 to 3.5 billion in 2027.
Only USD 2.4 billion is needed to electrify more than one million schools and healthcare facilities that require electricity.

A further USD 74 billion is needed to cover the total addressable markets for solar water pumps, cold storage solutions, and Tier 2+ OGS solutions for micro, small and medium-sized enterprises (MSMEs).
The cost of electrifying households, businesses, and social infrastructure with OGS is affordable and attractive compared to alternative development pathways:
- OGS remains the least-cost solution; mini grid or grid electricity would be significantly more expensive and take longer to implement
- The required investment is far less than current levels of expenditure on fossil fuel subsidies—which, across SSA, amounted to USD 50 billion in 2022 alone
- Electrification via OGS would deliver meaningful returns to governments from i) reduced fossil fuel subsidies as customers switch away from using generators and ii) tax revenues from improved business performance—although the estimated uplift is not included in this report due to data limitations
Governments would need only to cover around 30–40% of the total cost of universal electrification. Public funding would unlock a further 60–70% in public and private co-investment from development partners and private investors

The Cost of Accelerating Access for Households, Businesses, and Social Infrastructure

Achieving universal access requires electrifying 398 million people, over a million schools and health facilities, and the total addressable market for income-generating OGS products.

Investment needed for, and electrification realized, in “universal access” scenario

The universal access scenario will electrify 398 million people, over 750,000 schools and health facilities, and the total addressable market for income-generating OGS products.

The cost of electrifying households, businesses, and social infrastructure with OGS is affordable and attractive compared to alternative development pathways. OGS is the least-cost electrification solution for the households, businesses, farmers, and public institutions modeled—the cost of OGS electrification per household is 3.7 times lower than through grid, and 5.7 times lower than through a mini grid, as explained in Chapter 1 of the Market Trends Report. The cost of OGS electrification is also far less than current levels of expenditure on fossil fuel subsidies, which cost USD 50 billion in Sub-Saharan Africa in 2022.

Governments would most likely only need to cover around 30–40% of the total investment, since doing so would unlock around 60–70% in public and private co-investment from development partners and private investors.

For instance, Nigeria would require approximately USD 5.2 billion to close its energy access gap, with about USD 1.9 billion needed from donors and the government, primarily to address affordability challenges and provide grants. This public funding would catalyze the remaining 3.3 billion in investment, mainly from private investors through debt or equity.

Funding Needed to Provide Universal Access to Households

USD 21.3 billion—or USD 3.6 billion per year from 2025 to 2030—is needed to enable OGS to play its critical role in achieving universal household access by 2030. This is ~6 times the USD 3.5 billion invested in OGS to date.

Total funding required to provide first-time access to 398 million people, for whom OGS is the leastcost solution, using Tier 1 OGS PAYG systems (USD billions)

Explore the funding and subsidies needed for SDG 7

A combination of debt, equity, and grants are needed to achieve universal electrification. Funding is required to support OGS suppliers in accessing remote customers and consumer subsidies are needed to close the affordability gap.

Consumer subsidies are needed to cover a large affordability gap across countries. The availability of subsidies is critical to attracting private sector co-investment—grant, debt, and equity financing must all be available in parallel if OGS companies are to sustainably serve hard-to-reach populations that cannot be reached on a fully commercial basis.