Open Source Project #4: AgriGrid — a business model concept explored by ANKA Madagascar
EnAccess is excited to share our fourth project, “AgriGrid”. AgriGrid explores a new model for electrifying rural communities in Africa, which at the same time aims to increase the incomes of households and businesses in those communities. This R&D project was led by ANKA Madagascar; a leading developer of solar PV/diesel mini-grids in Madagascar.
About this project
Mini-grids are a major component of the energy access solution. But, for reasons ranging from basic unit economics to the readiness of national policy and regulatory environments, mini-grid businesses remain “challenging” investments.
So the AgriGrid concept seems to re-imagine the thinking behind what a mini-grid businesses is — rather than being a seller-of-energy the AgriGrid concept positions mini-grids as a way to create rural wealth. Why? Because without economic wealth (wealth being a relative word, as many mini-grid customers make between $1-$4 per day on average), business stays stagnant for the mini-grid company. When business stagnates — like we’ve seen happen many times — all of the good things that electricity can do for a community doesn’t happen. It’s a common “open secret” in our sector that very, very few mini-grid companies in Africa have managed to scale up, expand widely, and become profitable. Many are in debt. But the thing is, mini-grids also work really, really well for the communities they serve and there’s enormous potential there, so it’s not time to say “ok, that’s not working, let’s try something else.” It is simply time to innovate.
That is exactly what ANKA Madagascar decided to do: try something new, make the mini-grid company become something different and improved. The AgriGrid concept combines two very different types of business into one — it imagines an agribusiness that can generate long-term agricultural income for a community, and a mini-grid business that can power agricultural infrastructure as well as households, micro-enterprises, and community infrastructure. Creating wealth for communities through agriculture helps mini-grid companies while increasing the positive developmental impacts of mini-grids.
To be honest, we were skeptical of this idea. In some ways it seems like a no-brainer, and we are aware that others are thinking of combining these two businesses as well… but it also made us ask a lot of follow-up questions. Like how many mini-grid companies really have the expertise to break into the agricultural business? And is there really profit to be found there? Could something like this really scale? Is this more about improving quality of life on the ground or is this really something that could make mini-grids more profitable? Or both? (and isn’t that always the dream!)
Well, it seems like there were enough interesting unknowns that we wanted to find out some answers. ANKA Madagascar got the green light to set about finding a potential agribusiness to develop, assess its potential, and explore what its implementation alongside planned mini-grids would mean in practice. And we’ve open-sourced all the findings to allow others to repeat the process in a structured, easy-to-use way. This “building block” will allow others to assess the viability and quality of a business model idea without having to re-invent the wheel, and this idea is at the very core of EnAccess.
On the AgriGrid project page, you’ll find a concept note explaining the model, a toolkit outlining how to research and assess an AgriGrid opportunity, a lessons learned document explaining difficulties to look out for along the way, and more. You can also listen to the podcast interview I recorded with Camille-André Bataille (CEO of ANKA Madagascar) — make sure you’ve subscribed to #OpenEnergyAccess so you can be alerted when the episode is published.
A huge thanks to ANKA Madagascar for bringing this concept to life and for sharing lessons from their early R&D journey. We’re excited to watch the AgriGrid model develop!