February 14, 2017

IFC Benchmarking of DESCO Mini-Grids

As part of its market development work in Tanzania, in mid-2016 IFC carried out a benchmarking exercise of twenty distributed energy services companies (DESCOs) using mini-grid technologies. The objective of this effort was to undertake a quantitative analysis “from the ground”, with a view to helping developers refine approaches to serving the market; increasing investors’ understanding of the nascent sector; and providing guidance to policy-makers and development partners on where greater support is needed.

The full report can be found at “Operational and Financial Performance of Mini-grid DESCOs: Findings and Insights from Pioneer Benchmarking of this Emerging Sector“.  The aim of this effort was to take a first step in helping lenders and investors better assess the bankability of mini-grid DESCOs by:

• Developing a set of standardized metrics (financial and other) against which mini-grid DESCOs can be assessed

• Providing indicative ranges and/or thresholds within which performance against these metrics should ideally fall

• Sharing an initial analysis of the current performance of a selection of mini-grid DESCOs along these dimensions.

The analysis therefore centers on understanding each step of mini-grid DESCOs’ operational value chains to try and “unpack” areas of strength and weakness, and contribute to objectively addressing these concerns.

This is a significant attempt to put numbers behind what have to date been largely anecdotal discussions on the potential for mini-grid DESCOs to be an important part of the off-grid solution, helping to close the energy access gap.  While there are inevitably some limitations in this analysis, this report can provide a useful lay-of-the-land. IFC would welcome any feedback, especially as they expect to repeat the exercise in mid-2017, to follow how the market is evolving; add new companies and further segment DESCOs based on specific business models; and deepen the analysis of current operational and financial performance.
Contact at IFC: Pepukaye Bardouille <>

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