MCC should consider alternative business arrangements or explicit subsidies up front to ensure full cycle cost-recovery for off-grid renewable energy projects. Only one grantee was able to secure a tariff that could meet cost recovery. Therefore, revenues from electricity sales were barely covering their cash costs and may not generate enough revenue to cover the costs of the next replacement cycle. The evaluation findings indicated that subsidies or other funding should have been secured up front and as part of the project feasibility studies and structuring prior to committing MCC funding. Alternatively, an independent power producer agreement with the national electricity utility could have been a pre-condition of investment.
Lesson Learned