Designing a Sustainable Business Model for Solar Mini-Grids to Enhance Rural Electrification in Guinea-Bissau

Abstract

West Africa faces persistent challenges of sub-electrification, and Guinea-Bissau ranks among the least electrified countries, with a national rate of just 35.7% and rural electrification lagging at only 7%. This highlights the urgent need to accelerate access. In such contexts, solar mini-grid sustainable business models become crucial for enabling viable and inclusive electrification, particularly where established markets are absent and household incomes remain low. This thesis examines the design of a sustainable business model for solar mini-grids to enhance rural electrification in Guinea-Bissau, where the sector is still in its infancy with only four projects implemented. Drawing on the Triple Bottom Line (TBL) framework and SWOT analysis, the research evaluates the economic, social, and environmental dimensions of the solar mini-grid business model currently applied in Bissora. Findings show that, while projected revenues (€30,696) initially suggest a positive margin over annual costs (€23,976), including replacement obligations (€32,032 annually) reveals a structural deficit of €25,312 per year, rendering the model financially unsustainable. On the social side, the model falls short in addressing community needs, as frequent power outages, exclusion of potential users, and limited support for productive use undermine the developmental benefits of electricity access. Environmentally, the mini-grid contributes to emission reduction by displacing diesel but faces setbacks from ongoing deforestation pressures and the absence of equipment recycling or end-of-life strategies. To address these gaps, the thesis proposes a sustainable business model based on the Triple Layered Business Model Canvas (TLBMC). The model integrates reliable electricity provision, productive-use promotion, community engagement, and material lifecycle management. It is supported by strategic partnerships, circular economy practices, and inclusive financing mechanisms. Policy recommendations emphasize the importance of fostering multi-sectoral partnerships, mobilizing climate finance, and adopting adaptive planning to enable future grid integration.