Technical Due Diligence for Mini-Grids: A Zambia Case Study

TTA delivered technical due diligence and Lender’s Technical Advisory services for the Facility for Energy Inclusion (FEI) across two phases of a USD 7.5 million financing transaction, supporting the construction of 60 solar mini-grids and connecting over 40,000 people to electricity in rural Zambia.

Supporting FEI across two phases of a landmark $7.5 million mini-grid financing transaction under the EU-backed IAEREP programme.

Background — Financing 60 Solar Mini-Grids in Zambia

Access to electricity remains one of the most critical development challenges in Sub-Saharan Africa. In Zambia, vast rural populations remain unserved by the national grid, leaving households, health centres, schools and small businesses without reliable power. Mini-grids (small-scale, decentralised electricity systems powered by renewable energies) have emerged as the most viable and cost-effective solution to close this gap.

Under the IAEREP programme, co-financed by the European Union (EU) through the 11th European Development Fund, ENGIE Energy Access (operating as MySol Grid Zambia, and subsequently acquired by Ignite Energy Access in 2025) sought to construct, own, operate and maintain 60 solar mini-grids across five rural regions of Zambia. The EU had previously allocated EUR 6 million in grants; the remaining USD 7.5 million of senior debt was committed by the Facility for Energy Inclusion (FEI), managed by Cygnum Capital.

To protect the interests of the lender and validate the technical credibility of the investment, FEI engaged TTA as its independent Lender’s Technical Advisor (LTA) to conduct a full Technical Due Diligence (TDD) process spanning two phases: Pre-Financial Close (Phase 1) and Post-Financial Close (Phase 2).

What Is Technical Due Diligence in Mini-Grid Financing?

When a lender or investor commits capital to an energy infrastructure project, they need confidence that the technical foundations of that project are sound. Technical Due Diligence (TDD) is the structured process through which an independent technical expert, acting on behalf of the investor, investigates, validates and reports on all aspects of a project that could affect its financial and operational performance.

What a Comprehensive TDD Examines

For renewable energy mini-grids, TDD is particularly important because these are capital-intensive, long-term assets serving remote communities where operational failures are costly and difficult to remedy. A comprehensive TDD examines not only the engineering design, but also the developer’s capacity, cost assumptions, operational methodology, regulatory compliance, community engagement approach and risk profile.

TTA’s Collaborative TDD Methodology

In TTA’s methodology, TDD is not a box-ticking exercise. It is a holistic, collaborative process. Our role as Technical Advisor is to work alongside all parties (the lender, the sponsor and other stakeholders) to produce a clear, evidence-based assessment that supports informed decision-making and helps identify risks early, before they become problems. Where risks are identified, we propose practical mitigation measures and track their implementation. For projects of this scale, TDD typically spans multiple phases aligned with the project lifecycle.

What Does a Lender’s Technical Advisor (LTA) Do?

A Lender’s Technical Advisor (LTA), also referred to as an independent engineer or lender’s engineer, is an independent technical expert appointed to protect the lender’s interests throughout the lifecycle of an energy infrastructure project. Where the sponsor’s own engineers work to advance the project, the LTA works on behalf of the financier: assessing whether the project is technically sound, identifying risks that could affect financial performance, and verifying that construction and commissioning meet the standards agreed at financial close.

The LTA’s role spans the key phases of a project finance transaction: technical due diligence ahead of financial close, review of final engineering designs during construction, on-site inspection and commissioning verification, and the issuance of LTA certificates that authorise loan disbursements. In TTA’s approach, the LTA function is not purely a monitoring role, it is a collaborative one, working alongside the sponsor to resolve issues and keep the project on track.

What Is an LTA Certificate?

An LTA certificate is a formal document issued by the Lender’s Technical Advisor upon satisfactory completion of construction and commissioning at each project site. It confirms that the works meet the technical standards agreed at financial close and authorises the disbursement of funds from the lender to the sponsor. The LTA certificate is the technical gateway that ensures lenders release capital only when milestones have been independently verified.

Phase 1 — Pre-Financial Close Technical Due Diligence

TTA’s first engagement began ahead of financial closing, when FEI required an independent technical opinion to underpin its lending decision. The scope of Phase 1 was broad and covered ENGIE Energy Access’s overall methodology, technical approach, and readiness to execute the 60-village programme.

Scope of the Phase 1 Assessment

• Sponsor capacity and track record: organisational structure, technical team, operational procedures and experience in comparable mini-grid programmes.
• Project design and technology selection: solar-plus-storage configurations, sizing assumptions and alignment with local demand projections.
• Financial and commercial assumptions: revenue models, customer acquisition strategies, tariff structures and long-term financial sustainability.
• Site selection and regional conditions: resource availability, infrastructure, logistics and community demand across the five target regions.
• Risk identification and mitigation: mapping of technical, operational and environmental risks, with recommended mitigation for each.
• Regulatory and permitting context: Zambian energy regulations, licensing requirements and compliance status.

Outcome — Reaching Financial Close

The Phase 1 assignment culminated in a comprehensive TDD report and executive summary, presenting findings, impacts, key risks and critical action items. This gave FEI and Cygnum Capital the technical foundation needed to proceed with the $7.5 million debt financing, formally signed in June 2023 (announcement), and flagged as a successful transaction in the IEA’s report on Financing Electricity Access in Africa.

Phase 2 — Lender’s Technical Advisor Services After Financial Close

Following financial close, TTA continued as Lender’s Technical Advisor (LTA) to monitor the construction and commissioning of the mini-grids and protect the lender’s interests throughout implementation. Phase 2 focused initially on 15 priority villages, covering the full arc from final design to commissioning (details).

Key Phase 2 Deliverables

• Technical review at final design stage: review of final engineering designs and construction drawings to verify compliance with approved plans and standards.
• Procedures and standards assessment: evaluation of the sponsor’s QHSE procedures, construction methodologies and management systems.
• Construction schedule review: analysis of timelines, resource planning and milestone sequencing to identify potential delays.
• Final configuration and commissioning review: review of installed configurations, commissioning reports, testing results and performance data per site.
• LTA certificate issuance: issuing the LTA certificate on satisfactory completion of each site, authorising disbursement of funds from FEI to the sponsor.

The LTA Certificate and Loan Disbursement

The LTA certificate is a critical milestone in project finance transactions: it serves as the technical gateway that triggers loan disbursements, ensuring lenders release funds only when construction and commissioning have met agreed standards. TTA’s rigorous but pragmatic approach enabled the programme to progress efficiently while maintaining the quality standards required by the lender.

Results & Value Delivered for the Lender

TTA’s involvement across both phases provided a range of tangible benefits to FEI, Cygnum Capital and the broader project ecosystem:

• Informed lending decision: the Phase 1 TDD report gave FEI the confidence to commit $7.5 million in debt financing, its inaugural transaction in the mini-grid sector.
• Risk reduction: identifying technical and operational risks early and recommending mitigations reduced the likelihood of costly delays or failures.
• Disbursement protection: Phase 2 LTA certification tied loan disbursements to verified construction progress, protecting the lender’s capital.
• Sponsor accountability: ongoing technical oversight encouraged high construction standards and transparent reporting.
• Development impact: the programme is expected to connect more than 40,000 people across 60 rural villages.

Why Choose TTA for Energy Access Due Diligence?

TTA brings over 40 years of experience in distributed renewable energy and energy access, with particular depth in mini-grid projects across Africa, Asia and the Pacific. Our Technical Due Diligence and Lender’s Technical Advisory services combine rigorous engineering assessment with a practical understanding of the financial, regulatory and operational realities that determine whether energy access projects succeed, with references in markets including Nigeria, DR Congo and Zambia.

We act as genuine partners to our clients: independent, thorough and objective in our assessments, but collaborative and solution-focused in how we work. For complex, multi-phase transactions such as the Zambia programme, this approach makes the difference between a due diligence process that slows a deal down and one that builds the confidence needed to close it.

Engage TTA as your Lender’s Technical Advisor. Contact our team at www.ttaenergy.com to discuss your project.

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