Nigeria’s mini-grid initiative to create $9.2bn market opportunities

A new report has shown that the development of off-grid power alternatives to complement the grid in Nigeria will create a $9.2 billion a year market opportunity for mini-grids and solar home systems.

The report titled: “Minigrids in Nigeria: A Major Investment Opportunity”, an independent assessment of the Nigerian mini-grid market, was the outcome of a partnership between Rural Electrification Agency (REA), the World Bank (Energy Team) and Rocky Mountain Institute (RMI).

The REA is tasked with developing the Nigerian off-grid power market.

The agency created the Off-Grid Electrification Strategy as part of the Power Sector Recovery Programme (PSRP). The strategy’s primary objective was to increase electricity access to rural and under-served clusters.

The PSRP is a series of policy actions, operational, governance and financial interventions to be implemented by the Federal Government over the next five years aimed at to restoring the financial viability of Nigeria’s power sector and improve its transparency and service delivery.

This will save $4.4 billion yearly for homes and businesses, the report said.

• Meter supply to electricity consumers will get better ―Fashola

The report described the country’s power generation as “poor quality, noisy, and polluting.” It noted that this has led to several of the country’s commercially viable businesses being powered through expensive sources of power generation.

The report added that a significant amount of the economy is powered largely by small-scale generators (10–15 GW) with almost 50 per cent of the population having limited or no access to the grid. Consequently, there are high densities of power use, large latent demand, and a strong willingness to switch to more-effective alternatives.

“Getting off-grid solutions to scale and commercial viability in Nigeria will unlock an enormous market opportunity in Sub-Saharan Africa across 350 million people in countries with smaller demand and/or less-robust economies,” the report said.

The initiative further seeks to resolve consumer complaints, reduce losses, energy theft, and reset the Nigerian electricity supply industry for future growth. The Federal Government developed the PSRP in collaboration with the World Bank Group.