Nigeria to unlock $10 billion minigrid market


The Rocky Mountain Institute (RMI) has found that Nigeria is the nation that could unlock the nascent minigrid market in Africa.

A joint analysis released today with The World Bank and the Nigerian Rural Electrification Agency (REA) found Nigeria to be perfect for minigrid investment for the following reasons:

  • Developing off-grid alternatives to complement the grid creates a $9.2 billion per annum market opportunity for minigrids and solar home systems that will save $4.4 billion per annum for Nigerian homes and businesses.

  • There is large potential for scaling—installing 10,000 minigrids of 100 kW each can occur for 10 years and only meet 30% of anticipated demand.

  • Nigeria’s economy and strong entrepreneurism mean that millions of commercially viable businesses are powered with expensive and/or unreliable power. Consequently, there are high densities of power use, large latent demand, and a strong willingness to switch to more-effective alternatives.

The report highlights the strong support from World Bank and the Federal Government of Nigeria, working together to develop a five year Nigeria Electrification Project (NEP), which is expected to be finalised by the World Bank in April 2018 and implemented by REA. It is expected that the World Bank will contribute $350 million to the programme, with $150 million allocated to minigrids.

Minigrids developed under the NEP are expected to serve 200,000 households and 50,000 local enterprises and has nationwide scope. Early activities will take place in Niger, Plateau, Ogun, Sokoto, and Cross River states.

It is believed that the NEP will be implemented under a market-based approach—private firms are expected to develop minigrids, with subsidies from REA, and roughly 1,200 minigrids are expected to be developed under the project.

Read more about the programme and potential for minigrids by downloading the report here