The Nigerian Electricity Regulatory Commission (NERC) has announced the formal adoption and release of the African Forum for Utility Regulators (AFUR) mini-grid Tariff Tool.
The tool, developed in collaboration with AFUR and key stakeholders, enhances the process of determining cost-reflective tariffs for mini-grid projects to ensure fair and efficient pricing.
Effective 16 December 2024, mini-grid developers will be required to use the tool to file permit applications at the Commission.
According to NERC, the tool supports implementing the amended Mini-Grid Regulations 2023 by introducing new features such as Portfolio Applications, which allow developers to register multiple mini-grid sites under a single application.
“This simplifies processes, fosters efficient regulatory oversight, and benefits from economies of scale, helping to reduce end-user tariffs for mini-grid projects.
“Furthermore, the AFUR mini-grid tariff tool is expected to be rolled out across 30 African countries in the coming years, bringing regulatory consistency to the mini-grid subsector and making it easier for project developers to operate across jurisdictions,” NERC said.
AFUR covers regulatory challenges in the energy, telecommunications, transportation, and water and sanitation industries, with a focus on cross-sectoral concerns.
AFUR has been collaborating with key stakeholders in the mini-grid market since April 2021.
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The Forum’s purpose is to foster cooperation among utility regulators throughout Africa, thereby boosting the continent’s growth and socioeconomic advancement. Further, it aims to encourage the evolution of effective utility regulation, hence advancing Africa’s infrastructure development.
AFUR has been collaborating with key stakeholders in the mini-grid market since April 2021.
The five early adopters (Sierra Leone, Ghana, Nigeria, Burkina Faso, and Zimbabwe) were chosen from a pool of AFUR members following a thorough assessment process based on criteria such as the number of mini-grid projects expected and already in place, the presence of regulatory frameworks governing mini-grids, and the involvement of the private sector, to name a few.
In a piece for ESI Africa in December 2023, Samuel S. Bunnya, Project Coordinator at the AFUR, stated interest in using this tariff instrument had increased since its development. He said they initially predicted that three countries would be early adopters. However, because of the growing interest,
Bunnya said some important observations were made as training on the tariff tool was conducted during the five in-country visits.
“In Nigeria, which has one of the most mature mini-grid markets on the continent, the need for mini-grids has necessitated a call for more deployment given the less-than-ideal electrification rates.
Given the country’s population, this calls into question how fast and efficiently mini-grids can be deployed.”
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