Nigeria’s mini-grid market is a major target for developers not just because of the size of its growth opportunities but because of its robust regulatory environment, a new report released by the African Solar Industry Association (AFSIA) has said.
“Nigeria is a hot destination for mini-grid developers as the Federal Government and its international partners are betting big on major projects to increase electricity access in the country,” the report released on March 7 said.
The AFSIA report which is also the first annual African Solar Energy 2021 outlook noted that more than “100 mini-grids are already in operation or under construction in the country, and another 300 are said to be under development.”
In addition to the enthusiasm for mini-grid and the solution they will offer for rural electrification, the report also explained the growing attraction for Development Finance Institution (DFI) financing which are increasingly being mobilised for such projects, with the objective of unlocking private capital to join the effort.
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“The World Bank is one of the main supporters of mini-grid development across the continent, being the primary financier of at least 60percent mini-grid programs currently in place across Africa,” AFSIA report noted.
Nigeria, seen as the largest potential market for mini-grid in West Africa, has received at least $374 million in the past ten years from international donors for mini-grid development.
Most developers are already putting in place strategies to leverage such opportunities in 2021. For instance, the Rural Electrification Agency (REA) signed mini-grid development agreements with two developers on February 3 for the electrification of five communities.
The development is a milestone towards energising over five million Nigerians with clean, safe, reliable and affordable electricity through mini-grid by 2021.
According to a statement from REA, “this process serves a critical milestone towards the deployment of energy infrastructure in Makami community, Kaduna State; Obadore community, Ondo State; Ode-Omi community, Ogun State; Ajegunle community and Sule Abapanu and Bondo Clusters in Edo State.”
The developers, AcobLimited and Solar Philippines signed the agreement under the Performance-Based Grant (PBG) mini-grid component of the Nigeria Electrification Project (NEP) funded by the World Bank and African Development Bank.
Also in February 2021, enewvia Energy Corporation and PowerGen Renewable Energy received PBG from REA for the electrification of several localities in the northern part of Nigeria.
The PBG will enhance the electrification of the villages of Dacitagi, Dukugi, Sa’Achi Nku, Ebangi, Sosa, Gbade, Kpange, Jikanegi and Lagun in Niger State.
“The signing of the PBG agreement enables NEP, the Nigerian government, REA and the World Bank to take another step towards the electrification of Nigeria,” REA said in a statement.
The NEP is a Federal Government initiative that is private sector-driven. This initiative seeks to provide electricity access to households, micro, small and medium enterprises in off-grid communities across the country through renewable power sources.
The PBG program aims to close the viability gap for mini-grids developed on a spontaneous basis. Grants of $350/connection are available on a first-come-first-serve basis, with a minimum total grant request of $10,000 per mini-grid.
For most stakeholders, projects like this are very important as it is virtually impossible for the national grid to cover every geographical point within Nigeria.
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