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International

Report/Paper

Reliable and Affordable Electricity for Nigeria: Growing the Minigrid Market

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Today in Nigeria 65 percent of the population—over 100 million people—does not have access to reliable electricity. The situation is even more dire in rural areas, where only 36 percent of inhabitants have access to a centralized power source. While demand for rural electrification is increasing, distribution companies are unable to provide sufficient power to rural areas due to low generation capacity and underdeveloped transmission and distribution networks. The market is ripe for rural electrification, and minigrids offer a cost-effective opportunity to do just that.
Minigrids offer an innovative yet practical solution to rural electrification challenges. They can circumvent many of the problems with electricity from the centralized grid, while providing cost-effective power. Today, tens of thousands of communities in remote regions of Nigeria can be cost-effectively served by minigrids while providing investors a good return on investment.
In the Minigrid Investment Report, we highlight key recommendations through which different stakeholders can take action to promote market development.
Key recommendations for investors and donor partners include:
  • Support efforts to increase affordability and viability of finance
  • Provide partial grants and operational subsidies to speed market growth while retaining developer ownership of systems
  • Create a minigrid finance consortium to spread the risk of minigrid investment
  • Coordinate cross-sectoral demand stimulation through agricultural and other development programs
The Minigrid Investment Report presents a clear pathway to scale minigrids in Nigeria, where the market is taking off. Innovative minigrid models are already being tested today, and with a strong business case already demonstrated, Nigeria is rapidly becoming a global hub for minigrid development.