New Analysis Finds $9.2B Off-Grid Electrification Opportunity in Nigeria Presented at Africa Action Learning Event on Scaling Minigrids

Abuja, Nigeria—December 11, 2017– A new collaboration between the Nigerian Rural Electrification Agency (REA), the World Bank and the Rocky Mountain Institute (RMI) has found that Nigeria is the nation that could unlock the nascent minigrid market in Africa. The joint analysis found that developing off-grid alternatives to complement the grid creates a $9.2B/year (N3.2T) market opportunity for minigrids and solar home systems that will save $4.4B/year (N1.5B) for Nigerian homes and businesses.

These findings were discussed at the five-day ”Upscaling Minigrids for Low Cost and Timely Access to Electricity Services” summit successfully hosted by the Nigerian Rural Electrification Agency (REA) in conjunction with the World Bank Energy Sector Management Assistance Program (ESMAP), Climate Investment Funds (CIF), and UK Department for International Development (DFID). The high-level forum was designed to push action on scaling up minigrids to help countries reach universal energy access by 2030, and was the fourth in a series of successful events on minigrids organized by the global community in the past two years. This is the first time this event was held in West Africa and was a clear indication of the commitment of the Federal Government of Nigeria to supporting investment in off-grid electrification initiatives and the vast investment opportunities in Nigeria for the development of minigrids and roll out of solar home systems which have a combined potential market of $9.2 billion annually.

Getting off-grid solutions to scale and commercial viability in Nigeria has the potential to unlock an enormous market opportunity in sub-Saharan Africa, across 350 million people in countries with smaller demand and/or less-robust economies. A common barrier to minigrid market growth is investors viewing the market as being too risky, therefore gaining access to project financing is rare and the market rate debt is expensive. However, at the event it was clear that many stakeholders agree Nigeria is positioned well to not only address market barriers, but also to showcase to other nations that minigrids are commercially viable.

The event brought together more than 600 global participants from over 50 countries which included country governments, global organizations, the private sector, academia, NGOs, media, and others to discuss ways to facilitate investment in the sector as well as accelerate the deployment of minigrid systems. It aims at interlocking with ongoing minigrids, upscaling initiatives globally as well as ongoing activities in Nigeria. The summit ended with a site visit to 37.8 kW Bisanti solar minigrid, constructed by GVE Projects Limited in collaboration with the Bank of Industry (BOI), United Nations Development Program (UNDP), and Institute of Electrical Electronics Engineers (IEEE) located in Katcha Local Government Area of Niger State, Nigeria.

“I see only opportunities in Nigeria and not challenges and policies have been developed to help entrepreneurs fast track energy access for underserved populations.” said Babatunde Raji Fashola SAN, Honourable Minister of Power, Works and Housing. “He also commended the instrumental partnership of the World Bank in developing the power sector and the Rural Electrification Agency for developing data to help private developers reach the communities they need.” 

“The aim of Rural Electrification Agency is to roll out 10,000 minigrids rapidly to support underserved communities in Nigeria and with the current regulatory landscape, Nigeria is the best market to do minigrids.” said Damilola Ogunbiyi, Managing Director, Nigerian Rural Electrification Agency. “The off-grid will be treated as importantly as the on-grid in Nigeria.”. She immensely thanked the World Bank, Rockefeller Foundation, and the Rocky Mountain Institute for their incredible support and partnership.

“In Nigeria, 80 million people lack access to electricity and millions suffer from unreliable service. The World Bank and the Government of Nigeria are working together to make mini grids a viable solution to bridge a large share of the electrification gap in the country,” said Mr. Mac Cosgrove-Davies, Global Lead Energy, Access, World Bank. “Rural Electrification Agency will be the implementing agency for the fund”.

“This week’s minigrid summit in Nigeria has reinforced that Nigeria is one of the premier places in the world for off-grid electrification” said Stephen Doig, Managing Director, Sustainable Energy for Economic Development (SEED) Program, Rocky Mountain Institute. “The large revenue opportunity, supportive government, and dynamic entrepreneurial environment unite to make Nigeria the ideal location to bring these technologies to scale, prove viable business models, meet the needs of millions of people, all while reducing greenhouse gas emissions.”

“It is one of the most engaged and richly packed events organized ever in West Africa” said Mr. Ifeanyi Odoh, Regional Sales Manager, Solar Business, Anglophone West Africa, Schneider Electric.

“Our joy has no bound because the mini grid solar light will help our children to read books at night, lighting the community at night and use of our refrigerators, television as well as so many other things” Said Alhaji Usman Abdulsalam, Sarkin Masaran Nupe, Head of Bisanti Community, Niger State.

About The Rural Electrification Agency

The Rural Electrification Agency (REA) was set up by the Federal Government of Nigeria (FGN) with the primary objective of increasing electricity access to rural and underserved communities and has developed an off-grid electrification strategy to support mini grids and other off grid solutions to support the Federal Government’s policy of incremental growth.

More information on REA can be found at www.rea.gov.ng or follow REA on Twitter @realREANigeria and Facebook: RURAL ELECTRIFICATION AGENCY