MINIGRID INVESTMENT REPORT SCALING THE NIGERIAN MARKET

The 2018 report by RMI and the Nigerian Economic Summit Group (NESG) analyzes the commercial minigrid market in Nigeria, identifying it as a high-potential investment opportunity to address the fact that 55% of the population lacks electricity. Through audits of ten commercial projects, the report establishes best practices in site selection, community engagement, and owner-operator business models. It outlines a regulatory environment that is generally supportive but hindered by overlapping mandates and import barriers, and proposes specific interventions across the project development, construction, and operation phases to scale the market toward a potential annual revenue of ₦2.8 trillion (US$8 billion).

• Nigeria's minigrid market represents a significant economic opportunity, with the potential for annual revenue of ₦2.8 trillion (US$8 billion). Scaling the market to 10,000 sites of 100 kW by 2023 could provide power to 14% of the population and create a ₦7 trillion (US$20 billion) investment opportunity.
• Audits of ten commercial minigrids show that tariffs typically range from ₦120 to ₦300 per kWh, with a median of ₦200 per kWh. These cost-reflective tariffs are generally lower than the cost of operating small diesel or petrol generators, which typically exceed ₦250 per kWh.
• Successful commercial minigrids typically employ an owner-operator business model, often funded by a 70:30 debt-to-equity ratio supplemented by grants. Developers report returns of 15%–20% on successful projects.
• Key operational best practices include selecting densely populated sites with high economic activity, engaging communities early and continuously, and stimulating demand through appliance financing for productive uses to balance load profiles.
• The Nigerian Electricity Regulatory Commission (NERC) Mini Grid Regulation of 2017 is a critical driver of market growth, as it simplifies permitting for systems under 100 kW and protects the right to set cost-reflective tariffs.
• Significant barriers to scaling include overlapping mandates between government agencies, inconsistent implementation of tax and duty exemptions on imports, and a lack of affordable project finance due to high commercial interest rates (often 20% or higher).
• The report identifies a 'split asset model'—where the developer owns the generation asset and a third party or government owns the distribution asset—as an innovative way to lower capital costs and risk.
• Technical opportunities for cost reduction include the adoption of standardized, modular, and containerized systems, which could reduce engineering time by one-third, installation costs by 80%, and total service costs by up to 20%.

APA

RMI (2018). MINIGRID INVESTMENT REPORT SCALING THE NIGERIAN MARKET. https://rmi.org/app/uploads/2018/08/RMI_Nigeria_Minigrid_Investment_Report_2018.pdf

Chicago

RMI. MINIGRID INVESTMENT REPORT SCALING THE NIGERIAN MARKET. 2018. https://rmi.org/app/uploads/2018/08/RMI_Nigeria_Minigrid_Investment_Report_2018.pdf.

Wikipedia

{{cite report |author=RMI |title=MINIGRID INVESTMENT REPORT SCALING THE NIGERIAN MARKET |date=2018 |url=https://rmi.org/app/uploads/2018/08/RMI_Nigeria_Minigrid_Investment_Report_2018.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2018minigrid, author = {{RMI}}, title = {{MINIGRID INVESTMENT REPORT SCALING THE NIGERIAN MARKET}}, institution = {RMI}, year = {2018}, url = {https://rmi.org/app/uploads/2018/08/RMI_Nigeria_Minigrid_Investment_Report_2018.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }