AGRICULTURAL PRODUCTIVE USE STIMULATION IN NIGERIA: VALUE CHAIN & MINI-GRID FEASIBILITY STUDY

The report identifies immediate opportunities to electrify agricultural processing in Nigeria, categorizing activities into three tiers of readiness. Tier 1 activities—cassava grating, rice milling, and flour milling—are deemed immediately viable, capable of reducing mini-grid tariffs by up to 26% if all three are implemented. The study proposes the 'Facilitator Model' for Tier 1 and the 'Processing Center Model' for Tier 2 to address barriers such as lack of credit and reliable electricity. A deployment strategy is recommended to unlock commercial finance through credit guarantees and grants, with an estimated national investment of under $30 million required for Tier 1 activities.

• Three agricultural processing activities are classified as Tier 1, meaning they are immediately ready for electrification and implementation: cassava grating, rice milling, and flour milling (across several grains).
• Electrifying Tier 1 activities can significantly improve mini-grid economics; implementing any one activity can reduce tariffs by 8–14%, while electrifying all three in a community could reduce tariffs by 26%.
• For Tier 1 activities, electric processing equipment powered by mini-grids typically allows for a discounted payback period of three years or less, except for fee-for-service (FFS) rice milling, which requires fee increases to be viable.
• The study identifies five primary barriers to the scale of electrified agricultural productive use: lack of access to credit, lack of reliable electricity, lack of awareness and education, lack of market access, and lack of access to electric equipment.
• The 'Facilitator Model' is recommended for Tier 1 activities to avoid displacing existing processors; it uses a facilitator to educate processors and link them with finance providers for equipment loans.
• The 'Processing Center Model' is recommended for Tier 2 activities, where the mini-grid developer owns and operates the equipment for services not currently provided by local entrepreneurs, such as mechanical threshing.
• The total investment required to implement Tier 1 activities nationally is estimated to be under $30 million, with approximately $13.2 million from grants and $14.3 million from commercial debt.
• A proposed deployment strategy to de-risk investments involves using a credit facility, credit guarantee facility, and insurance provider to unlock loans from private financial institutions, supported by a grant facility for pre-investment and capital cost reduction.
• Gender imbalances are evident in mechanization; men are the primary operators of mechanized activities, while women predominantly handle manual tasks like fish smoking and rice parboiling.
• The study suggests a five-step roadmap for implementation: convening a cross-sectoral working group, implementing equipment pilots for Tier 1, testing business models, implementing the deployment strategy at scale, and addressing Tier 2 and 3 barriers.

APA

Santana, S., Allee, A., Meng, Z., Omonuwa, W., Sherwood, J., MK, B., & Rosi-Schumacher, K. (2020). AGRICULTURAL PRODUCTIVE USE STIMULATION IN NIGERIA: VALUE CHAIN & MINI-GRID FEASIBILITY STUDY. RMI. https://rmi.org/app/uploads/2021/01/nigeria_power_sector_program.pdf

Chicago

Santana, Scarlett, Andrew Allee, Zihe Meng, Wayne Omonuwa, James Sherwood, Balaji MK, and Kira Rosi-Schumacher. AGRICULTURAL PRODUCTIVE USE STIMULATION IN NIGERIA: VALUE CHAIN & MINI-GRID FEASIBILITY STUDY. RMI, 2020. https://rmi.org/app/uploads/2021/01/nigeria_power_sector_program.pdf.

Wikipedia

{{cite report |last1=Santana |first1=Scarlett |last2=Allee |first2=Andrew |last3=Meng |first3=Zihe |last4=Omonuwa |first4=Wayne |last5=Sherwood |first5=James |last6=MK |first6=Balaji |last7=Rosi-Schumacher |first7=Kira |title=AGRICULTURAL PRODUCTIVE USE STIMULATION IN NIGERIA: VALUE CHAIN & MINI-GRID FEASIBILITY STUDY |publisher=RMI |date=July 2020 |url=https://rmi.org/app/uploads/2021/01/nigeria_power_sector_program.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{santana2020agricultural, author = {Santana, Scarlett and Allee, Andrew and Meng, Zihe and Omonuwa, Wayne and Sherwood, James and MK, Balaji and Rosi-Schumacher, Kira}, title = {{AGRICULTURAL PRODUCTIVE USE STIMULATION IN NIGERIA: VALUE CHAIN \& MINI-GRID FEASIBILITY STUDY}}, institution = {RMI}, year = {2020}, month = jul, url = {https://rmi.org/app/uploads/2021/01/nigeria_power_sector_program.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }