Rocky Mountain Institute and the Nigerian Economic Summit Group released a report today entitled Minigrid Investment Report: Scaling the Nigerian Market, which shows how minigrids can improve business profitability and stimulate a US$20 billion investment opportunity throughout Nigeria.
Today in Nigeria only 45% of the population has access to electricity, and only 36% of the population in rural areas has access to a centralized power source. Minigrids can provide a cost-effective solution to the demand for rural electrification which could help businesses tap into a revenue opportunity of up to N2.8 trillion ($8 billion) per year.
“The Nigerian minigrid space is ready to take off, and there is a huge opportunity for investment to scale the market,” said Sachi Graber, an Associate at Rocky Mountain Institute and co-author of the study. “These minigrids could drive a significant economic change in rural Nigeria,” she added.
This research presents the following findings to show how necessary minigrids are to the future of Nigeria’s business structure:
- Scaling minigrids could create a $20 billion investment opportunity
- Over 80% of Nigerian business owners cite electrification challenges as their most significant obstacle, and minigrids could solve the most common challenges through high reliability and consistent quality
The report also provides recommended best practices for the minigrid sector, based on currently operating minigrid projects, which can ensure success from both a business and development perspective.
“The market opportunity is undeniable, and many Nigerian-based minigrid developers have demonstrated the capabilities to cost-effectively deliver reliable power to millions of households and businesses, while significantly reducing the upfront cost, lower end-user tariff and increase system utilization,” says Dr. Tayo Aduloju, a Senior Fellow, Public Policy and Institutional Governance at the Nigerian Economic Summit Group. “Investors and other development partners are invited to work with us to mobilize and unlock investments needed to reach greater scale.”
The Minigrid Investment Report presents a clear pathway to scale in Nigeria, where the minigrid market is taking off. RMI and NESG hope that this industry will be able to provide power to millions of individuals and small businesses within the next several years.
