Rocky Mountain Institute and the Nigerian Economic Summit Group have released a report entitled Minigrid Investment Report: Scaling the Nigerian Market which shows how minigrids can improve business profitability and stimulate a $20 billion investment opportunity throughout Nigeria.
Currently, only 45 percent of the Nigerian population has access to electricity, and only 36 percent of the population in rural areas has access to a centralised 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 research found that over 80 percent of Nigerian business owners cite electrification challenges as their most significant obstacle. 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 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”.
Dr. Tayo Aduloju, a Senior Fellow, Public Policy and Institutional Governance at the Nigerian Economic Summit Group, added that the market opportunity is undeniable and that 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.
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.
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