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  • Updated: March 18, 2023

Mini-Grid Developers: FG Approves Subsidies, Boosts Rural Electrification

Mini-Grid Developers: FG Approves Subsidies, Boosts Rural El

Electricity is indeed a utility that cannot be dispensed with as it impacts every aspect of individual, business, and national lives.

There's no gainsaying the fact that when this vital resource is absent, its absence is readily felt. 

No one else but Nigerians can share this experience better.

Mini-grid developers appear to be coming to the aid of Nigeria's rural communities now.

Mini-grid developers are companies that develop and operate small-scale electricity grids, typically in rural settings.

These grids are powered by renewable energy sources such as solar, wind, and hydropower, and are designed to provide reliable, affordable electricity to communities that are not connected to the main grid. 

Thus, these mini-grid developers are responsible for designing, constructing, and operating the mini-grid, as well as providing maintenance and customer service.

FG's Interventionist Subsidies

The federal government of Nigeria has announced plans to award subsidies to mini-grid developers for the deployment of solar power mini-grids to 150 underserved and unserved electricity sites across seven states.

 The government announced this in a statement issued by the Rural Electrification Agency (REA) on Friday.

 It noted the deployment of the mini-grids would be driven by the private sector.

It also said that the Project Management Unit of the REA, under its Nigeria Electrification Project (NEP), just concluded a hybrid pre-bid conference for the Minimum Subsidy Tender program of the solar hybrid mini-grid component.

The solar hybrid mini-grid component is financed by the African Development Bank. 

The Minimum Subsidy Tender (MST) program is a key component of the NEP, aimed at catalyzing the Nigerian off-grid market while aiding the deployment of solar hybrid mini-grids at scale.

The solar hybrid mini-grid component of the NEP supports the development of private sector mini-grids in unserved and underserved areas that have high economic growth potential. 

The REA explained in the statement, “A private sector-driven program, the MST is targeted at awarding subsidies to mini-grid developers to catalyze the rollout of solar and/or hybrid mini-grid solutions across up to 150 sites split into seven lots across seven states in Nigeria.”

“With over 100 private sector players in attendance, the pre-bid conference served as a technical, knowledge-driven platform for engagement and interaction between the NEP-PMU and prospective bidders on the MST program.”

According to the agency, the pre-bid conference also provided an opportunity for further clarification on components of the bidding document issued; offering an opportunity for feedback on the application process and program-specific information to support prospective bidders in the finalization of their bids.

While commending the private sector players for their interest and enthusiasm, the Managing Director of REA, Ahmad Salihijo, said, “The Minimum Subsidy Tender was a significant milestone in Nigeria’s efforts towards providing reliable and sustainable electricity to its citizens, particularly in rural unserved and underserved areas.”

The REA is committed to a transparent and competitive bidding process, which will result in the selection of qualified and capable contractors who will deliver the project on time, within budget, and to the required quality standards, he said.

The Head of the Project Management Unit, NEP, Abba Aliyu, said the MST program was one of the models that were being adopted specifically because it provided a transparent economically viable approach to providing access to electricity to rural off-grid communities.

The REA explained that the Federal Government, through the support of both the World Bank and the African Development Bank, had continued to optimize the Nigeria Electrification Project to power off-grid communities nationwide with clean, safe, and sustainable energy solutions.

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