The Rocky Mountain Institute (RMI) in collaboration with the Nigerian Economic Summit Group (NESG) this week released a report entitled, Minigrid Investment Report: Scaling the Nigerian Market, which shows how mini-grids can improve business profitability.
According to the report, mini-grids could also stimulate a $20 billion investment opportunity throughout Nigeria.
At present, only 45% of the Nigerian population has access to electricity, and only 36% of the population in rural areas has access to a centralised power source.
Mini-grids 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 mini-grid 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 mini-grids could drive a significant economic change in rural Nigeria,” Graber added.
The research presents the following findings to show how necessary mini-grids are to the future of Nigeria’s business structure:
- Scaling mini-grids could create a $20 billion investment opportunity
- Over 80% of Nigerian business owners cite electrification challenges as their most significant obstacle, and mini-grids could solve the most common challenges through high reliability and consistent quality
The report also provides recommended best practices for the mini-grid sector, based on current operating mini-grid projects, which can ensure success from both a business and development perspective.
The Mini-grid Investment Report presents a clear pathway to scale in Nigeria, where the mini-grid 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.
Download the full report here.