1. Market barriers for solar projects – The case of off-grid solar mini-grids –
©Andrew Esiebo

2. About Nigerian Energy Support Programme (NESP) II
Technical cooperation programme.
Funded by European Union and German Federal Ministry for Economic Cooperation and Development (BMZ).
Implemented by Deutsche Gesellschaft für internationale Zusammenarbeit (GIZ) GmbH in collaboration with Federal Ministry of Power, Works and Housing (FMPWH).
Aim: Enabling and fostering investments in renewable energy (RE) and energy efficiency (EE) (incl. solar mini-grids).
Budget: EUR 33M – EUR 20 M (EU) and EUR 13M (BMZ).
Implementation period: 2018 – 2020.

3. Market status and potential
Market still nascent, but maturing fast and with great potential
*One mini-grid in Nigeria powered by biomass. All others are solar.
Source: ECREEE/ECOWREX and FMPWH
Entrepreneurial tissue:
~10 mini-grid dev./operators organized under African Minigrid Developers Association (AMDA) – Absorption capacity?
However, lots of developers/corporates are currently prospecting.

4. Well established framework
Electric Power Sector Reform Act (EPSRA)
FMPWH - National RE and EE Policy (NREEEP)
REA – Rural Electrification Fund
NIPC and others – Fiscal Incentives
NERC – Mini-grid Regulations
FME – ESIA / NEMSA – Inspections
State Govts – Civil Permits/Land

5. Access to finance as the last main barrier
Companies behind the projects are SMEs which are not considered creditworthy.
Mini-grid projects are very risky and have not proven full commercial viability yet.
Financiers do not have experience with such projects (lots of perceived risks).
No risk mitigation mechanisms that address the needs of the financiers.
Consequently, no financial products that address needs of mini-grid projects.
As a result, mini-grids rely partly on public sector support (which is limited).
Paradoxically, secret to profitability of mini-grid business is scale.
Without access to finance, scale is not possible.
Financiers need Technical Assistance on risk assessment and Guarantees.

6. Thank you.
Carlos Miro
Head of Unit, Sustainable Energy Access (On-grid and Off-grid)
Nigerian Energy Support Programme (NESP)
@nesp_nigeria