The government of Nigeria currently targets 100 percent electrification rate by 2040, and off-grid energy will play a vital role. The electrification rate currently stands at 45 percent, with higher access in urban areas (55 percent) compared to rural areas (36 percent). While the country has an energy generating capacity of 12,522 MW, 20 million households remain without energy access. Extending on-grid connections will continue, but it will be timely and costly, particularly for rural and sparse populations. Off-grid energy, however, presents a viable alternative, and standalone systems are particularly well suited to reach the hardest to reach customers.

The SAS sector is nascent and fast-growing, and stakeholders have committed to its rapid expansion. The Nigerian government looks to add 5 million new solar connections through solar home system and mini-grids by 2023 under the 2020 Economic Sustainability Plan, reaching 25 million people.9 This builds on a young and growing sector, comprised of international companies that have established traction in other markets—for example BBOXX, Lumos, Zola Electric, d.light, Azuri, and Oolu—and often smaller but established local companies such as Sosai Renewables, Arnergy, Blue Camel, Consistent Energy, and ColdHubs, among others. Combined, these companies have an annual revenue potential of USD 1.2 billion, presenting opportunities for both private and public investments.

To achieve the government’s goals, stakeholders must execute a rapid roll-out and provide strategic support to existing SAS companies. Many companies in the sector are yet to achieve substantial scale-up of their businesses, and many—in particular local companies—cite limited access to the right financing as the primary setback to growth.
Given the capital-intensive nature of this sector, companies will require substantial investment to prove commercial viability, scale operations, and support the country’s electrification efforts.