With her energy demand outstripping supply, and transmission constraints and other challenges plaguing her on-grid electricity market, Nigeria has begun to adopt policy initiatives aimed at supporting the commercialisation and rapid deployment of mini-grids across the country, especially in rural and exurban areas.
The recently issued Nigerian Electricity Regulation Commission (NERC) Regulation for Mini-Grids (the Regulations or the Mini-Grid Regulations) outlines a regime for the regulation of mini-grids which is in many ways intended to insulate mini-grid developers from the current challenges of the country’s on-grid electricity market, and designed to promote investment in rural electrification. In the main, the Regulations provide a framework for (i) engagement between mini-grid developers and existing distribution companies, (ii) private retail tariff arrangements for certain operators; and (iii) compensation for developers in the event of operational expansion by the distribution company licensed to cover the relevant community.