The Mini-Grid Business

Learnings from Nigeria

Nico Peterschmidt / INENSUS Season 1 Episode 45

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Nigeria shows what happens when mini-grids move from pilot projects to infrastructure policy. With over 200 million people and a vast rural electrification gap, the country has built one of the most mature regulatory and financing ecosystems for decentralized power in Africa—and a living laboratory of what works and what breaks at scale.

In this episode, Nico is joined by Joanis Holzigel (COO, INENSUS) and Hannah Kabir (CEO, Creeds Energy) to unpack the success factors and challenges the Nigerian mini-grid sector faced on its path to scale. 

Clear rules enabled investment: standardized permitting, protection against grid arrival, and portfolio-level approvals allowed financiers to underwrite pipelines instead of single sites. Performance-based grants proved more effective than centrally selected tenders, letting developers choose commercially viable communities and scale faster. Local companies grew alongside international players, while interconnected mini-grids opened collaboration with utilities rather than competition.

But scale exposed pressure points. Political expectations capped tariffs below cost, inflation and currency depreciation eroded revenues, and higher prices reduced consumption instead of improving profitability. The sector responded with local-currency financing, updated regulations, and decentralization to state governments—steps aimed at restoring bankability and speeding deployment.

The key outcome: mini-grid roll-out in competitive markets succeeds when regulation is predictable, grants reward performance, and developers retain site selection freedom. Long-term sustainability, however, depends on realistic tariffs, FX-resilient finance, and integrating productive use and rural industry from the start. Nigeria’s experience turns mini-grids from a technical solution into an economic system—and offers a replicable roadmap, with clear cautions, for other countries.

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