Nigeria has a huge energy access gap, with 77 million unelectrified people in 2020, the largest number in
sub-Saharan Africa and second largest globally after India. The Federal Government has taken steps to
improve electricity access including privatising the grid, however this has not resulted in any significant
improvement in electrification.
Over the past six years, the government has increasingly recognised and utilised off-grid solar (OGS) solutions
as a cleaner, faster and cost-effective means of bridging the electrification gap, including developing policy and
strategy documents that include OGS electrification and implementing related projects. However, most of its OGS initiatives, such as the Nigeria Electrification Project (NEP) and Solar Power Naija Programme, are implemented at federal level, including most of the support it receives from donor programmes, market development organisations and multilateral development finance institutions. State governments are yet to fully recognise and utilise OGS in driving energy access to their unelectrified populations. OGS providers also face several challenges working with state government institutions in delivering OGS electrification projects.
This report assesses the enabling environment for OGS at the state level, highlighting barriers and providing
recommendations to improve delivery in the states. Findings show that though the constitution of the country
empowers federal and state governments to legislate on electricity, most states are yet to develop strategies for
electrifying their off-grid communities, relying mostly on federal government initiatives. Where state electrification projects are present, they are mostly grid focused, including renewable energy projects. Budgetary allocations are also low, with states allocating between 0–5 per cent of total budgets to OGS.
Key barriers to OGS development at the state level generally stem from a lack of state government institutional
capacity on the same. This creates several bottlenecks for OGS developers, including difficulties and duplicities in obtaining regulatory approval from state government institutions, and multiple taxation. State governments also lack credible data on energy access or electrification in their jurisdictions, and other relevant data that can inform private sector investment decisions. This lack of data limits the capacity of the states to carry out proper energy access planning and where data is available, they are usually outdated. OGS providers also face more political risks and bureaucratic challenges at the state than at the federal level. Furthermore, rising insecurity across the country also poses increased risks for OGS providers as electrical installations and infrastructure have been targets of terrorist attacks. This creates increasing concern for OGS providers and investors on the safety of their assets, which are mostly deployed in last mile rural areas.
Several recommendations are made in this report towards addressing the barriers identified and empowering state governments to develop their OGS sectors. These include the development of a state OGS strategy, policy and/or action plan to guide public and private sector investment. The state governments should designate a focal government institution with core oversight on OGS with relevant stakeholder coordination, including federal government institutions, private sector and donor programmes. State governments will need to provide annual budgetary allocations for OGS electrification to catalyse private sector investment such as through public-private partnerships or guarantees for OGS projects. There is also need for proper energy access planning, which can be achieved through a geospatial platform and data collation framework. State governments can leverage already existing platforms and tools at the federal level in collaboration with federal ministries, departments and agencies (MDAs) such as REA.
Donor programmes, multilateral development finance institutions and market development organisations can
also provide technical assistance to state governments in implementing these interventions and improving OGS
electrification in the states. ACE TAF will be providing technical assistance to four states to develop OGS
policies and the capacity of relevant state government institutions.