Building a mini-grid is expensive, and rural customers can only pay so much. Public programmes help close that gap, so private developers can bring power to places the market alone wouldn't reach. In Nigeria, both programmes are run by the Rural Electrification Agency (REA).
The Nigeria Electrification Project (NEP)
NEP was the first large programme. It was funded with $350 million from the World Bank and $200 million from the African Development Bank. Its mini-grid support used performance-based grants: developers received money for each new customer connection, but only after the connections were built and independently checked.
A December 2024 World Bank progress report recorded 118,123 connections verified and paid under the performance-based grant part of the programme.
DARES: the next, larger phase
The Distributed Access through Renewable Energy Scale-up (DARES) project builds on NEP:
- The World Bank approved $750 million in December 2023.
- It aims to give more than 17.5 million Nigerians new or better electricity access.
- It is designed to attract over $1 billion of private investment.
- The mini-grid part is about $410 million, targeting around 1,100 isolated and 125 interconnected mini-grids.
- The REA held its first DARES grant signing in April 2025.
Two ways DARES funds mini-grids
| Route | How it works |
|---|---|
| Performance-based grant (PBG) | A set grant, paid per new connection for isolated mini-grids, or per unit of capacity for interconnected ones. Paid in stages after results are verified. |
| Minimum subsidy tender (MST) | Developers compete for a group of sites. The one asking for the lowest subsidy wins. |
What this means for a developer
- Grants come after building, not before. Developers need their own money or loans to build first.
- Everything is verified. Connections, meters and customers are checked before payment.
- Standards matter. Eligibility depends on technical, financial, environmental and social requirements.
Sources and notes
- World Bank: DARES project (P179687).
- REA DARES: mini-grid component.
- REA press release: first DARES grant signing.
- World Bank NEP progress report (December 2024).
- Energy for Growth Hub: An update on the Nigerian Electrification Project.
- Programme rules and grant amounts change. Always check the REA's current guidelines.