As power outages worsen, Nigeria plans 28 new mini-grids to keep the lights on

Nigeria entered 2026 with an electricity sector still operating on the brink. Between 2024 and 2025, the national grid collapsed at least 16 times, including three failures in a single week in October 2024. 

On December 29, 2025, while Nigerians were still in festive mode, the grid failed again, plunging homes and businesses into darkness.

While the grid has avoided a full system collapse so far in January 2026, it remains under heavy strain, with generation hovering at 4,140 megawatts on Wednesday, January 21, 2026, far below what a country of over 200 million people requires. 

The Nigerian government is pushing to expand off-grid electricity, with mini-grids emerging as a central pillar of its response.

Abba Aliyu, chief executive officer of the Rural Electrification Agency, the government agency in charge of providing electricity in rural communities, told TechCabal that 28 new mini-grids are scheduled for completion in the first quarter of 2026, even as grid supply continues to deteriorate in rural and urban areas. 

“Mini-grid is the key technology option because we continue to witness the real-life impact of the technology across sectors,” he said. “This solution is not only an electrification tool but a development catalyst, powering communities, schools, health centres, security, markets and accelerating inclusive economic growth.”

The push reflects a growing policy consensus: while the national grid struggles to stabilise, decentralised power systems offer a faster, more reliable way to keep communities, businesses, and public institutions electrified.

At the heart of this shift is a broader question about what “reliable power” really means. Electricity is only transformative if households and businesses can afford it and if the systems delivering it can survive beyond pilot phases and donor funding cycles. 

Mini-grids sit squarely at the intersection of these concerns. When properly financed and priced, they can lower energy costs for communities dependent on diesel generators while offering investors predictable, long-term returns tied to real demand. 

Solving for affordability drives adoption; solving for sustainability ensures these systems endure, scale, and continue to attract capital.

Against Nigeria’s grid instability, mini-grids have increasingly positioned themselves as one of the country’s most dependable sources of electricity. 

A typical system combines solar panels, battery storage, local distribution lines, and smart prepaid meters, delivering power when it is needed rather than when the grid allows. For households and small businesses, that reliability can be transformative.

Today, roughly 170 small, localised mini-grid networks, mostly solar-powered and battery-backed, supply steady electricity to communities the national grid cannot reach or cannot serve reliably. In rural Nigeria, they are increasingly seen as an antidote to years of darkness, diesel fumes, and generator dependence.

In Olooji, Ogun State, for instance, a 100 kWp hybrid solar mini-grid installed in 2024 now generates about 146,000 kWh annually, significantly reducing diesel use. In Ajegunle, a community in Edo State’s Ovia South-West Local Government Area, a 40 kWp hybrid system supplies electricity to more than 3,500 residents.

“The nation has, in abundance, the natural resources needed for effective deployment of mini-grids, including sunlight,” said Aliyu. “While traditional grid extension is constrained by high capital costs, long timelines, and weak infrastructure, mini-grids can be deployed more quickly to meet existing demand and alleviate energy poverty.”

Aliyu added that beyond deployment speed, the agency has aligned its mini-grid strategy with President Bola Tinubu’s “Nigeria First” policy, deliberately embedding local content and industrialisation objectives into the sector. In 2025, the REA secured commitments of over $430 million in local manufacturing investments across the renewable energy value chain, as part of efforts to reduce foreign exchange exposure and strengthen domestic capacity.

Yet, as mini-grids scale, a harder constraint is coming into focus. Reliability alone is not enough. If rural households cannot consistently pay for power, the long-term sustainability and scalability of these projects remain uncertain.

Failing grid, adaptive market

Nigeria’s grid fragility has shifted from an occasional crisis to a defining feature of the power sector. 

Transmission bottlenecks, gas supply disruptions, vandalism, and decades of underinvestment have turned outages into a persistent risk. 

What looked like relative power supply stability in early 2025 quickly unravelled as grid failures became more frequent toward the end of the year.

That fragility has carried into 2026 in quieter but no less consequential ways. 

On January 9, Eko Electricity Distribution Company downgraded several feeders across parts of Lagos and Ogun State, including Ajah, Lagos Island, Agbara, Lekki, Ijora, Ajele, and Mushin, from Band A, which promises at least 20 hours of daily supply, to Band E, cutting electricity availability to as little as four hours a day. 

For households and businesses, the move illustrated how quickly “premium” power access can erode when the grid comes under stress.

Mini-grid deployment is accelerating against this backdrop. Aliyu said 28 mini-grids will be completed in Q1 2026 under the third call of the Rural Electrification Fund (REF). At the same time, Phase III of the Energising Education Programme (EEP) will deliver eight solar hybrid plants across eight federal universities this year.

Other programmes reinforce the push. Under the World Bank–funded Distributed Access through Renewable Energy Scale-Up (DARES) initiative, the REA is overseeing 391 mini-grids with grant agreements already signed. Four additional systems will be commissioned in the Federal Capital Territory under the Korea Energy Project in Q1 2026. 

Another 39 mini-grids are in the pipeline through federal capital projects and the National Public Sector Solarisation Initiative, while 23 more under the Africa Mini-grid Programme are expected to come online within the same period. Combined, these efforts could push Nigeria past the 1,000 mini-grid mark in 2026.

What mini-grids solve and don’t

Mini-grids were never designed to fix Nigeria’s entire power sector. The country needs an estimated 30,000 MW to meet current residential demand, a level that would require roughly $262 billion in investment, according to Power Minister Adebayo Adelabu.

“They [mini grids] are targeted at a specific customer base and can drive local industrialisation,” Rasheed Belo-Osagie, senior associate at ENR Advisory, an energy and infrastructure law firm, said. “They may not solve the fundamental grid problem, but they offer an immediate solution to satisfy effective demand.”

That immediacy matters in communities where grid supply is nonexistent or functionally absent. The REA deployed over 200 mini-grids in 2025 alone, while DARES aims to roll out 1,350 systems serving 17.5 million Nigerians.

Still, as Ayodele Oni, partner at Bloomfield Law and director at Tetracore Energy, an integrated energy solutions provider with a significant presence in Nigeria, notes, mini-grids cannot fully resolve poor-quality electricity nationwide. 

“They [mini grids] are focused on unserved and underserved areas,” he said. “That does not significantly address the systemic issues affecting the national grid.”

The affordability dilemma

Mini-grid electricity typically costs more per kilowatt-hour than grid power, largely because grid tariffs are heavily subsidised. In 2024, the federal government spent about ₦1.94 trillion ($1.29 billion) on electricity subsidies, masking the true cost of power. Mini-grids, by contrast, operate on cost-reflective tariffs designed to recover capital and operating expenses.

Under the Nigerian Electricity Regulatory Commission (NERC)’s Mini-Grid Regulations 2023, tariffs are negotiated with host communities and approved by the regulator. While this keeps projects viable, it also means prices reflect real costs: solar panels, batteries, inverters, maintenance, and financing.

Connection fees range from $160 to $700 per customer, far cheaper than grid extension, which can cost at least $25,000 per kilometre. Yet for low-income households, mini-grid power can still feel expensive, even when it is cheaper than diesel.

Government support largely comes through capital grants rather than consumption subsidies. Under DARES, $410 million has been earmarked for performance-based grants to reduce upfront costs. While this lowers tariffs, it does not fully solve affordability for the poorest users.

Reliability versus income

For many rural Nigerians, the choice is not between cheap grid power and costly mini-grids, but between unreliable supply, noisy generators, and darkness. In that context, mini-grids often win.

Affordability, however, is tightly linked to income. This is why the REA runs a model anchored on productive use of energy (PUE) and anchor loads. By integrating income-generating activities, such as irrigation, cold storage, agro-processing, and workshops, into project design, the agency aims to improve electricity demand, strengthen load factors, and stabilise revenues for operators.

Aliyu said the agency has also embedded community-led governance into its sustainability framework through Rural Electricity Users Cooperatives (REUCS), which formalise civic agreements between developers and beneficiary communities. 

In 2025, the REA published revised harmonised technical standards, tightening governance and holding renewable energy service companies (RESCOs) to clearer benchmarks that protect federal investments and extend asset lifespans.

To strengthen long-term performance, the agency said it is also deploying remote monitoring and verification technologies. 

Under its 2025 capital projects, GPS-enabled tracking systems were introduced to monitor grid extension and solar streetlight projects, technology that is now being integrated across mini-grid deployments to track service quality, technical performance, and socio-economic impact.

Beyond rural Nigeria

Interconnected mini-grids are also expanding into peri-urban areas in states such as Kano, Ogun, and Nasarawa, supplying power when the grid fails. Backed by $127 million under DARES, these systems improve reliability but depend heavily on the condition of existing distribution infrastructure.

Local manufacturing could eventually lower costs. Nigeria’s solar assembly capacity rose to over 600 MW in 2025, and the REA says it is working with vertically integrated renewable energy companies to accelerate domestic lithium battery and photovoltaic manufacturing. At the same time, the agency is investing in workforce development: in 2025, it trained 131 young Nigerians who have since secured paid placements in renewable energy service companies nationwide.

Further capacity building is planned through the optimisation of Workshop and Training Centres under Phases I and II of the Energising Education Programme, with new partnerships expected to support thousands of skilled workers across states.

Meanwhile, the Electricity Act 2024, which devolves power regulation to states, could accelerate deployment, but only if regulatory capacity keeps pace. As Belo-Osagie put it, the Act “can set the country on a new trajectory,” but coordination remains critical to avoid fragmentation.