Innovative Business Model Implementation Report: Power Africa Nigeria Power Sector Program

The off-grid energy sector, dominated by technologies such as solar mini-grids and distributed solar home systems, plays a key role in strengthening the power sector in Nigeria and achieving the goals of energy access across the country. Economic viability of off-grid energy solutions is key to accelerating their expansion and deployment at scale in Nigeria. This report summarizes the implementation of one of the innovative business model pilots – the integration of strategic existing anchor loads across a large-scale solar-mini-grid development roll-out – with a Nigerian oil and gas station company. The report also includes an overview of Energy+ business models progressed with key stakeholders to date and for further consideration for current/future pilots. PA-NPSP is a five-year reform effort that aims to address, and help overcome, Nigeria's systemic liquidity and supply chain constraints through targeted interventions from gas supply for generation to distribution of power to end consumers. PA-NPSP uses a flexible approach to develop, deploy, evaluate, and sustain a variety of interventions and activities to respond to the critical needs and the economic, political, and social development of the sector. The anchor load concept has fueled the design of PA-NPSP's Energy+ models, which it has progressed with health, agriculture, water stakeholders. Integrating an anchor load into a mini-grid business model provides a potential solution and mitigation measure to investor concerns around cashflow stability in mini-grid development. The inability of developers to secure contracted cashflows for projects has often limited investor confidence in assessing the commercial viability of mini-grid projects in Nigeria. The implementation of the mini-grid anchor load strategy with a business involved in gas stations is a key component of PA-NPSP's innovative business model pilots. This report provides an overview of the Energy+ business models devised under PA-NPSP, including the integration of strategic existing anchor loads across a large-scale solar-mini-grid development roll-out. The report highlights the potential of the anchor load concept to increase the average revenue per user (ARPU) and provide a stable source of income for mini-grid developers. The Power Africa Nigeria Power Sector Program's support to the off-grid energy sector aims to create conditions for investors and customers to gain confidence in the sector. By facilitating the implementation of innovative financing models and demonstrating the market's viability, PA-NPSP aims to accelerate the growth of nascent but critical energy solutions in Nigeria. The implementation of the mini-grid anchor load strategy with a business involved in gas stations is a key step towards achieving this goal.