Power Africa Nigeria Power Sector Program Off-Grid Financing Handbook

The handbook was prepared by Deloitte Consulting LLP for review by the United States Agency for International Development (USAID). It is based on the Power Africa Indefinite Delivery, Indefinite Quantity (IDIQ) Contract No. 720-674-18-D-00003 implemented by Deloitte Consulting LLP. The handbook focuses on off-grid financing options for Solar Home System (SHS) and mini-grid projects in Nigeria. It provides an overview of the due diligence process, investment committee, and negotiations involved in securing funding for off-grid energy projects. The handbook also discusses the importance of choosing a corporate structure, key areas of consideration for single and split entity structures, and the benefits of blended finance. The handbook highlights the need for off-grid energy projects to access capital at various stages of their development cycle. It provides a snapshot of the capital needs along a company's development cycle, as well as a typical investor process and timeline. The handbook also includes case studies on PA-NPSP-supported market entry and the use of SHS Receivables-backed Securities (SRBSC) model. The handbook emphasizes the importance of customer segmentation and the use of tools such as the Customer Segmentation Toolkit to identify potential customers for off-grid energy projects. It also discusses the need for off-grid energy projects to have a clear business plan and pitch deck to attract investors. The handbook provides an overview of the funding requirements across the SHS company lifecycle and the mini-grid project lifecycle. It highlights the need for off-grid energy projects to have a clear understanding of their capital needs and to develop a comprehensive business plan to attract investors. The handbook also discusses the importance of blended finance and the use of structures such as the AssetCo/HoldCo structure and the AssetCo/DevCo structure in YieldCo model. It highlights the benefits of setting up project special purpose vehicles (SPVs) to enable easy exit to potential buyers. The handbook concludes by emphasizing the need for off-grid energy projects to have a clear understanding of their capital needs and to develop a comprehensive business plan to attract investors. It highlights the importance of blended finance and the use of structures such as the AssetCo/HoldCo structure and the AssetCo/DevCo structure in YieldCo model. The handbook includes a glossary of terms and acronyms commonly used in the off-grid energy sector. It provides definitions for terms such as Investment Committee, Pitch Deck, Business Plan, and SHS Receivables-backed Securities (SRBSC). Overall, the Power Africa Nigeria Power Sector Program (PA-NPSP) Off-Grid Financing Handbook is a comprehensive guide for off-grid energy project developers in Nigeria. It provides an overview of the due diligence process, investment committee, and negotiations involved in securing funding for off-grid energy projects. It highlights the importance of choosing a corporate structure, key areas of consideration for single and split entity structures, and the benefits of blended finance.