Nigeria’s Mini-Grids Trigger A $7.8 Billion Clean Energy Wave Globally

Villagers walk on the street of Sabon-Gida, near Lafia, Nassarawa State, Nigeria on October 17, 2023. Mini-grids — small power stations usually supplying rural communities — are not new. But the drop in solar technology costs over a decade has prompted a growth in clean energy minigrids with rural Africa poised to benefit the most. Nearly 600 million Africans live without electricity access, and in Nigeria alone that figure is 90 million or around 40 percent of the continent’s most populous nation. And while Africa may have the most potential to generate solar power, according to the International Energy Agency (IEA), the continent lags behind installed capacity. (Photo by Kola Sulaimon / AFP) (Photo by KOLA SULAIMON/AFP via Getty Images)

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Nigeria’s $3.2 million energy project could serve as a harbinger for other emerging markets. It focuses on solar mini-grids, which distribution companies long dismissed as too risky to integrate into their networks. But that’s changing now that the Global Energy Alliance for People and Planet stepped in with seed capital and hands-on technical expertise to absorb the initial risks.

The pilot has been successful, and regulators have adjusted their course, requiring utilities to source part of their supply from renewable sources. The result? The World Bank committed $127 million to expand the approach, along with $50 million dedicated to productive-use technologies like irrigation pumps and cold storage units (refrigeration for perishables). What was once a fringe idea is now becoming mainstream in Nigeria’s energy system, showing how modest, well-placed interventions can trigger systemic change.

Nigeria’s story is more than an anecdote; it serves as a blueprint for Africa and the Global South. Small, well-organized interventions can unlock market logjams, attract large-scale finance, and generate livelihoods while cutting emissions. In a continent where 600 million people still lack electricity and the youth population is expected to grow by 138 million over the next 25 years, the stakes are incredibly high. With risk-absorbing funding, aligned policies, and local participation, universal energy access moves from being an aspiration to a realistic goal.

“We take risks where markets are stuck, we embed data and technical expertise to prove what works, and we design with governments and communities so that successful pilots can scale into systems change,” Tulika Narayan, chief impact officer for the Global Energy Alliance, told me. “Our work in Nigeria shows how relatively modest sums of capital can be catalytic if structured well and deployed in concert with partners across the ecosystems.”

Nigeria illustrates the broader promise of a partnership-driven approach. Across Africa, the Global Energy Alliance has contributed $4.2 billion to 49 projects that are either deployed or ready for deployment. The goal is to unlock capital—to prove the pilots’ effectiveness and attract follow-on investment.

These initiatives are expected to improve access for 31 million people, support 727,000 jobs and livelihoods, and avoid 88 million tons of CO₂ emissions. The Alliance’s work supports Mission 300, a joint initiative of the World Bank Group and African Development Bank, aimed at connecting 300 million Africans to electricity by 2030.

Leveraging Capital at Scale

The Africa portfolio exemplifies the Alliance’s core philosophy: combining foundational investment with technical expertise, embedding measurable outcomes from the outset, and aligning projects with national priorities. In Nigeria, for instance, funding was coupled with hands-on support within utilities to demonstrate that mini-grids could operate commercially. That helped regulators and private investors understand that small-scale renewable energy could be placed into national energy systems.

“For Africa, the stakes could not be higher: 600 million people in Sub-Saharan Africa still live without electricity, the largest concentration of energy poverty anywhere in the world. Without urgent action, millions will be locked out of the energy-enabled economy,” Carol Koech, vice president, Africa, for the Global Energy Alliance, explained to me.

Since its launch at COP26 in 2021, the Global Energy Alliance has provided $503 million in seed capital, helping unlock $7.8 billion in investments across 137 projects in more than 30 countries. The results are significant: improving energy access for 91 million people, creating or supporting 3.1 million jobs, and avoiding 296 million tons of CO₂ emissions.

While Africa’s $4.2 billion portfolio holds the largest regional share, the Alliance also operates in India, where it has invested $1 billion in 26 projects, providing access to electricity for 49 million people. It is also active in Latin America and the Caribbean, where it has invested $599 million in 22 projects, supplying power to 7 million people. Additionally, it is present in Southeast Asia, where it has invested $1.7 billion in 37 deals, providing electricity to around 4 million people.

This shows that its methods are effective. However, the main points are that country-led initiatives work best—those aligned with national policies and able to gain regulatory approval. Funding should also be paired with technical expertise to ensure the projects meet their goals.

If properly executed, the investments can be leveraged successfully. “This is possible because every dollar of our $503 million in seed capital has helped unlock fifteen times more in total investment—$7.8 billion to date,” Woochong Um, chief executive of the Alliance, told me. And that is just a beginning.

Why Skepticism Is Warranted

Not every initiative that promises to “unlock” billions succeeds in practice. Development finance is littered with well-intentioned pilots that never scale. In fact, some impact statements blur the line between pledges and actual results—presenting announced funds as if they are currently producing measurable outcomes. In many cases, projects remain in the planning or early pilot stages, so the reported results are aspirational rather than realized.

Investors are justified in their caution, as emerging markets often face regulatory and political uncertainty, weak local balance sheets, and currency fluctuations.

What sets Nigeria apart is that it has surpassed the credibility threshold. The $3.2 million seed capital was intentionally structured to de-risk projects, embed technical expertise, and establish a regulatory-friendly pipeline. This prompted the Nigerian Electricity Regulatory Commission to mandate utilities to source renewables, thereby changing the market dynamics. Within two years, $177 million in follow-on financing from the World Bank and other partners flowed into the sector. The Alliance’s sequence—de-risk, demonstrate, and craft policy before scaling—differentiates these results from less credible promises.

“Only one-fifth of global energy investment flows to emerging markets and developing economies. Redirecting even a fraction more could drive faster connections, stronger local economies, and real momentum toward a just energy transition and universal energy access,” says the Alliance’s Koech.

Nigeria demonstrates how small yet strategic actions can transform regulatory environments, attract investment, and connect electricity access to people’s livelihoods. The outcome doesn’t just increase power supplies; it also generates energy that supports irrigation, cold storage, and small businesses—producing tangible economic benefits alongside climate advantages.

If this model works in Nigeria—a country with the world’s largest energy access gap—it can be replicated across the developing economies worldwide, providing a blueprint for a fair, inclusive, and sustainable energy future.