"Community-centric model for solar mini grids" 2023

Since early 2023, the Sharing the Power project has enabled four existing mini grids in Nigeria to become more community-centric. The communities participating in the project now have access to a share of the proceeds that the mini grid yields, are supported in the development of appropriate community governance and management structures, and in some cases own a share of the system. Led by Rocky Mountain Institute, this project has set out to demonstrate the potential role that community-centric approaches can have in improving mini grid performance and in delivering greater socio-economic development impacts and community empowerment...

The hypothesis is that different elements of community-centric business models, including co-ownership of the electricity source by the community, can ensure long-term performance of the system, improves the benefits to the communities, and leverage the community knowhow, resources and private capital. This in turn can help to accelerate the growth of the sector as a whole...

Prado Power’s mini grid supplies electricity to 180 households equipped with smart meters, as well as to shops, a pharmacy and a productive use hub...

The community is not connected to the national grid and in a first survey of demand carried out in 2021 diesel generators were the predominant source of electricity. The mini grid and hub are operated by staff from the community....

In Mbiabet Ikot Esieyere, there is no formal co-ownership of the asset by the community, but there is a benefit-sharing arrangement as an addendum to the Community Power Committee agreement, whereby 20% of the mini grid proceeds go back to the community (with no related increase to consumer tariffs). In terms of community-centric governance, the Mbiabet Esieyere Community Development Initiative (of which Prado Power is a member) was established as an incorporated trustee, which is used to govern the assets and guide on reinvestment of the proceeds. The Community Development Initiative set up a bank account to safeguard the community investments. Finally, some of the gender inclusion mechanisms used include capacity building for women in the community and hiring women only as staff to operate the productive use hub, with the goal of encouraging their overall participation in decision-making...

Mbiabet Ikot Esieyere saw a 30% increase in community attendance in mini grid- related meetings, and the developers reported that the community was more willing to interact with the developers and that stronger two-way communication and trust developed...

Successful mini-grid business models in Nigeria tend to be highly customer-focused, with a strong emphasis on community engagement. Some developers - such as Prado - already reinvest in the community as part of their business model. However, models do not yet explicitly incorporate community ownership. This is because there is very low awareness of community-centred arrangements and structures, and both developers and communities lack experience with them...

Community co-owned models hold the promise of producing more financially viable and impactful mini grids in the long term. However, setting them up takes time and effort.