NIGER: Private Sector-based Delivery of Electricity Services in rural areas

Niger’s access rate is one of the lowest in the region (only 10 percent of Niger’s population has access to electricity), far below the Sub-Saharan Africa’s average rate of 31 percent. The overall rate masks significant disparities between urban and rural areas. The rate is below one percent in rural areas, varies between 20 and 40 percent in smaller cities, and stands at around 50 percent in Niamey. Niger’s power network comprises four grids with interconnections with Nigeria, one grid supplied by a coal plant operated by Sonichar (a private company), and a significant number of diesel-based isolated grids. Due to a number of financial, regulatory, institutional and market barriers, off-grid electricity access has been limited, based mostly on unsustainable delivery models. Recognizing the urgent needs in the power sector, the Government has acted to improve the institutional and legal framework, but further work is required. Moving forward the Government plans to boost electrification both with on-grid and off-grid solutions. The Government is developing a national electrification strategy that will ramp up access in urban, peri-urban, and rural areas through both on-grid and off-grid solutions, considering least cost options for various geographical areas.
Besides, Rural Electrification through solar isolated systems and mini-grids requires the adoption of a framework agreement with county governments, to identify an operating model. An enabling framework would need to be developed to specify tariffs, licensing and bidding strategy that could attract private sector investments. Market soundings would also be useful to determine whether there is sufficient competition for the larger markets, whether a concessional model would be required for more rural areas, or whether the utility needs to demonstrate a number of successful pilots to attract private sector capital.

Within this context and in complement to the WB Energy GP and the AfBD supports, PPIAF assisted the Government of Niger through the Ministry of Energy to assess the implementation of a private-sector based delivery model and the definition of a revenue model, for providing solar electricity services in rural areas of Niger.  This led to a review of the legal and regulatory framework to enable private sector to participate in rural electrification schemes in Niger. a feasibility study for the five sites also developed as well as the economic and financial analysis of the five mini-grids of the pilot phase and PPP recruitment templates to facilitate the selection of the private operator. Technical and institutional capacity building for the Ministry of Energy, ANPER and other institutions was also provided as part of this assignment.