According to World Bank analysis, Nigeria has the world’s largest population without access to electricity with an estimated 85 to 90 million people living without a reliable power supply, equivalent to upwards of 40% of the country’s total population.

Nigeria's electricity access problem is heavily concentrated in rural areas without conventional grid infrastructure, where villages sit kilometers from the nearest connection. Extending the national grid to remote and sparsely-populated rural communities can be costly, making conventional grid connections difficult to justify.

For a country its size, Nigeria’s grid has been historically underdeveloped, with transmission and distribution networks struggling to keep pace with population and economic growth. Those connected can experience frequent outages and may receive only a few hours of electricity daily, leaving many households and businesses reliant on petrol and diesel generators. Nigeria is one of the world's largest markets for these generators, yet for many customers the costs are prohibitive.

This combination of challenges creates a significant market for distributed solar solutions, including solar home systems and minigrids, which can provide electricity access independently of the grid while reducing costly reliance on diesel. It also positions Nigeria's electricity challenge as one of both expanding access and improving reliability and affordability for existing consumers.

Accelerated rollout

Off-grid solar installations in Nigeria have been growing exponentially in recent years. According to the Global Solar Council’s Africa Market Outlook 2026-2029, off-grid systems accounted for 96% of the 803 MW of solar added in Nigeria in 2025. Earlier this week, local press in Nigeria announced that over five million new off-grid electricity connections have been recorded in the last two years.

Technical Lead for Mission 300 in Nigeria, Dayo Olowoniyi, identified Nigeria’s Distributed Access through Renewable Energy Scale-up (DARES) project as key to supporting the deployment of solar equipment in rural and low-income communities.

Implemented by Nigeria's Rural Electrification Agency (REA), DARES is a $750 million World Bank-backed initiative launched in 2024 targeting new or more reliable electricity access for over 17.5 million Nigerians. It provides capital subsidies to renewable energy companies, reducing costs for customers who might otherwise be unable to afford solar systems.

According to Africa Energy Portal analysis, DARES has provided new or improved electricity access to 5.3 million people to date, equivalent to around one-third of its target. It had enabled 41.25 MW of renewable capacity by June, against a 465 MW target by 2028, leaving little margin for error on execution in the coming years. Solar home systems have moved faster, with 1.046 million units deployed against a 2.75 million by 2028 target. Deployments accelerated sharply from 709,500 in March to over one million by June, signalling improving implementation pace.

In April, the World Bank raised the capacity limit for DARES-eligible projects to 10 MW and released up to $200 million in previously restricted funding, pledging another $243 million. The next stage of the DARES initiative requires translating this capital injection into actual projects. Meeting the 2028 targets will depend on faster project execution and sustained private sector investment.

New investments

Capital access remains the largest constraint on further acceleration of Nigeria's off-grid solar market, as companies require equity to scale operations. A growing number of impact investors and development finance institutions are stepping in to bridge this gap. Financing electrification requires both direct support for companies capable of deploying decentralized solutions at scale and risk-bearing capital to enable private sector participation.

The pace of capital deployment appears to be quickening. In the span of the six months of March to September this year, at least $88 million in new financing commitments were announced. This includes Energise Africa and All On’s $4 million investment in Maskh Nigeria, an indigenous renewable energy and infrastructure company. The financing will support 19 mini-grids in Jigawa and Bauchi states, impacting nearly 100,000 people.

In March, the Universal Green Energy Access Programme provided $13 million to Sterling Bank, enabling expanded lending to a portfolio of distributed renewable energy projects, including solar home systems and mini-grids.

In early September, Africa50 announced securing $71 million in capital, primarily from the International Solar Alliance, Nigeria Sovereign Investment Authority, and World Bank Group. The financing targets its fund providing equity to companies operating in mini-grids, off-grid solar, commercial and industrial solar, clean cooking, and electric mobility, in both Nigeria and the wider region.

This follows a similar initiative launched in March 2025, where Africa50, the NSIA, the International Solar Alliance, and Sustainable Energy for All unveiled a $500 million fund for decentralized renewable energy projects in Nigeria. Jointly managed by Africa50 and the NSIA, the fund benefits from catalytic capital from the continental fund, currently being operationalized.

What it means

With Nigeria's population projected to exceed 400 million by 2050 and grid expansion chronically underfunded, off-grid solar will remain critical to electrification objectives. For players in Nigeria's solar sector, the continued rollout of off-grid systems means strong near-term demand. But ongoing development relies on whether the financing mechanisms now in place can efficiently translate capital commitments into deployed capacity. The $750 million World Bank commitment to DARES and the emerging ecosystem of impact investors provides a foundation, but work must continue to expand in order to bring electricity access to the tens of millions of Nigerians currently without.

Sources: World Bank, The Guardian Nigeria, Global Solar Council, Africa Energy Portal