The Minimum Subsidy Tender aims to kick-start the Nigerian market and catalyze mini grid deployment at scale. Mini grid developers will compete on the basis of quality (technical proposal) and price (minimum subsidy requirement) to build, own, and operate solar hybrid mini grids. REA-NEP will provide the minimum subsidies required to the successful proposers.

The MST will be implemented in two phases. Under the MST-AfDB, NEP has prioritized 99 sites to be tendered in the first phase, spread across the following States: Kwara, Oyo and Nasarawa. These sites will be packaged into lots, by States to encourage economies of scale in procurement and efficiency in operations and management. The remaining sites will be tendered in the second phase across Jigawa, Enugu, Delta and Ekiti States

For the MST World Bank, NEP has also prioritized 250 sites to be tendered, spread across ten (10) States: Niger, Sokoto, Ogun, and Cross River. The first phase will be a pilot of 57 sites; the remaining sites will be tendered in the second phase in Abia, Anambra, Bauchi, Kano, Ondo and Plateau. Application for MST-WB is closed.

The tender will be implemented in four steps, as illustrated in the figure below.

The selection consists of a two-stage process. At the invitation for initial selection stage, proposers will need to demonstrate that they are eligible and qualified. Proposers that are initially selected will then be invited to submit proposals to serve a pre-defined number of customers, with a pre-defined quality of service. Initially selected proposers may submit proposals for one or more lots. The technical and financial proposals will be evaluated to determine who is awarded each lot.

After the competitive phase, successful proposers will first enter into a grant agreement with the REA and thereafter proceed to building their mini grids and connecting to their customers. The final process is the disbursement of the grants which will be done upon verification that customers have been successfully connected to the network and have been provided satisfactory service.