The objective of Standalone Solar Home Systems for Households and Micro Small Medium Enterprises (MSMEs) component is to help millions of unserved and underserved Nigerian households and MSMEs access better energy services at an affordable cost, via stand-alone solar systems through the private sector companies. This in-turn will significantly scale up the market for Solar Home Systems (SHS) in Nigeria.
The target beneficiaries are people in off-grid locations or underserved customers that have inefficient and unreliable energy access.
The grant support provided through NEP will leverage other sources of finance such as: company’s own equity, equity/debt from investors, and facilitate access to credit by reducing risk to lending entities, which will consequently promote the maturity of the market.
The component consists of two funding windows
Output Based Fund (OBF): Providing fixed incentive grants of up to 60% of the cost of the system to the grantees per each eligible system installed and verified. Applications for the OBF are on a rolling basis until funds are exhausted.
Market Scale-Up Challenge Fund (MSCF) : Providing lump sum grants paid in quarterly tranches; awarded against strongest and ambitious business plans capable of delivering at scale. Grant amount depends on business needs and capability/ performance of firm, but no more than 20-30% of total funding plan (financial leverage requirement)
Output Based Fund
USD$60 million is allocated to this sub component. This fund will provide fixed incentive grants of up to 60% of the costs of the system to the grantees, per each eligible system installed and verified. However, 20% of the grant received will be used to reduce the cost of the end-user product price.
This support will enable the firms to finance the required investment in people, training, advertising, processes, and logistics inclusive of gender workforce integration and disaggregation as informed by the government gender program.
The grant amount will be fixed for each system size/ level of service category, and continually reduced over the life of the program.
Output Based Fund Sub-component
Pre-qualification for Output Based Fund aims to ensure that the applicant has the capacity required to deliver quality assured products and after sales service to customers and will have the internal integrity and rigor to cope with the reporting and audit requirements attached to the grant.
Interested applicants can register via the link provided on the REA website. Login details to the Odyssey application platform will be sent via e-mail following registration.
The evaluation process of the OBF consists of assessing the company and the product. The company evaluations are divided into 9 sections detailing various aspects of their company and its business model.
In addition, all the products to be accepted into the programme must be quality verified, products must pass the Quality Verification Framework for the NEP and be certified by either Verasol formally Lighting Global (LG) or International Electro-technical Commission (IEC).
It is important to know that for the OBF evaluation, firms are not ranked but rather admitted or rejected subject to either passing or not passing the minimum average score of 70%, across the criteria below.
However, companies are allowed to re-apply to the programme provided they are able to address the issues raised by the evaluation committee.
The NEP team will be available to provide all necessary support and guidance to companies applying to the programme.
|Company Profile||Identify company, governance structures, and key personnel. Confirm regulatory compliance. Financial standing.|
|Customer Tracking||Evidence of the ability to meet the requirement to identify, track and report customers and SHS.|
|Customer Services||Evidence of ability to effectively provide pre- and after- sales service to those customers that are acquired, including easy and practical warranty service.|
|Operational scale||Evidence of ability to achieve the minimum required level of sales.|
|Skills and experience||Relevant experience or company and key people for building scale in the private SHS market.|
|Product||Identify SHS products, verify Lighting Global quality certifications (from independent laboratories)|
|Environmental Management||Evidence that environmental and social risks are mitigated.|
|Gender Inclusion||Evidence of promoting gender inclusion in all the company’s programme.|
|Background Checks||Consent to conduct background checks on the applicant’s company, associated companies, and key individuals.|
|Declarations||Declarations to comply with key terms. Consent for background checks on company and key people.|
OBF Grant Unit Rate
The OBF grant unit rate will be paid as a pre-defined amount per system (Unit Rate) for each system installed. Once a company is eligible and has met all the criteria listed, each product will be categorized into several Tiers based on capacity and service.
Within each Tier of SHS, a single unit rate of OBF grant will be paid against all systems.
The grant amount per system (Unit Rate) varies across several categories of solar product.
Evaluation and Administration
A competitively selected Grant Administration Firm (GA) handles the day-to-day communication with the grantees and reports to the NEP Project Management Unit (PMU) at the REA. The GA is responsible for tracking the grant allocations to the grantees, screening applicants against eligibility criteria at the pre-qualification stage, and tracking progress toward meeting the milestones and results achieved by the grantees.
The Selection Panel (SP) established by REA and consisting of in-depth knowledge of the business of SHS in the private sector covering all business models and all aspects of the business will select the companies to be awarded the MSCF.
The panel will be selected in their personal and professional capacity and appointed after approval by the REA and no-objection by the World Bank
Market intelligence is the information relevant to a company’s market, gathered and analyzed specifically for the purpose of accurate and confident decision-making in determining strategy in areas such as market opportunity, market penetration strategy and market development. To enable the Nigerian market for SHS, we understand the importance of accurately analyzed data.
Therefore, we have pooled various sources of readily available data to support market growth.