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)
Market Scale-up Challenge Fund.
USD$15 million is allocated to this sub component. This fund will offer up-front lump sum grants to the most capable providers with strong business plans to accelerate their sales to Nigerian households and MSMEs.
These grants can also be used by grantees to provide additional direct working capital to enable faster investment in the activity and inventory needed to move quickly.
Disbursement of grant will be phased against grantees meeting their commitments per their business plans.
Market Scale Up Challenge Fund Sub-component
In addition to the pre-qualification criteria applied to the Output Based Fund, access to the MSCF will require strong evidence that the applicant possesses all of the capabilities necessary to scale massively and rapidly.
Solar companies that bid for the grants will have to show that they have been able to /are in the process of leveraging equity or debt financing to support their growth in their core market.
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.