Nigeria has taken an important regulatory step to improve electricity reliability and attract private investment by introducing a new framework for interconnected mini-grids. The Nigerian Electricity Regulatory Commission (NERC) issued the “Guidelines on the Commercial Framework for Interconnected Mini-Grids 2025” in late 2025, aiming to address long-standing commercial and operational challenges that have slowed the growth of decentralized power solutions in the country.
The guidelines are issued under the Electricity Act 2023 and are designed to support Nigeria’s efforts to close its electricity access gap, particularly in underserved urban and peri-urban areas. For years, private mini-grid developers have faced uncertainty when connecting their systems to existing distribution networks operated by distribution companies (DisCos). Disputes over pricing, asset usage, and outstanding consumer dues often made projects financially risky. The new framework seeks to remove these barriers by clearly defining roles, responsibilities, and commercial terms for all parties involved.
A key feature of the framework is the introduction of a standardized two-part pricing mechanism. Under this system, mini-grid operators will pay DisCos a fixed “Rental Fee” for using their distribution infrastructure. This charge is meant to cover the cost of network assets such as lines and transformers. In addition, a variable “Cost of Energy” will apply, reflecting the actual amount of electricity supplied through the interconnected system. By separating fixed and variable costs, NERC aims to improve transparency, reduce disputes, and ensure that both DisCos and mini-grid developers can predictably recover their investments.
The guidelines also address the sensitive issue of legacy debt. In many locations targeted for mini-grid deployment, consumers already have unpaid electricity bills owed to DisCos. In the past, this created confusion over who should bear responsibility for these arrears. The new rules provide a structured approach to managing legacy debt, ensuring that mini-grid developers are not held liable for past dues while still safeguarding consumer interests and the financial position of DisCos.
The introduction of these rules aligns closely with Nigeria’s broader power sector reforms and international support initiatives. In particular, the framework supports the Distributed Access through Renewable Energy Scale-up (DARES) project, which is backed by the World Bank. The DARES initiative aims to deliver new or improved electricity access to millions of Nigerians by promoting renewable energy and decentralized power solutions. By encouraging DisCos to procure a portion of their electricity from renewable sources, the government is also working toward a more resilient and sustainable power system.
Overall, the new guidelines mark a shift in how mini-grids are viewed within Nigeria’s electricity sector. Rather than being seen as competitors to the central grid, mini-grids are now positioned as complementary partners. For consumers, this regulatory change is expected to translate into a more reliable power supply, clearer billing structures, and faster progress toward a cleaner and more modern electricity system.
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