The Nigerian Electricity Regulatory Commission (NERC) has unveiled comprehensive commercial guidelines for interconnected mini-grid operators, establishing a new framework for payments to distribution companies (DisCos) and addressing critical barriers to mini-grid deployment across the country.
Effective from December 1, 2025, the Guidelines on Commercial Framework for Interconnected Mini-Grids introduce a two-part pricing structure designed to clarify financial obligations between mini-grid developers and distribution licensees.
Under this new framework, operators are required to pay a fixed Rental Fee for capital recovery and a variable Cost of Energy charge based on actual electricity consumption.
The Rental Fee is designed to compensate DisCos for network and interconnection asset usage, while the Cost of Energy component covers upstream generation, transmission charges, regulatory borrowings, and a portion of distribution-related expenses.
The guidelines explicitly limit the pass-through of distribution operational costs and losses, reflecting the limited services mini-grids typically receive from DisCos.
A significant feature of the new framework is its approach to legacy debt. To safeguard consumers from excessive financial burdens, customers in mini-grid areas with outstanding debts will be subject to structured recovery agreements capped at 10 per cent of their energy purchases.
To ensure transparency, all transactions between mini-grid operators and DisCos will be routed through centralized feeder collection accounts administered by NESI Stabilisation Strategy Limited. The framework also establishes protocols for provisional settlement in instances of meter failures or missing data.
NERC stated that these guidelines are aimed at improving the bankability of mini-grid projects, facilitating safe interconnection, and accelerating electricity access in underserved communities where conventional grid extension remains economically challenging.
Industry stakeholders have welcomed the move, noting that it resolves long-standing commercial uncertainties and could unlock the sector’s potential to address Nigeria’s electricity access deficit.