The Mini Grid 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. The REA will provide the minimum subsidies required to the successful proposers.

The REA has prioritized 250 sites to be tendered, spread across four states: Niger, Sokoto, Ogun, and Cross River states. These sites will be packaged into lots, by state, to encourage economies of scale in procurement and efficiency in operations and management. The Tender will be implemented in two phases. The first phase will be a pilot for 57 sites; the remaining sites will be tendered in the second phase.

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, the process can be divided into two stages. Successful proposers will first enter into a grant agreement with the REA. Then, once developers have built their mini grids and connected their customers, the grants will be disbursed upon verification that customers have been connected to the network and have been provided satisfactory service.