With the world’s largest unelectrified population, Nigeria has a huge need for new electric generation capacity. In the rural areas that have the greatest electrification needs, mini-grids are often the lowest-cost solution. However, continued expansion of mini-grids depends on overcoming a key rural development trap.

Without significant demand for electricity, mini-grids are unprofitable and financially unsustainable. Without a reliable supply of electricity, it is hard to justify investing in the kind of industry that consumes large amounts of power. Thus, agricultural communities with the greatest need for electrification are caught in a vicious cycle, where power cannot be developed for lack of demand, and demand cannot be developed for lack of power.

EAP is piloting several types of projects. For example, Nigeria loses an estimated 40% of annual food production in part due to poor storage practices. The introduction of cold storage, via electric refrigerators and freezers, will dramatically extend the life of perishables, reducing waste and enabling producers to sell their agricultural goods and seafood for better prices. EAP is working with cold storage providers and mini-grid connected communities to identify cold storage needs, design scalable business models, and source equipment.

A second group of pilot projects is targeted to help the 80% of Nigerian rice farmers who are smallholders. Rice needs to be processed, and these farmers depend on local processors who typically use expensive and polluting diesel-powered mills. Microfinance institutions are generally unfamiliar with the value proposition of upgrading to electric mills, making these investments difficult to finance.

EAP is helping commercial rice mill manufacturers, processors, distributors, and women’s groups to test improved technologies. These projects will help reduce waste in Nigeria’s $3 billion per year rice industry, empower local women and farmers, and improve the economics of mini-grids.

EAP is also working with oil palm processing companies to electrify and improve the processing of crude palm oil. Smallholder farmers produce up to 80% of Nigeria’s palm oil, but poor traditional processing techniques result in low oil yield and quality. These pilot projects will explore the standardization of processing equipment and test offtake-driven financial models for processing businesses. With Nigeria already ranked the fifth largest palm oil producer in the world, this added efficiency could produce enormous economic value in rural communities.