A new $300 million funding initiative has been launched in Nigeria to support distributed renewable energy projects
The African nation could drive regional growth in the Sub-Saharan off-grid solar segment, according to Wood Mackenzie, but financing remains a concern
The DRE Fund aims to bridge this gap; it can serve as a model to be replicated across the wider African continent, according to the partners
Nigeria has launched a $300 million Distributed Renewable Energy (DRE) Fund to support mini-grids, standalone solar and other distributed energy projects. The fund aims to bring more private investment into areas where grid power remains limited or unreliable.
Launched by the Nigeria Sovereign Investment Authority (NSIA), Africa50 and Sustainable Energy for All (SEforALL), the DRE Fund supports Mission 300, which aims to connect 300 million Africans to electricity by 2030.
According to NSIA, the commercial launch of this fund signals growing market readiness and investor confidence in Nigeria’s distributed renewable energy sector. It will help scale up such solutions across the country and also serve as a model to be scaled across Africa.
The launch comes as Nigeria's off-grid solar market is expected to grow strongly. Wood Mackenzie projects Sub-Saharan Africa’s off-grid solar market to grow by 450% by 2035, expanding total installed capacity sixfold. Nigeria is likely to account for nearly 35% of Sub-Saharan Africa's off-grid solar installations.
BloombergNEF calls Nigeria the fastest-growing small-scale solar market in Sub-Saharan Africa. It expects the country to lead regional growth through 2035, with cumulative solar capacity reaching 87 GW as homes and businesses turn to solar amid high fuel costs and unreliable grid supply.
Businesses and communities in Nigeria are increasingly turning to solar for self-generation, driven by ‘punishingly expensive’ diesel. Solar-as-a-service now undercuts it, says Wood Mackenzie. Analysts highlight financing as a binding constraint for off-grid solar in Sub-Saharan Africa.
Wood Mackenzie explains that high financing costs and policy uncertainty limit off-grid solar growth in the region. Scaling it up will depend on new public-private financing models to close the funding gap.
The $300 million DRE Fund attempts to fill this gap, calling it the first country-level demonstration linked to a continental financing platform. It includes an initial $25 million from the World Bank’s International Development Association (IDA).
“We believe this model and its associated knowledge transfer between Africa and India can be replicated across African countries to help unlock investment at scale,” said Ashish Khanna, the Director General of the International Solar Alliance (ISA).
In May 2026, the Green Finance and Investment Facility (GFIF) launched a $188 million financing package for 188.4 MW of distributed solar projects across 12 project lots. It will help deploy 40 interconnected mini-grids under the Nigeria Distributed Access Through Renewable Energy Scale-up (DARES) project that aims to unlock private-sector investment at scale.
