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Nigeria’s $750 million Distributed Access through Renewable Energy Scale-up (DARES) programme has saved more than $100 million within its first two years, following the adoption of a data-driven subsidy system for expanding electricity access.
The savings were achieved through a geographically differentiated subsidy designed to give higher support to companies electrifying harder-to-reach communities, according to VIDA, the digital platform supporting the programme.
DARES is being implemented by the Rural Electrification Agency (REA), with the World Bank as funder. VIDA’s data and software platform supports the programme’s planning, implementation and monitoring throughout its four-year cycle.
Under the subsidy model, developers receive payments based on the difficulty and commercial viability of connecting communities. This is intended to discourage companies from concentrating only on easier and cheaper locations.
“A flat subsidy produces the opposite incentive,” VIDA said, noting that such an approach could lead developers to focus on the least costly areas while consuming a disproportionate share of available funds.
The digital platform has also become a common source of market information for the government and more than 250 private electricity companies participating in the programme.
Private developers use the platform to identify and select locations for electrification, while government officials use the same data to assess proposals submitted by the companies.
The platform also enables the government to track the country’s electrification progress and the areas covered by individual companies, allowing it to determine how subsidies are translating into actual electricity connections and adjust incentives where necessary.
The success of the Nigerian model is now being extended to a wider regional programme expected to cover 21 countries.
The first phase is already operational in Sierra Leone, Liberia, the Central African Republic and Benin, with further expansion planned across the region.
The expansion means a system initially developed to support Nigeria’s renewable energy access programme is being positioned as a regional digital framework for planning, funding and monitoring distributed electricity projects across Africa.
