The electricity market is set for a structural reset as new mini-grid regulations expand project capacity limits and reposition distributed power from a stopgap for rural access to a mainstream infrastructure play.

But there are concerns that regulatory overlaps may undermine the gains.

This is according to a new report by Bloomfield titled ‘Review of the Nigerian Electricity Regulatory Commission’s Mini-Grid Regulations 2026: New Architecture, Market Opportunities and Implications’.

The report said a decisive shift from small, isolated systems to larger, interconnected projects capable of feeding into the national grid and attracting commercial-scale investment.

At the core of the reform is a significant increase in the threshold for eligible mini-grid projects from sub-1MW systems to installations of up to 5MW per site, marking what the report described as a transition from very small, isolated solutions to infrastructure that can support clusters of households, commercial users and public institutions.

The report stated: “Mini-grids are no longer treated as very small, isolated systems; they can now be configured as general market platforms capable of coordinating clusters of customers and generation sources across wider geographies.”

This shift comes against the backdrop of Nigeria’s persistent electricity access gap, with millions remaining underserved despite years of grid expansion.

The report noted that the new rules are designed not just to improve access, but also to deepen market efficiency and integration.

It adds: “In a country where electricity access still stands at 61 per cent as of 2021, the continuing challenge is not simply limited connections, but the quality and reliability of supply.”

By enabling interconnection with distribution networks, the regulations also introduce a clearer commercial pathway for developers, replacing what had been a largely donor-driven, fragmented ecosystem.

According to the report, the regulations have introduced a clearer commercial pathway for interconnected mini-grids, improving how projects are structured, financed and integrated with distribution networks.

While the opportunities are substantial, the report highlighted lingering risks, including regulatory overlaps at the state level and the need for stronger institutional coordination following the decentralisation introduced by the Electricity Act 2023.

“Without alignment between federal and state frameworks, there is a risk of fragmented implementation that could deter investment. The Mini-Grid Regulations 2026 are best understood as a structural upgrade of Nigeria’s distributed electricity framework. They expand the size of projects that can operate within the mini-grid regime, strengthen the framework for interconnected systems and reduce procedural bottlenecks that have historically slowed deployment,” the report said.

A key provision is the formalisation of interconnection rights, allowing developers to link projects directly to the grid under defined technical and commercial conditions. This includes standardised agreements and timelines aimed at reducing delays that have historically plagued project deployment.