The ever increasing and continuously unpredictable fluctuating diesel prices that power electricity generation has detrimental impact on the business climate in an area that fights to move away from recovery of post-conflict situation to a relatively rapid economic development. In view of this, this paper aims to investigate the possibility of supplying electricity from a renewable energy-supplemented hybrid system to Hargeisa, Somaliland׳s major urban center. The city has yet to establish its own standard modern electricity grid. Because of the great need to reduce energy costs in Somaliland, a feasibility study has been carried out on how to supply electricity to a sampled residential load. The electric load consists of only a primary type that is in-line with the present electricity consumption in the area. A software tool, hybrid optimization model for electric renewables (HOMER) is used for the analysis. The results of the techno-economic analysis indicate the economic prospect of achieving a 58% of renewable energy (RE) penetration. This consequently reduces the cost of energy (COE) by 30% and the total net present cost (NPC) of the simulated system by a further 25% as compared to a current diesel-only microgrid. The deployment of a hybrid microgrid shows the viability of a better economic prospect than the current “business-as-usual” scenario in Somaliland.