International solar companies are unlikely to enter Niger in the near future. These players currently consider other markets more attractive, based on considerations such as regulatory environment, size of addressable market, as well as availability of partnerships for sales and distribution (including MNOs). As a result, scaling solar in Niger will likely need to be a effort in the short term, with sales, distribution, and end-consumer service channels set up by local businesses. on this assessment of the Nigerien market, we believe significant government and development sector support for the solar market will be required to accelerate private sector growth. At present, neither the supply side, the financial sector, nor end-consumers appear ready to drive solar market growth in the absence of significant intervention. In particular, we recommend focusing interventions on market stimulation for smaller household systems and solar pumping kits. Solar businesses serving institutional clients and large corporates are generally able to secure project financing from banks, and these sectors are mostly based on discrete tenders and contracts that are less suitable for rapid, market-led growth initiatives. Furthermore, businesses serving institutional clients will likely enjoy collateral benefits from systemic interventions aimed at unlocking household and irrigation markets. Table 28 summarizes our recommendations: Table : Recommended interventions for standalone solar systems Intervention Description Rationale (in short) Tax exemptions Make solar products exempt from VAT Currently to solar companies are on and import duties artificially inflated by high import duties; technology these costs are passed on to customers, making solar less affordable. Consumer Widespread, multi-channel consumer Overcome negative consumer education education and benefit awareness perceptions and build benefit awareness programs building campaigns Influence purchase decisions and ease Target end-users and the supporting access to distribution channels ecosystem including distributors and retailers Coordinate efforts of private, public and development sector Inventory Concessionary credit line so financial Long inventory financing periods present financing facility institutions (FI) can access liquidity for a key challenge to growth for solar (IFF) solar market lending lantern and solar home system distributors FI use liquidity to offer solar companies loans (potentially at subsidized rates) to High upfront financing requirements refinance inventory holding present a key challenge to distributors of larger PV systems (including pumps) Loans available to all solar companies (small household systems, larger PV installations, and mini-grids)
International solar companies are unlikely to enter Niger in the near future. These players currently consider other markets more attractive, based on considerations such as regulatory environment, size of addressable market, as well as availability of partnerships for sales and distribution (including MNOs). As a result, scaling solar in Niger will likely need to be a effort in the short term, with sales, distribution, and end-consumer service channels set up by local businesses. on this assessment of the Nigerien market, we believe significant government and development sector support for the solar market will be required to accelerate private sector growth. At present, neither the supply side, the financial sector, nor end-consumers appear ready to drive solar market growth in the absence of significant intervention. In particular, we recommend focusing interventions on market stimulation for smaller household systems and solar pumping kits. Solar businesses serving institutional clients and large corporates are generally able to secure project financing from banks, and these sectors are mostly based on discrete tenders and contracts that are less suitable for rapid, market-led growth initiatives. Furthermore, businesses serving institutional clients will likely enjoy collateral benefits from systemic interventions aimed at unlocking household and irrigation markets. Table 28 summarizes our recommendations: Table : Recommended interventions for standalone solar systems Intervention Description Rationale (in short) Tax exemptions on technology Make solar products exempt from VAT and import duties Currently to solar companies are artificially inflated by high import duties; these costs are passed on to customers, making solar less affordable. Consumer education programs Widespread, multi-channel consumer education and benefit awareness building campaigns Target end-users and the supporting ecosystem including distributors and retailers Coordinate efforts of private, public and development sector Overcome negative consumer perceptions and build benefit awareness Influence purchase decisions and ease access to distribution channels Inventory financing facility (IFF) Concessionary credit line so financial institutions (FI) can access liquidity for solar market lending FI use liquidity to offer solar companies loans (potentially at subsidized rates) to refinance inventory holding Loans available to all solar companies (small household systems, larger PV installations, and mini-grids) Long inventory financing periods present a key challenge to growth for solar lantern and solar home system distributors High upfront financing requirements present a key challenge to distributors of larger PV systems (including pumps)
Niger-Off-grid-solar-market-assessment.docx