By Chineme Okafor in Abuja with agency report
British business magnate and founder of Virgin Group, Sir Richard Branson, has offered a rare business review on the huge opportunities that global investors could take advantage of in Nigeria’s renewed efforts to connect over 80 million of her citizens currently without any form of electricity.
Writing on his personal blog, Branson, described recent reports that Nigeria’s mini grid electricity sector could yield profits in excess of about $9.2 billion to investors, as encouraging.
Although, he did not state if he would be making any investments in the sector, Branson, however suggested to investors in mini grid power systems to head to Nigeria in 2018 if they were interested in taking from the $9.2 billion potential profit it offered.
“Energy access in Africa is close to my heart. Bringing clean, renewable power to people instead of building coal-fired power stations is absolutely essential if we are going to tackle climate change,” said Branson, in the review THISDAY obtained in Abuja yesterday.
He explained that: “Developing off-grid alternatives to complement the grid could create a $9.2B/year market opportunity for mini-grids and solar home systems that will save $4.4B/year for Nigerian homes and businesses. And there is large potential for scaling – installing 10,000 mini-grids of 100kw each can occur for 10 years and only meet 30 per cent of anticipated demand.
“The combination of large revenue opportunity (USD $9.2 billion per year), a supportive government, and a dynamic entrepreneurial environment unite to make Nigeria the ideal location. If you are an impact investor that wants to make a difference in energy access next year, I’d suggest a trip to Nigeria.”
He stated that even though investors have viewed the market for mini-grids as being too risky, making gaining access to project financing rare, and market rate debt expensive, he was, “really thrilled to hear this week that the Rocky Mountain Institute may have cracked the problem with their partners, the Nigerian Rural Electrification Agency and the World Bank.”
According to him, the organisations released an independent investment brief that touts Nigeria as the nation which can now unlock the nascent mini-grid market in Africa in 2018.
“Nigeria is the biggest and most attractive off-grid opportunity in Africa. It has the largest economy in Sub-Saharan Africa (GDP of $405 billion), a population of 180 million people, and flourishing growth (15 per cent a year since 2000).
“A significant amount of the economy is already powered largely by small-scale generators (10–15 GW) and almost 50 per cent of the population have limited or no access to the grid. As a result, Nigerians and their businesses spend almost $14 billion annually on inefficient, polluting and noisy generation that is expensive, and suffers from poor quality,” Branson said in his review.