Ahmad: Nigeria Setting Pace in Deployment of Off-grid Power Solutions

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Mr. Salihijo Ahmad, is the Managing Director of the Rural Electrification Agency. In this interview he speaks about how the agency is intervening in the provision of power to unserved and underserved communities in the country. Emmanuel Addeh presents the excerpts:

Many government outfits and private sector companies appear to be increasingly embracing off-grid as an alternative source of energy. How is the REA collaborating with them?

Apart from the implementing role being played by the REA, our activities and programmes also help encourage industry collaboration, knowledge exchange as well as investments. We do this in collaboration with our development partners as well as key private sector developers. These activities being driven by the REA have continued to educate and enlighten critical stakeholders in government and private sector on the reliability and sustainability of off-grid technologies. REA has continued to stimulate the renewable energy sector in Nigeria while putting developers on their toes to provide and deploy industry-standard off-grid solutions, per time.

With the franchise regulation by the Nigerian Electricity Regulatory Commission (NERC), are their plans to incentivise and woo more Nigerians into the off- grid market.

That is the idea. NERC’s franchise arrangement caters to the electricity distribution sphere of influence and covers metering, billing and collection; total management of electricity distribution function in a ring-fenced area and total management of distribution feeders including billing and collection. There’s also the loss reduction and provision of embedded generation. As a relatively novel technology, the floodgates are open to energy developers in the off-grid market. This is helpful as deliberately aids competition in the off-grid market. With a competitive market, service delivery and quality of deployed systems automatically improves. Remember that under the Nigeria Electrification Project (NEP), there are already well-set funding models such as the Output Based Fund (OBF) for the sale of solar home systems to homes and businesses across Nigeria and the Performance Based Grant (PBG) for the deployment of mini grids to unserved and underserved communities in Nigeria. All these are open to developers in the off-grid market to key in and access funding targeted at powering Nigeria.

Can you take us through your programmes and policies in the REA and how you have gone about implementing them?

The agency’s mandate is the provision of electricity in unserved and underserved communities across the country to catalyse economic growth and improve quality of life for Nigerians. REA is currently implementing the Nigeria Electrification Project (NEP), Energising Economies Initiative (EEI), Energising Education Programme (EEP), Rural Electrification Fund (REF), Energy Database and Capital projects as well as creating the enabling environment for private sector investment in electrification. With a broad understanding of the energy needs of different consumer groups in the country, we continue to deliberately design programmes to cater to these needs and close the energy gap. To impact local economies, we have the EEI designed to support the rapid deployment of off-grid electricity solutions to provide clean, safe, reliable and affordable electricity to economic clusters, e.g market places, shopping centres, industrial areas). To adequately cater to the energy needs of unserved and underserved communities across the nation, the agency secured funding from the World Bank ($350m) and the African Development Bank (AfDB) ($200m). The objective of the NEP is to deploy solar hybrid mini grids to serve over 2 million Nigerians and over 10,000 SMEs as well as deploy solar home systems to 1.5 million households.
We understand how pivotal electricity access in institutions of learning and hospitals is. Under the NEP, we have the EEP, a federal government programme designed to improve educational outcomes through the deployment of clean, safe and reliable energy to 37 Federal universities and 2 affiliated teaching hospitals.

At the REA, we also implement capital projects. These are primarily grid-extension projects the agency had been traditionally known for. It involves grid extension and injection substation projects and now increasingly, solar mini grids, deployment of solar home systems, installation of solar street lighting across all 6 geo-political zones.

There are about 100 million Nigerians who are off the national grid. What is your agency doing to give them access to power?

Achieving REA’s vision requires a focus on bringing electricity to unserved and underserved communities through a sustainable market. This will entail both direct implementation and coordinating broader electrification effort.

For example, the Grid Extension (Capital Projects), whose core objective is to provide affordable, easily accessed, safe and efficient electricity supply to the populace especially in rural settlements across the nation. The projects are broken down into solar mini-grids, deployment of solar home systems, and deployment of solar street lighting, injection substations, and grid extension projects across all 6 geopolitical zones. Like I said, the federal government has secured funding from both the World Bank ($350m) and the African Development Bank (AfDB) ($200m) for three components. The NEP will develop solar hybrid mini grids to serve over 2 million people and over 10,000 SMEs as well as Deploy solar home systems to 1.5million households and improve educational outcomes by electrifying Federal Universities and affiliated teaching hospitals as part of the EEP. So far, we have deployed energy infrastructure to off-grid Nigerians in 3 communities: Rokota in Niger State, Akikpelai and Olobiri in Bayelsa State, with more underway. Under the first call of the Rural Electrification Fund (REF), over 19, 000 Solar Home Systems have been deployed to serve Nigerians off-grid, while 12 communities have been energised through solar hybrid mini-grids. Following the success of the first call of the REF projects, the 2nd REF call is in progress. The agency is currently engaging interested energy developers to help drive this process and deploy more interventions targeted at off-grid Nigerians. For the EEP, it aims to power 37 universities and 7 teaching hospitals by providing independent power plants, 10,400 street lights will be installed across campuses in Nigeria for illumination and security, upgrade of existing distribution networks and world class renewables training centre at every university. Also, over 300 clusters have been identified for electrification across the country in different phases of the EEI.

It is one thing to have these programmes and another to be able to see them through to success… (cuts in)

As an agency that believes in the strategic use of off-grid technologies, we have deployed of off-grid solutions to economic clusters and federal universities across the country. To this end, over 12,000 shops are now receiving clean, safe, reliable and affordable electricity supply. The pilot phase of the EEI has been commissioned at the Sura Shopping Complex Independent Power Project in Lagos state powering 1,047 shops.

So also is the Ariaria Market Independent Power Project, Aba, Abia State, powering over 4,000 shops and we have launched over 6,000 energised shops at Sabon Gari market, Kano State with more connections in the pipeline.

Deployment is currently ongoing in markets under Phase 1 of the EEI. This phase is expected to provide clean, safe and reliable power to 12 markets across Lagos, Kano, Edo, Ogun, Ondo and Oyo.

Two projects have also been commissioned; a 7.1 MW Solar Hybrid Mini Grid at Bayero University, Kano and 2.8MW Solar Hybrid Mini Grid at Federal University Ndufu-Alike Ikwo, Ebonyi State (FUNAI).

In addition to that is the 1.6 Federal University of Petroleum Resources (FUPRE), Delta State, 1.12MW Abubakar Tafawa Balewa University, Bauchi are completed and ready for commissioning while other projects under phase 1 of the EEP are at various stages of completion. The programme will provide reliable power supply to over 580,000 students, 80,000 teaching and administrative staff, 1,400 doctors and 5,500 medical professionals. As a result, 860 harmful diesel-fired generators will be decommissioned.

Are there concerns or challenges from your experience in working with these schools and private organisations?

Since the beginning of the Covid-19 pandemic, the REA has deployed 4 solar mini grids to Isolation centres in Gwagwalada and Ogun State as well as the NCDC Laboratory in Lagos in its bid to support the efforts of the government in containing the Covid-19 pandemic. Following the impact of the agency’s intervention in four Covid-19 isolation centres, a series of engagement between the REA, the World Bank, Federal Ministry of Power, the Federal Ministry of Health and the Nigeria Centre for Disease Control (NCDC) plan to scale up this intervention by energising 100 additional covid-19 centres (Phase 1) and 400 Primary Healthcare Centres (PHC) (Phase 2) across the nation. We intend to scale up on all these interventions to cover more universities and health facilities across the country.

Off- grid solutions are still on the high side, especially given duty paid by the dealers. Are discussions ongoing to reduce the tariff?

Just like we have in many countries deploying mini-grids, we continue to scale barriers as the industry develops. Tariff, for example, can be seen as a barrier, but not to the extent of it crippling the growth of mini-grids. Another barrier we are working fervently to scale is on importation of renewable energy components. Players in the industry have expressed their views on the removal of VAT for solar and renewable energy companies. This is actually a policy issue that we are currently collaborating with other relevant agencies to solve because we believe that if the government continues to drive beneficial policy issues around renewable energy, it will help bring down the cost of renewable energy deployment for private use, business use as well as deployment in communities.

There are stories about how East Africa is advancing off- grid energy solutions, are there lessons to learn from that?

Off-grid solutions is witnessing a rise in adoption in Nigeria with investments coming in from donor organisations such as the World Bank and African Development Bank. I believe Nigeria is setting the pace in the advancement and deployment of off-grid solutions in Africa. Other African countries can learn a lot from what Nigeria is doing. With our unique history of energy poverty in Nigeria, the Nigerian government have taken steps towards steering the nation on the path to improved energy access. The programmes being deployed by the REA, as mandated by the federal government are data-driven, locally developed but globally appealing programmes designed to solve our energy problems, sustainably.

Given the huge investment opportunities in the off- grid electricity market, what is the REA’s message to investors who may want to switch investments to other parts of the continent?

I would say to those investors, stay in Nigeria and keep investing. The federal government is doing a lot towards simplifying ease of doing business in the country. Nigeria is attracting investment not just in the energy space but also in other sectors. The investment opportunities in the Nigeria off-grid market is big. As you are aware, aside having the largest economy in sub-Saharan Africa, Nigeria is one of the best locations in the world for the deployment of mini-grids and solar home systems. Currently, the energy gap in Nigeria is huge. Millions of MSMEs, industries and agencies are being powered by carbon emitting generating sets. What this means is that the investment in clean, safe and reliable energy in Nigeria creates an option for a switch to cleaner, more sustainable energy for consumers. All the agencies are deliberately striving hard to provide an enabling environment for off-grid investors as well as private developers to flourish. We also have the advantage of global attention through funding and technical support in the Nigeria off-grid space. Very few African countries currently deploy forward-leaning, investor-friendly programmes as we do in Nigeria. There is significant rise in the adoption of off-grid solutions with lots of return of investment.

Tell us how the government was able to attract this $350 million from the World Bank and another from the AfDB?

The procedure is simple, we showed them the potential of investing in Nigeria and the growth of the energy sector and they agreed with us. Since the investment from these banks under the Nigeria Electrification Project, several activities have taken place to ensure the success of the programme. The World Bank and the Africa Development Bank are two important stakeholders supporting the federal government’s electrification programme. NEP is private sector-driven initiative designed to provide electricity access to households, micro, small and medium enterprises in off grid communities across the country through renewable power sources. It is being funded by the World Bank through a $350 million loan and a $200 million loan from the African Development Bank World Bank.

The first PBG completed project under the NEP by PowerGen Renewable Energy with 157kw capacity was commissioned on 7th December, 2019 in Rokota Community, Edati Local Government Area, Niger State. The second and third NEP PBG Mini-Grid projects with capacities of 67.32kW each were commissioned on 13th April 2020 at Oloibri and Akipelai communities, Bayelsa state by Renewvia Solar Nigeria Ltd. A total of 921 connections have been achieved so far in households, MSMEs and Public facilities and a total capacity of 198.64kW of energy deployed. In addition, Over 68,000 solar homes systems have been installed in households, MSMEs and public facilities by the 11 companies that have signed grant agreements. The capacities of the system ranges from 6Wp to 75Wp translating to over 2,443kW of installed capacity across the 36 states in Nigeria.