Agric Productivity in Nigeria
The Rural Electrification Agency (REA) is the federal government’s body responsible for providing electricity to rural communities in Nigeria. In this interview with Emmanuel Addeh, the Managing Director of the agency, Ahmad Salihijo, draws a nexus between access to electricity and economic development. He also harps on the determination of the agency to unlock agricultural productivity in Nigeria through the provision of power to unserved communities for productive uses. Excerpts:
Your agency focuses on rural electrification and in implementing your mandate, several households benefit from improved livelihoods. Could you tell us how your agency is contributing to this?
Primarily, the Rural Electrification Agency (REA) is an implementing agency of government, set up through the Electric Power Sector Reform (EPSR) Act of 2005, and is under the supervision of the Federal Ministry of Power. The agency is mandated to provide power to the unserved and underserved Nigerians nationwide.
In the last few years, the agency has strengthened its engagements with private sector developers and other key stakeholders to deploy off-grid technologies for electrification, especially for productive use and economic impact in off-grid communities. With the availability of sustainable energy infrastructure in off-grid communities, energy access presents many opportunities for human development and socio-economic implications.
There is a natural nexus between electricity access and economic development. We ensure that once we can intervene in a community, we don’t just provide the electricity; we try to see how that electricity translates into enhancing livelihoods. We achieve this through proper community sensitisation and by introducing productive use models and equipment.
When you go into communities, do you have economic development in mind?
As I mentioned earlier, we all know the role of electricity in economic development. So, even within urban areas, we realise that most of our activities are linked to electricity. It is the same thing you find when you look at rural communities. Some of the things we had to do when I came in as the MD of REA was to see how to continue to ensure that our activities result in real impact in the lives of everyday people.
One of the major things that we had to understand is that we needed to invest in infrastructure that would enable us to generate power in rural communities. So, one of the key areas we looked at was agriculture. Just because we understand that once you provide power in the agriculture space, you are naturally empowering people to go into farming, which enhances their livelihoods.
To achieve such impactful results consistently, we must keep track of usage after providing that power. We follow up to see how that power is being used. This is why beyond providing power in off-grid communities, we equally dedicate time and resources towards the Productive Use of Energy (PUE). So, some of our programmes are designed strictly for effective use.
For instance, within the Nigeria Electrification Project (NEP) and with support from the African Development Bank (AfDB), we have been given about 20 million dollars to invest in productive-use equipment and models in off-grid communities. And for the times that we have also gone around some of our existing mini-grids, we have seen that developers also provide additional funding from their funding mechanism to support productive use, seeing how economically viable this model of ours has become and how it encourages energy use in off-grid communities.
When you talk about power, is it just solar or other forms of energy?
When you talk about the provision of power, what is critical is to understand the energy needs of individual communities, the type of technologies to deploy, and other social and economic factors. For example, when powering a neighbourhood less than 5km away from the grid, what makes sense will be to extend the grid depending on the type of distribution or transmission line you have. You can deploy a transformer that steps down that power to enable a rural community to use that power.
However, there are situations where you cannot do that when you are 20km/25km away from the grid, which means that extending the grid will not make much economic sense. In that situation, we try to deploy some decentralised off-grid technologies like a solar mini-grid, enabling the community to generate and consume power in a decentralised way.
Also, some communities are totally off the grid and have a tiny population. Here, households are dispersed, and their power needs are meagre. We address such with the use of solar home systems. What has informed the usage of these technologies is that solar technology is very easy to deploy, reliable, and clean, as I mentioned. So these factors have helped us make data-driven decisions in the nationwide electrification of communities.
Also note that in farming clusters where you have irrigation farmers, we now deploy solar-powered irrigation pumps, enabling farmers to nurture their farmlands using renewable energy efficiently.
Through the Agency’s Research and Innovation hub, we continue to encourage R&D to improve capacity for innovation and proffering smart, sustainable energy solutions to the nation’s energy problems.
What is the process of distributing these technologies? Is a down payment made or how do they get it?
Through the REA, we have been in a position to provide power through various funding mechanisms. For example, we provide power through what we have in the capital budget. So, with those provisions in the capital budget, we don’t expect anything from the rural communities except building a sustainability plan with the Rural Electricity Users Cooperative Society (REUCS). This sustainability mechanism allows community members to coordinate and sustain the infrastructure.
However, as you have mentioned, we give certain kinds of funding to support only a private developer. These come in different forms – we have the Rural Electrification Fund, which we support through capital subsidies. We work with developers hand-in-hand to deploy the infrastructure, and during the time of deployment, we give them (within their milestones) maybe a 50 – 60 per cent subsidy on their capital.
And then we also have result-based financing through the World Bank and the African Development Bank-funded Nigeria Electrification Project, where we provide funding after the developer has deployed the infrastructure and is providing a service. We give them $600 per connection.
So, to answer your question, the end-user’s expectations will differ depending on the funding mechanism. In areas where the government is providing that infrastructure as social development, what they will be required to pay based on the sustainability plan will be much less because the infrastructure has already been provided. However, in areas where we are only providing a grant or subsidy, the rural dwellers are expected to pay for that power through a tariff system that we usually work with, which is in line with the Multi-Year Tariff Order (MYTO) of the NERC.
How do you target your interventions to lead to economic development? How does REA work to achieve these improved livelihood interventions at the rural level?
As I mentioned earlier, I think the major way we have been doing this has been through productive use and ensuring that we have the productive use equipment models within those communities. So, recently, we visited a community in Gwagwalada called Kaida, where we built a 100kWp solar hybrid mini-grid that mainly supports the agricultural processing of food such as rice and maize.
We visited a similar one a few weeks ago in Gurin, Adamawa State, where the community is very strong on rice processing and are equally now powering their processors with the community’s 100kWp solar hybrid mini-grid deployed by the REA.
So, we’ve been doing this by looking at a particular sector and intervening within that sector. Right now, the major thing we do is around agriculture, around economic clusters like markets where we are deliberately targeting power to those key clusters; agriculture and local economies.
One of the major reasons we must even do this is the need to be in areas with a lot of economic activities, as this would encourage the rural dwellers that are using this power to have the resources to afford it. One recent trend that we also noticed is many activities around border communities. International border communities have been recognised within the country, where today, we have extended our impact to such areas.
We visited one such community in Adamawa State, a community called Belel, a vibrant border community, one of the tops internationally recognised land borders. It became obvious that the community could afford and pay for the power that was being given to it.
In this particular community, we are already discussing the expansion of the infrastructure due to population growth and usage. So, with the kind of business modules that we currently have, what is very clear is the need to situate those projects around areas that have economic activities deliberately – this is what makes the entire project sustainable and viable for the private developer.
The agency is also implementing the Energising Agriculture Programme (EAP), designed to boost GDP, accelerate renewable energy use and unlock agricultural productivity in Nigeria. The EAP is a three-year initiative activated in 2022 with support from the Rocky Mountain Institute (RMI), the Global Energy Alliance on People and Planet (GEAPP), and the Rockefeller Foundation, designed to enable market-led solutions while breaking the silos separating electrification and agricultural development.
Currently, the delivery of the EAP is underway, with data-driven groundwork such as surveys and holistic assessments being carried out by a team of enumerators, assessing viable clusters across the country.
Still going back to your question on energy access for economic development, we have witnessed tremendous improvement in previously unserved communities now powered by renewable energy. An example of such impact is in the Olooji community, an Ogun State, where we have a 100kWp solar hybrid mini-grid. Olooji is a community that has existed for about 200 years but received energy infrastructure for the very first time in 2021 through REA’s intervention. The community continues to record socio-economic growth due to that mini-grids’ functional and productive usage.
There is also an example of another 80kWp solar hybrid mini-grid constructed in Upake, Kogi state, known as the ancestral home of Ebira land. Upake community became the first community energised with a solar hybrid mini-grid under the REA’s Rural Electrification Fund (REF) Call 1.
As these projects are being constructed, the agency is equally increasing the number of renewable energy jobs in Nigeria while improving training and capacity development, especially amongst residents in off-grid communities. Implementing the agency’s programmes and initiatives has created thousands of jobs.
Do you also dwell on areas other than agriculture and ventures such as local manufacturing and bakery?
Indeed, we only use agriculture as an example to drive productive use in communities because agriculture is a joint venture all Nigerian communities share. When we go into a community, we naturally study its energy needs and vital economic activities. And as you have rightly said, we have seen examples of small and medium-scale enterprises thriving in these communities. We find people running shops and powering their refrigerators to sell cold drinks within their communities. That, on its own, is a commercial hub that can catalyse local economies.
We are, therefore, not restricted to providing energy access for agriculture alone. Our key mandate is to provide energy access depending on the significant economic activities we find within a community. Then, the availability of access and its utilization by the community now catalyse productive activities.
For example, after the deployment of the 90kWp solar hybrid mini-grid now providing sustainable energy in Kare, Kebbi state, a one-of-a-kind renewable energy-powered greenhouse is currently active in this community, designed through the NEP productive use component. Through this greenhouse, the community is now harvesting green pepper.
We’ve also built a 100kWp solar hybrid mini-grid in Wakili Gurin, Adamawa State. This community is leveraging access to sustainable energy through this mini-grid to energise a community rice mill and other local businesses.
Another key area I want to draw your attention to is healthcare. Through the provision of renewable energy infrastructure in primary healthcare facilities and isolation centres across the nation, most of those facilities have gone from spending N100,000 a day on diesel to delivering quality, prompt healthcare services powered by renewable energy infrastructure deployed by the REA.
Under the Energising Education Programme, REA has completed projects in seven universities; how important is it to not go into only underserved communities but also into schools where the lives of students are impacted?
In the course of the growth of the REA, we have found ourselves intervening and closing the energy access gap in education under the guidance and supervision of the Federal Ministry of Power. Due to the critical role energy access plays in national development, we are in a position to work closely with multiple sectors, where some of these needs are identified by the ministry, as a policy maker, with the REA as an implementing agency delivering on those projects.
So, these are very important, as you’ve mentioned. Education is key, and learning is critical to the country’s development. This prompted the federal government, through the REA, to make these sorts of interventions, mainly because the universities form a very important part of a country’s development value chain.
Those projects you mentioned are delivered under the 1st phase of the Energising Education Programme (EEP). Seven of the nine beneficiary universities in this phase have been energised with funding from the Green Bond. Five out of the seven completed EEP projects were delivered between 2020 and 2022. We have gone to all of them and officially handed them over to the beneficiary universities upon completing the contractual one-year operations and management of those plants.
Beyond accelerating the delivery of these projects, within this period, the World Bank and the African Development Bank have equally committed to funding phases II and III of the EEP, respectively. These phases will energise 15 additional Federal Universities and two affiliated University Teaching Hospitals.
We’ve gone into the procurement phase for nine different institutions under phase II, with funding from the World Bank. The African Development Bank has equally committed to funding eight EEP projects scheduled for phase III of the Programme. This Programme is critical in our work, and we will continue to see how we can support the education sector.
With a focus on economic development, how many households have you impacted so far?
So far, across all our programmes, we have achieved about 6.7 million connections, impacting nearly 10 million Nigerians. Specifically, we have affected more than 1 million Nigerians through the Nigeria Electrification Project (NEP) solar home systems component alone. The mini-grid component of this programme has equally been very successful, with over 65 solar hybrid mini-grids completed nationwide. The programme is now an exemplary off-grid model in sub-Saharan Africa and has achieved about 5 million connections.
The agency delivered over 95 per cent of the NEP impact between 2020 and 2022. The NEP-SHS component is equally one of the fastest-growing components being implemented by the agency. These projects have also catalysed socio-economic activities across the beneficiary communities.
Due to the multi-dimensional impact of energy access, vis-à-vis REA’s different programme mechanisms, the agency continues to expand its footprint across off-grid communities nationwide. Under the agency’s programmatic framework, we are birthing impactful projects across the nation, targeted at socio-economic impact, productive use, and direct impact on livelihood.
These projects are equitably deployed to provide energy to underprivileged citizens and communities, agricultural clusters, and homes in off-grid communities using mini-grids, solar home systems, solar streetlights, and solar-powered irrigation pumps. Under this particular framework, one mini-grid was deployed in each geo-political zone, 6 in total in 2022. Equally, about 1 240 solar-powered streetlights, over 2 000 solar home systems, and 1 392 solar powered-irrigation pumps have also been installed and are in use.
Over 300,000 female-headed households have been electrified, and 1,206 female-headed MSMEs have been electrified.
What sectors is your work impacting the most?
We have talked about some of the sectors: healthcare, agriculture, and education are the key sectors we have been impacting through off-grid electrification. Also, commercial hubs, markets, shops, and MSMEs are being affected. So, we find ourselves in this unique position because power is needed everywhere, and it doesn’t get to the rural communities all the time. We find ourselves a very crucial agency that can facilitate the provision of power in these areas, enabling us to impact healthcare, education, and commerce.
But with healthcare for instance, during the time of the unfortunate situation of the COVID-19 pandemic, what the agency quickly had to do was come up with a programme that could serve the health sector during the pandemic and beyond. We have been constructing 50KW hybrid solar systems to ultimately serve 100 isolation and treatment centres and 400 Primary Healthcare facilities across the country.
Recently, I have had the privilege to visit some of those centres, and I have discovered that some of them now have access to 24 hours of electricity, especially to power some of their critical equipment like ventilators and refrigerators and other kinds of equipment critical to healthcare delivery such as theatres, clinics and laboratories.
Having that reliable and sustainable power in healthcare facilities is very important. We also have it on record that many of them have made lots of savings using renewable energy compared to what they usually pay for diesel.
They have also been able to run more efficiently because, when there is an emergency, they cannot act immediately because they might run out of diesel and there’s no power, and they might need to get diesel. Also, they can’t deliver quality medical services during emergencies when they need to move quickly and the generator decides not to function correctly. These are some of the areas within healthcare that we have been able to intervene in.
When the agency distributes power, is consumption rate its key focus? What are the metrics?
It just depends on the programme. When you say “distribute,” you know you sometimes don’t distribute. You construct a power plant (50KW or 100KW, for example) and now use the power plant to distribute.
There are times, too, when you give out solar home systems, so for that kind of system, you consider Nigerians who have been affected by the flood, Nigerians who have been affected by some natural disasters, or have been internally displaced.
In that kind of area, we work closely with other government agencies; for instance, we have worked with the National Commission for Refugees and Internally Persons, an agency that manages the affairs of refugees, migrants, and internally displaced persons in Nigeria. We also work with state governments to see how we can ensure that some of our interventions are going to the people who require them.
Recently, we also worked with FADAMA, where we distributed solar pumps to irrigation farmers. As stated earlier, the REA is working with the Federal Ministry of Agriculture and Rural Development through the FADAMA programme to locate and deploy these systems effectively.
As I have previously explained, the key metric for us is productive use and socio-economic impact. Proving energy access should, beyond keeping the lights on, activate transformative change. This is why we continue to work with beneficiary communities and developers to see the bigger picture and possibilities citizens can explore upon the availability of sustainable energy in off-grid communities.
How do vulnerable women and female heads of households benefit from your work?
To date, under the Nigerian Electrification Project, over 1,500 female-headed households have benefitted and electrified. We have to give credit to women because, in every community you go to, you find out that women are the ones running the community as a whole; they run businesses, and they are the ones that go to farms.
I have also been privileged to visit a few of these businesses where women run corner shops, where the power we provide allows them to refrigerate their goods. We take some things for granted today in the urban areas where we can have a cold drink on a hot day. But most of our brothers and sisters in rural areas have to make an effort to enjoy such.
When I interviewed one of the women, and I asked her what difference the power provided by the REA made to her, she said to me that before now, she had to walk a few kilometres to be able to buy ice blocks to bring back to the community. She uses the ice block to store her drinks.
What you realise is that after a few hours, that block will melt, meaning that when you come, and you’re trying to have a cold drink, you can’t, which affects her economic activity. We have several such examples. In the Kaida community of FCT, a 100kWp solar hybrid mini-grid was installed. This has allowed the women in this community to power their stores and refrigerate their products through the mini-grid. In a previously unserved community, Kaida business owners depended on bulk ice block purchases to store their drinks for sale. This impacts women, mainly because we have also seen that most women are leading their households in providing their day-to-day living expenses.
What impact is your work bringing to the country’s GDP?
Naturally, energy plays a vital role in socio-economic development, per capita development, and industrial growth. Therefore, there’s a nexus between sustainable energy and Gross Domestic Product (GDP).
How do you select the communities that you work in?
Data plays a very key role here, especially on community energy needs. Also, depending on the programme through which these projects are being implemented, commercial viability has to equally be considered to enable private sector players to recoup investments. We also ensure that the impact being delivered by the REA is equitably paid.
We have a lot of data points, especially through the Central Data Management System currently piloted and managed under the Federal Ministry of Power. Once that data comes to us, we also need further studies. Depending on how we are bringing in that money to fund that project, we ensure that the areas where we will send developers have the required economic activities to ensure that once we deploy a mini-grid through private sector developers, they can recoup their money.
Due to the Federal Government’s interest and dedication towards improving energy access in unserved and underserved communities nationwide, communities are selected and energized to accelerate poverty alleviation and promote socio-economic growth.
We also have to key in naturally to some existing government programmes. Like just recently, we keyed into the federal government’s poverty alleviation programme that was launched. We were working hand-in-hand with them based on their research, and we came in to provide power to some areas that have been identified under that particular Programme.
Sometimes, we also work closely with state governments. In as much as we know that there is data, sometimes state and local governments also play a very key role in helping us identify some of these critical areas that don’t have power.
We receive requests from community groups, CSOs, and other active citizens about communities where they feel the REA mandate will work. This feedback is treated with utmost attention as it forms part of our data.
Can you share some key impact data on some of your projects?
Just recently, we released our impact report for the years 2020 to 2023, detailing the projects that we have done. However, this process is continuous, and we are looking to improve on having that kind of data and case documents across different dimensions readily available.
Across all our programmes, we have a list of all communities that we have gone to, the amount of power that we have taken to those communities, the amount of connections achieved, the amount of population that we have been able to impact, the kind of economic activities currently being carried out in those kinds of locations as well.
Because most of the programmes we run are private-sector-driven, private-sector players and investors even need this information to build the case for unique community interventions.
For example, as part of the REA’s deployment of renewable energy infrastructure in medical institutions across the nation, Ganye General Hospital in Adamawa State is now sufficiently powered, improving medical service delivery, saving patients, and cutting down on energy costs.
The Chief Medical personnel and the hospital accountant confirmed that they have gone from N100, 000 a day diesel budget to an energy budget using the mini-grid. This has also significantly reduced their response time, even for patients who come in at odd hours. This is under the “COVID-19 and BEYOND” programme I spoke about earlier.
These medical facilities are being energised nationwide. Just a few weeks ago, we confirmed that 14 medical facilities are now being fully powered in South-South Nigeria through this Programme, and this is the sort of feedback we continue to receive across all geo-political zones in the nation on this programme.
Equally, through the programmatic framework where we have deployed solar-powered irrigation pumps, solar home systems, and solar streetlights, farmers have recorded a 30 per cent+ increase in yield through the use of these interventions, a 50 per cent+ increase in profitability for farmers due to the transition to a more affordable, renewable source of power, easy accessibility of the solar-powered water pumps for women and youths to get into farming, at least 2+ active women farmers in each cluster who are beneficiaries of these pumps.
The Nigeria Electrification Project has delivered over 60 solar hybrid mini-grids nationwide, delivering about 52MW PV capacity. We have equally crossed the 1 million connection mark on solar home systems under this programme. As part of our efforts on productive energy use, we have piloted about 36 effective use equipment, including a one-of-a-kind renewable energy-powered greenhouse.
How important is a partnership?
Generally, the Rural Electrification Agency is a hub and a facilitator for some of these critical engagements in the off-grid sector. Public, Private Partnership (PPP) is essential in our work at the REA because the agency is centrally positioned to partner and collaborate with private sector players and other government agencies and ministries to deepen the impact of energy access.
These partnerships enable us to explore the possibilities in the ecosystem. For example, ongoing conversations will help the Rural Electrification Agency. By extension, the Federal Ministry of Power and the entire of Nigeria have designed a framework that will enable some of these projects to be rolled out to benefit from carbon credit. We are working on that with Carbon-AI to add another funding mechanism to ensure that our projects are sustainable.
Most programmes and initiatives impacting lives across the nation were initiated and implemented through productive and strategic partnerships.
What next should we expect from the REA?
What has become clear is that in the last three years that I have been there, we have been able to look at what REA has been doing well before I came, and we have tried to continue along that path while improving the agency’s mandate and service delivery. We have also tried to look at some areas of improvement to see how we can design programmes that would cater to those kinds of improvements.
But I think in terms of a way forward, we have demonstrated that we can scale our programmes. We have looked at each of these models, and I can confidently say that we have built a successful and sustainable project for each model. So if you are looking at designing projects through the capital budget, we have now gone into a programmatic way of budgeting.
We are looking at particular thematic areas as we talked through: agriculture, commercial activities, and powering commercial hubs. At least, we can demonstrate that those projects can be done in a certain manner and successfully implemented. And when you look at private sector-driven projects, we have proven that we can give capital subsidies through the REF and result-based financing through the NEP.
It is undeniable that the REA will play a very key role in helping the entire country achieve its net zero aspirations because we have demonstrated through these programmes that we can accept funding through private developers, through the grant systems, where we are scaling up projects and encouraging productive-use while cutting down on carbon emission.
The plan is to continue delivering these projects professionally and ensure that productive use is critical to scale the economic impact we have been discussing. Also, we’ve continued to reach out locally and globally as well, to continue to find funding facilities.
And, of course, we will continue to build a pipeline of projects under the Energising Education Programme II and III; we are doing another REF Call, III very soon, then the Energising Agriculture Programme (EAP), African Mini Grids Programmes (AMP), the Energising Economies Initiative (EEI). We look to leveraging all these programmes to impact Nigerians and provide power to communities, one community at a time.
