REA: Partnering to Electrify Nigeria’s Underserved Rural Communities
Recently, the Rural Electrification Agency (REA), has ramped up its collaboration with private electricity suppliers, especially in the renewable energy space, to enhance the quality of life of Nigeria’s underserved rural communities, writes Emmanuel Addeh.
Cognisant that waiting for federal government funding alone, may not make the needed impact in the lives of Nigeria’s underserved rural communities as well as selected strategic institutions, the REA is making several collaborations, both local and foreign partners to provide electricity to those who need it the most.
Essentially, the REA is the implementing agency of the federal government tasked with electrification of rural and unserved communities.
To provide access to reliable electric power supply for rural dwellers irrespective of where they live and what they do, in a way that would allow for reasonable return on investment through appropriate tariff that is economically responsive and supportive of the average rural customer.
Its mandate include the promotion of rural electrification in the country, coordination of rural electrification programmes as well as the administration of the Rural Electrification Fund (REF) to promote, support and provide rural electrification through public and private sector participation.
With about 226 million people in the country, burdened with 45 per cent electrification deficit, this leads to the economic loss of up to $25 billion. Its job now clearly cut out, the agency says it is set to unlock the economic potential to the tune of $9.2 billion per annum and cutting the self-generation cost of $14 billion in 10 years.
So, recently the REA went about raising the bar on its public-private agency partnership mandate, first signing deals with Husk Energy, a global leader in decentralised renewable energy systems to deliver 250 megawatts sustainable energy to millions of rural communities in Nigeria.
In addition, in its agency-to-agency partnership, the REA signed a deal with the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) for the provision of clean off-grid power solutions to millions of micro, Small And Medium Enterprises (MSMEs) across the country, who were hitherto constrained by lack of access to power supply.
The partnership deals were signed in Lagos on the sidelines of the ongoing Energy Access Investment Forum (EAIF) 2024, organised by the Alliance for Rural Electrification (ARE).
Not done, it further activated two critical partnerships, including a 350 megawatts Memorandum of Understanding (MoU) with EM-One, an integrated energy solutions and renewable energy company, for delivery of clean and reliable electricity to underserved peri-urban and rural areas in Nigeria.
It also afforded the REA the opportunity to unveils its strategy growth path and plan designed to aid agency realignment while aiding deployment of sustainable utility-scale renewable energy projects.
In the last few years, the REA in collaboration with the USAID/Power Africa Nigeria Power Sector Programme (NPSP) and All-On have also led critical conversations and facilitated strategic collaborations between frontline stakeholders in the off-grid space through the quarterly off-grid stakeholders meeting.
In May, the new management of the REA said it was time to to mainstream the agency’s growth path through a strategic organisational realignment targeted at repositioning the REA to realise its new ambition.
This, it said was hinged on deliberate use of knowledge-driven and data-centric frameworks, which will see the new REA strategy deliver on sustainable, utility-scale scale energy access projects.
With the NPSP closing-out in 2024, the REA has now been officially tasked with the critical responsibility of stakeholder coordination in the nation’s off-grid space.
In it’s strategic plan for 2030, the agency seeks to provide over 25 million Nigerians with access to electricity, take power to 850,000 female-headed households and small businesses.
This it seeks to do, with over 700 PV capacity deployment and commissioning of 3,000 mini-grids which will lead to the creation of over 1 million direct and indirect jobs. It also projects private investment of $17.8 billion between now and 2030.
The 250MW Husk Deal
The MoU signed between the two entities, the agency said, marked a significant milestone in Nigeria’s journey towards universal energy access and sustainable development.
At the event, the organisers said the partnership between REA and Husk Energy aims to establish a long-term strategic relationship that sets a global benchmark for scaling the deployment of decentralised solar power projects, otherwise known as mini-grids in Nigeria.
The projects are designed to electrify peri-urban and rural communities, including markets, businesses, households, public institutions, health clinics, and schools, in both weak grid and off-grid areas.
The strategic collaboration also marked a significant step forward in REA’s ambition to create “utility-scale” renewable energy companies.
Leveraging the Distributed Access through Renewable Energy Scale Up (DARES) project as a catalyst, the REA said it aims to transform conventional project developers into service-oriented entities capable of constructing resilient infrastructure and delivering energy services on a large scale.
This strategic partnership with Husk Power, the REA stressed, signalled their commitment to empowering companies to develop a diverse portfolio of mini-grid projects nationwide under the RESCO ethos, thereby significantly advancing our mission of achieving universal energy access in Nigeria.
According to the organisation, the partnership focuses on the deployment of up to 250 MW of Interconnected Minigrids (IMGs). These IMGs, the agency explained, will address the critical need for reliable and affordable electricity in both weak-grid and off-grid areas, aligning perfectly with the “renewable energy scale up” theme of the REA’s DARES project, supported by the World Bank.
Beyond Electricity: Holistic Approach to Energy Access
The REA-Husk Power partnership extends beyond just electricity generation and looks to deepen the impact of energy access in the connected communities through the scaling up of Productive Use of Equipment (PUE) and alignment of value chains to facilitate rural economic growth.
Besides, the MoU sets the stage for cooperation in implementing cutting-edge energy service models like Virtual Power Plants (VPPs), aimed at enhancing energy efficiency and grid reliability.
This collaboration will lead to the introduction of value-added products and services within the IMG franchise areas. These offerings encompass various initiatives such as: Energy-efficient appliance sales and financing, E-mobility solutions, Agricultural processing and cold storage as well as E-cooking solutions.
Global Best Practices
The groundbreaking partnership between REA and Husk Power, the parties stressed, is designed to be a global best practice for scaling up decentralised solar power solutions in a sustainable manner, both financially and environmentally.
The customer-centric approach ensures communities are at the heart of this initiative, with access to not only electricity but also the tools and services to maximize its benefits.
REA Managing Director, Abba Aliyu, said of the deal: “This MoU signifies a major leap forward in our vision for creating a network of RESCOs that can deliver clean and reliable electricity to even the most remote corners of Nigeria.
“Partnering with a proven leader like Husk Power positions us to not only achieve our ambitious deployment goals but also establish a model that can inspire others around the world.”
Also, Manoj Sinha, Husk Power Co-Founder and CEO: “We are incredibly honoured to partner with the REA on this groundbreaking initiative. The combination of REA’s commitment and Husk Power’s expertise creates a powerful force for positive change.
“This partnership will not only deliver electricity access but also empower communities to thrive through the introduction of innovative energy solutions.”
The 350MW EM-One MoU
Building on its commitment to achieving universal energy access through Renewable Energy Service Companies (RESCOs), the REA) also signed a historic agreement with EM-One, a leading integrated energy solutions and renewable energy company.
This, it said, represented a significant step forward in realizing the REA’s vision of a robust network of RESCOs delivering clean and reliable electricity to even the most remote corners of Nigeria.
The partnership with EM-One, alongside the previous agreement with Husk Power signed at the Energy Access Investment Forum (EAIF), it said, brought the total combined commitment to a staggering 500mw of renewable energy delivered through mini-grids. This signifies a major leap forward in the REA’s vision for a network of RESCOs that can empower underserved communities across Nigeria.
The MoUs, REA said, also paves the way for cutting-edge technologies like smart grids and decentralised systems to be integrated with IMGs. The integration of such technologies will increase grid visibility, optimise power flows, and enable large-scale grid interconnection of renewable energy, ultimately modernising Nigeria’s energy infrastructure and ensuring efficient energy distribution.
Beyond community electrification, the REA said it is also exploring the electrification of health facilities with dedicated solar mini-grids. This initiative, along with the promotion of other value chain enhancing productive-use cases such as electric vehicles (EVs) for sustainable transport solutions, the agency pointed out, further demonstrates the REA’s commitment to a holistic approach to achieving sustainable development in Nigeria.
Again, Aliyu, expressed enthusiasm about the partnership, stating: “This collaboration with EM-One is a significant step towards our goal of universal energy access in Nigeria.”
He added: “By scaling up renewable energy projects and supporting RESCOs, we are not only addressing the immediate energy needs of our communities but also fostering long-term economic growth and environmental sustainability.”
CEO of EM-ONE, Mir Islam, highlighted the innovative aspects of the partnership, stressing that: “We are excited to work with REA to bring cutting-edge technologies like smart grids and decentralised systems to address the challenge of energy access in Nigeria.
“These solutions will not only enhance energy efficiency but also ensure that renewable energy can be reliably integrated into the national grid at scale.”
This partnership with EM-One, combined with the earlier agreement with Husk Power, sets a new global standard for expanding access to clean energy through decentralized solar solutions.
By prioritising the needs of local communities, this initiative goes beyond simply providing electricity. It empowers communities with the tools and resources they need to maximize the benefits of renewable energy, it said.
Ramping Up Support for MSMES
In a significant step towards achieving universal energy access and accelerating Nigeria’s energy transition, the REA and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) also signed an MoU.
The strategic partnership, it said, marked a crucial step in unlocking the growth potential of Micro, Small, and Medium Enterprises (MSMEs) by providing them with access to reliable and sustainable alternative energy solutions.
The collaboration between REA and SMEDAN directly aligns with REA’s long-held ambition of providing clean and dependable energy solutions that drive socio-economic development, particularly in underserved areas. With the recent surge in fuel prices, the need for MSMEs to adopt more cost-effective and sustainable energy solutions, the REA said, is more critical than ever.
Among others, the partnership aims to empower MSMEs with clean energy access, enabling them to: reduce energy dependence on rising fuel costs, boost efficiency and productivity, enhance profitability, promote environmental sustainability and build a stronger, more sustainable economy.
Beyond the immediate benefits, the REA-SMEDAN partnership aims for long-term economic empowerment and a sustainable future.
By championing locally produced renewable energy technologies, the collaboration fosters job creation and supports the growth of Nigeria’s clean energy sector, further advancing the nation’s energy transition.
Aliyu added: This MoU with SMEDAN represents a significant step towards universal energy access and advancing Nigeria’s energy transition. By empowering MSMEs with clean and reliable energy, we’re not only fuelling their growth but also contributing to Nigeria’s broader economic and sustainability goals, particularly in the face of rising energy costs.’”
Director-General of SMEDAN, Charles Odii, on his part, highlighted the agency’s strategic focus, stressing that: ‘’Our collaboration with REA perfectly aligns with our mission to create a thriving and sustainable MSME sector.
“Access to clean energy is essential for small businesses to flourish, and this partnership ensures they can operate more efficiently and sustainably, while playing a key role in Nigeria’s energy transition.”
SMEDAN focuses on promoting and facilitating the development of MSMEs by providing business development services, access to finance, market opportunities, and capacity-building programmes.
