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Interview with Damilola Ogunbiyi, Managing Director of the Nigerian Rural Electrification Agency

As the Managing director of the Nigerian Rural Electrification Agency (REA), what are your top electrification priorities? How do clean energy mini-grids feature in your plan?

The primary objective of Rural Electrification Agency (REA) is increasing electricity access to rural and underserved clusters across the country. To achieve this objective, the REA has developed the off-grid electrification strategy. The strategy focuses on decentralised off-grid solutions and captures the following elements:

I. Solar Stand-alone Systems:

These systems to help provide critical services for hardest-to-reach customers in the most remote and rural communities in the country. The program promotes the development and rollout of solar stand-alone systems to remote off grid customers with low load demand or low ability to pay, low population and provides critical basic services, cheaper than kerosene, petrol generators and other alternatives. Additionally, these systems are easily deployable and offers a pay as you go billing system for customers thereby creating opportunity for job creation within the communities.

II. Solar Mini Grids

The mini grid component of the REAs off grid strategy provides electricity access to off grid communities across the country. Nigeria has the biggest and most attractive off-grid opportunity in Africa, and one of the best locations in the world for minigrid. Due to the countrys’ strong entrepreneurism, millions of commercially viable businesses are powered with expensive and/or unreliable power. Consequently, there are high densities of power use, large latent demand, and a strong willingness to switch to more effective alternatives. These communities are usually selected based on population, number of households, commercial activities and productive uses in order to promote economic activities and interconnection potential.  Typically, a mini grid under this programme will have a capacity of less than 1MW.

III. Energizing Education Programme (EEP)

The Energizing Education Programme seeks to develop off grid independent power plant (IPP) projects for thirty 37 federal universities and seven university teaching hospitals across the country. The socio-economic benefits of the project include:

  • Enhancement of education and systems at tertiary level
  • Access to electric power in rural communities- Promotion of a decentralised, multi-demographic approach to infrastructure delivery
  • Development of Renewable Energy Projects

The objective is to improve educational quality in the country through Solar hybrid and gas power generation opportunities. The programme also projects street lighting for security,  upgrade of distribution network and the training centre for renewable energy ate each university.

IV. Energizing Economies Initiative (EEI)

The Energizing Economies Initiative (EEI) targets micro, small and medium enterprises (MSMEs), with the objective of supporting the rapid deployment of off-grid decentralised electricity solutions that will provide clean and consistent power to economic clusters in Nigeria through private sector developers.

The Key focus are clusters of high economic activity and potential for growth such as: Markets, Shopping, Plazas/Complexes and Industrial Clusters. The EEI programme also aims to shift to a decentralized approach to electrification that is economically viable, demand–driven, market–oriented and Private sector focused. The Initiative is focused on providing efficient, clean and sustainable power tor catchment areas that have high growth impact on the economy.

V. Energy Database

One of the key elements of the Nigerian off grid electrification strategy is the use of data to develop projects.  REA has created an energy database which is a dynamic tool that is publically available on the REA website.

 

The Regulations for Mini Grids adopted by Nigerian Electricity Regulatory Commission in 2017 provide a legal and institutional framework for mini-grids. Are you seeing a direct impact of these regulations in terms of mobilizing private sector capital and players?

Nigeria is one of the few countries in Africa with a Mini grid regulation. In 2017, the Nigerian Electricity Regulatory Commission (NERC) adopted the Regulations for Mini Grids, which provide a comprehensive setting for mini grids, the regulations provide three thresholds for authorization ranging from mini grids below 100kw which does not require a permit, or between 100kW to less than 1MW which requires a permit and above 1MW requiring a permit. The regulation has created comfort for private sector.

 

What have been your biggest challenges in terms of promoting mini-grids and how are you working to address them?

There are quite a number of challenges facing the promotion and scaling up of mini grids in the country, namely:

Funding: Access to finance and funding for projects remains a challenge for off grid private sector developers around the world. In most cases the projects have a viability gap that requires support from financial institutions, government agencies, state governments and donor agencies. We are addressing challenge through a number of interventions, the Rural Electrification fund, Nigerian Electrification Project with the World Bank and also working with the AFDB.

The World Bank has approved the sum of $350 million for increasing electricity access in Nigeria. the Banks’ Investment in Nigeria’s Off-Grid Electricity Market Is One of the Largest Ever. The NEP has a variety of funding windows, providing $150 Million for mini grids, $75 Million for SHS and $105 Million for University & Hospital Power Systems across the country. Within the next 5 years, the REA is targeting 300,000 households and 30,000 SMEs served by 1000 mini grids across the country in collaboration with the private sector.  While on the SHS, the REA is targeting 1.5 million households and micro-enterprises in the next five years.

Inadequate data: Reliable data and analysis is crucial to the success of Off grid projects. Apart from having a dedicated team for collecting energy usage and baseline data, REA is working with Odyssey to provide an online platform for developers to capture data and also model demand, technology etc.

 

Are there stakeholders you would like to see be more involved and active in the mini-grids sector in Nigeria?

We partner with a number of stakeholders to ensure the development of sustainable and affordable mini grids. These stakeholders include:

  1. Financial institutions
  2. State governments
  3. Venture capitalists
  4. Distribution Companies
  5. Donor Agencies
  6. Renewable energy manufacturers
  7. Civil society groups