To meet its climate obligations, the Nigerian government has secured funding from the World Bank and the African Development Bank (AfDB) to close the energy access gap in communities across Nigeria through the Nigeria Electrification Project (NEP).
The government has also collaborated with the United States Agency for International Development (USAID), Nigeria Power Sector Programme, GIZ’s Nigeria Energy Support Programme (NESP), and the UK-Nigeria Infrastructure Advisory Facility (UKNIAF), to name a few development partners, to help the government address the country’s power supply issues.
Anita Otubu, the Head of the Project Management Unit at the Nigeria Electrification Project, speaks with Naijaonpoint about the important energy access work the NEP is doing across Nigerian communities.
See Excerpts here:
Give a summary of what the Nigeria Electrification Project is about
I head the project management unit (PMU) of the Nigeria Electrification Project (NEP), funded by both the World Bank (WB) and the African Development Bank (AfDB) with a total of US$550million.
The project is being implemented by the Rural Electrification Agency (REA), a government agency under the Federal Ministry of Power. The REA was established to help bridge the energy access gap in the country between the underserved and unserved, with special emphasis on the last-mile areas.
Given Nigeria’s climate change obligations under the Paris Agreement and the energy transition plan for the country, a lot must be done to bridge the energy access deficit with renewable energy sources.
The government, through the REA, is embarking on renewable energy off-grid solutions in terms of isolated and interconnected mini-grids, solar home systems and captive solar hybrid power plants. We encourage private sector developers to partner with distribution companies to ensure that a particular region or community has access to reliable power supply.
It takes a lot of money to achieve universal access to power, so we work with private sector players who can secure financing to increase energy access. Though private sector players may be passionate about socio-economic empowerment for the unserved, are also profit-driven.
Therefore, there must be some incentive to make such off-grid projects in rural communities attractive for them. The REA’s NEP provides these companies with grant subsidies, data, and legal/regulatory advisory support to bridge that viability gap and encourage the private sector players to go into the most remote communities to provide energy access. The NEP has five components, namely;
- Solar Hybrid Mini-grids
- Stand Alone Solar Home Systems
- Energizing Education Programme Phase 2&3 (solar hybrid power plants for universities and teaching hospitals)
- Productive Use Equipment and Appliances for Mini-Grid Communities
- Technical Assistance.
How does the NEP protect off-grid facilities in these remote areas? Who bears the cost if there’s an attack on any of the facilities?
The private sector is privatized, so the government is no longer in the business of generating and distributing power supplies like private sector companies. Rather it plays a supervisory and support role by providing the enabling environment (establishment of the mini-grid regulation, for example), incentives such as the provision of finance (grant subsidies, low-interest loans), and data that would make a company or financier, confident enough to invest in this space.
The private sector companies own these mini-grids, so the responsibility for protecting these sites lies with them. They will own and operate these mini-grids. They should run these mini-grids for 10 to 15 years, if longer, even better.
We give them grant subsidies so they can come up with counterpart funding, and they need to spend enough time operating these facilities to make a profit. It’s their job to secure these sites, which require a lot of sensitization and engagement with the communities, so the people there can feel a sense of ownership toward the facilities and understand that if they don’t protect the assets, they will have no access to energy.
With the poverty level in remote areas, isn’t it a challenge for remote dwellers to pay utility bills to the companies that provide energy access? How do NEP and its partners deal with this?
The goal is not to overburden those with little or no access to financial resources in these remote areas.
But the interesting thing is sometimes, one may find generators being used in these remote areas, and the users are paying for diesel, which is not cheap. On the other hand, other users have alternative power sources like lanterns, torchlights, and candles, which they pay for.
What is important is understanding how much the users pay for their own preferred source of alternative power supply. Based on the analysis of how much they pay for alternative power sources, it’s easy to come up with a tariff that makes sense to them, and they are able and willing to pay for it.
As for the grant subsidies that we provide, we factor in the costs for the end user. We estimate the cost of the solar home system, and the private sector companies charge less than what they would ordinarily charge for it to reduce the tariff cost for the end user.
The private sector companies have another important role to play, which is to provide productive use equipment and appliances within these communities to;
- Stimulate the load demand, meaning more money for the mini-grid developer
- Generate revenue for end users within that community
It’s not just about providing power to these people, it is also about empowering them with productive equipment like sewing machines, cameras/printers, grinders, millers, cold storage greenhouses, or popcorn machines. Anything that they can use to generate revenue using electricity supply means more money for the developer and steady income for the end user. A win-win situation.
How many projects have been done in the various geopolitical zones?
At NEP, we target all states of the federation. At the moment, we have 65 completed mini-grids that are spread across the country. We have also deployed over 770,000 solar home systems that have positively impacted the lives of over 3.5 million Nigerians.
We are in the process of entering into contracts with Engineering, Procurement, and Construction (EPC) contractors who will build captive power plants for federal universities under the energizing education program phase II, which is a component of the REA.
Regarding productive use equipment, we have deployed 15 greenhouses, laptops, sewing machines, and irons for dry cleaning businesses. End users in remote communities can use these appliances to raise money to service their power supply bills.
Roughly, we have touched the lives of 3.5 million Nigerians and hope to increase that number going forward.
Is there anything else you would like Nigerians to know about projects at NEP?
All Nigerians need to know that the government is taking huge steps to bridge the energy access gap. Nigerians need to also protect all assets that carry solutions to these problems.
