In a bid to build an industrial platform and create an indigenous manufacturing supply chain across Nigeria and Africa at large, French multinational corporation Schneider Electric has signed a Memorandum of Understanding (MOU) with EMONE Energy Solutions, a company specialized in the provision of sustainable energy solutions across the entire value chain.
According to Schneider Electric, the MOU is aimed at supporting the company in optimizing project structuring, supporting the development of an industrial platform and ensuring licensed manufacturing both in Nigeria at Africa.
The French giant plans to sign similar deals with other engineering procurement and construction companies to implement the same model across the continent.
The MOU will further strengthen the operations of EM-ONE Energy Solutions who has already won a contract for 30 mini-grids in Nigeria to power hospitals in Kaduna State, and is also targeting the university and rural electrification market. Paul-François Cattier, Schneider Electric’s Vice President, Business Development, Africa & Middle East explained that the MOU concerns Schneider’s support with optimizing the architecture of these projects and developing an industrial platform to integrate these mini-grids into containers in Nigeria and manufacture Schneider Electric mini-grid solutions under licence.
Schneider Electric’s Vice President said Africa today is comparable to China 40 years ago. “In 2050, it will account for 30 percent of the global population according to the United Nations and could be one of the world’s top five economic powers by 2050,” explained Paul-François Cattier.
Nigeria presents the biggest and most attractive off grid investment opportunity in Africa. With a population of 195 million people, GDP of $405 billion that continues to grow at close to 3 per cent each year, it is the largest economy in Sub-Saharan Africa. A significant amount of the country’s economy is already powered largely by small scale generators (10-15 GW) and almost 50 per cent of the population have limited or no access to the national grid.
As a result, Nigerians and their businesses spend almost $14 billion annually on expensive, inefficient, polluting poor quality electricity sources. Developing off-grid alternatives to complement the grid could create a $9.2 billion market opportunity each year for mini-grids and solar home systems, saving Nigerian homes and businesses up to $ 4.4 billion every year.
Furthermore, there is large potential for scaling as 10,000 minigrids of 100kw each could be installed in the next 10 years to meet 30 per cent of anticipated demand. The combination of large revenue opportunity ($9.2 billion per year), a supportive government and a dynamic entrepreneurial environment make Nigeria the ideal location for impact investing in renewable energy.
“Rather than importing minigrids produced in Europe, Asia or North America, we want to create an African mini-grid industry with operators, integrators, investors and local jobs,” Paul-François Cattier said.
Quoting Nigerian government data, the International Monetary Fund (IMF) says that a lack of access to reliable electricity costs Nigeria an estimated $29 billion a year.
The situation comes with environmental and health risks, too. Many individuals, households and organizations have resorted to fossil-fueled generators. Nigerians spend an estimated $14 billion a year on small-scale generators.
18 months ago, Schneider Electric launched an initiative with the objective of creating a continental supply chain of mini-grids, rather than importing them from other countries.
While Africa suffers from an extensive deficit – albeit decreasing –access to power, Schneider Electric launched its Access to Energy program ten years ago aiming to bring solutions to rural electrification in particular.
The company has installed 700 mini-grid systems across the continent thanks to projects developed in partnership with non-profit organizations and financed with donations.
