• Saturday, July 20, 2024
businessday logo

BusinessDay

Solar mini-grids seen helping investors optimise agricultural value chain

Sustainable solar energy financing can transform Nigeria’s rural economy

At an industry conference and exhibition held in Lagos, the Consulate of the Netherlands called on players in the agricultural value chain to adopt mini-grid electrification projects, mostly using solar as an energy source.

The panel session event, themed “empowering agriculture through solar,” which was held during the Agrofood Nigeria Exhibition and Conference in Lagos, had farmers, agricultural appliance providers, manufacturers, developers in the mini-grid space, and financiers and investors talking about the way forward.

Bukola Lucas-Kolajo, Economic and Trade Adviser, Consulate General of the Kingdom of the Netherlands, said that the conversation among the stakeholders is around the need for the productive use of electricity.

“We have come together to proffer solutions to the lack of access to electricity that is eroding the productivity of residents and farmers.”

“We are not only electrifying the rural areas but also providing an economy for the rural areas to be able to create an enabling environment,” said Lucas-Kolajo.

According to her, this collaboration would lead to a hub that could further bring Dutch businesses into Nigeria.

As of 2021, an estimated 85 million people in Nigeria still lack access to electricity; according to the International Energy Agency (IEA), this represents one of the highest levels of energy poverty in the world.

Even among those who have access to electricity, power outages are common and can last for hours or even days, particularly in rural areas. For example, the national grid has collapsed eight times in 2022, the last time in July.

“We are looking for ways to improve the agricultural sector with mini-grids, solarising the generation for the sector,” said Folu Alabi, Vice President of Operations at Ashipa Electric.

He said that with further collaboration, farming can be optimized and yields will increase. “And we can see how the machines give us a more reliable source of power.”

Nigeria’s agricultural sector contributes to a significant part of the country’s GDP. Between July and September 2021, agriculture contributed to almost 30 percent of the total GDP, an increase of about six percentage points compared to the previous quarter.

Read also: Explainer: How Lagos plans to fund 1GW solar energy by 2030

“First of all, we need to create awareness and train the farmers and food processors. They need to know it works and why they need to accept all goods into consideration, including solar and mini-grid, when it comes to the value chain,” said Omolara Svensson, the managing director of O.O.K. Group and its subsidiaries.

According to her, solar mini-grids in terms of agriculture, cultivation, and processing have already proven to be a very good solution in a lot of ways.

“So, they need to know the benefits of adopting solar and mini-grid solutions and their effects on their farm produce and commodities.”

Representing the government in the session, Lande Abudu, Component Lead, Solar Home Systems on the World Bank’s Nigeria electrification projects, said the government was creating an enabling environment and the right policies to foster this collaboration, leading to investment.

“So we’re constantly reviewing these policies, making sure they fit their purpose, and support the suppliers as well as the consumers.

“On the other hand, we also support where we see need, like access to finance. The government is trying to make sure that there is access to finances, access to data, and support for developers,” she said.

According to Abudu, they are working to make sure that everything scales up in the coming months.

The lack of reliable and affordable electricity has had significant implications for the country’s economic development, social welfare, and overall quality of life for its citizens.