• Tuesday, March 05, 2024
businessday logo

BusinessDay

Nigeria, Senegal will develop over half of planned mini grids in Africa by 2030- World Bank

Mini grids in Africa

A recently released technical report by the World Bank has revealed that more than half of the planned mini grids in Africa will be developed in Senegal and Nigeria by 2030.

According to the Bank’s 2019 report titled “Mini Grids for Half a Billion People,” Africa has the largest share of planned mini grids which means that mini grid deployment will grow predominantly as more than 4,000 mini grids are being planned for development in Africa.

“More than half of the planned mini grids in Africa will be developed in Senegal which will develop over 1,217 minigrids while Nigeria will develop over 879 mini grids,” the report said.

The report noted that Nigeria is one of the frontier countries were the regulator has adopted one of the most comprehensive sets of mini grid regulations in Africa covering issues like licensing, retail tariff setting, and what happens when the main grid arrives as well as a comprehensive national electrification strategy and implementation plan.

In some of the largest economies in the region, such as Nigeria, Ghana, and Angola, more than 25 percent of businesses lose more than 10 percent in sales because of power outages, with individual firms reporting losing more than 70 percent, the report said.

Nearly 80 million people in Nigeria lack access to electricity. To address this challenge, Nigeria’s Rural Electrification Agency (REA) is implementing the World Bank–supported Nigeria Electrification Project (NEP), which aims to scale up investment in mini grid and off-grid solutions.

On April 15, 2019, the REA launched the mini grid and solar home system components of the NEP. The mini grid component aims to extend electricity services to 300,000 households and 30,000 enterprises in rural areas by 2023. This private-sector–led component provides viability gap subsidies to mini grid developers under two funding windows.

“Mini grids are now one of the core solutions for closing the energy access gap. We see great potential for mini grid development at scale and are working with countries to actively mobilize public and private investment,” said Riccardo Puliti, senior director of Energy and Extractives at the World Bank.

Globally, the World Bank noted that mini grids, previously viewed as a niche solution, can provide electricity to as many as 500 million people by 2030, helping close the energy access gap.

“The combination of falling costs, dramatic increase in quality of service, and enabling policies has made mini grids a scalable option to complement grid extension and solar home systems,” World Bank noted.

Figures from World Bank revealed 47 million people are connected to 19,000 mini grids, mostly hydro and diesel-powered, at an investment cost of $28 billion. “Plus: 7,500 mini grids planned, mostly in Africa, mostly solar-hybrid, connecting more than 27 million people at an investment cost of $12 billion.”

The report which was funded by the World Bank’s Energy Sector Management Assistance Program (ESMAP) noted there are more than 26,000 installed and planned mini grid projects around the world while globally, at least 19,000 mini grids are already installed in 134 countries and territories, representing a total investment of $28 billion, providing electricity to around 47 million people.

“Most of these mini grids are diesel-fuelled, followed by hydro-powered and solar-hybrid systems. Between 2014 and 2018, twice as many solar-hybrid mini grids were built compared with the period between 2009 and 2013,” World Bank said.

In Africa and South Asia only, investment figure drops to $5 billion for 11,000 mini grids covering 31 million people while another over 7,500 mini grids are planned to go online over the next couple of years, mostly in Africa, connecting more than 27 million people for an investment cost of $12 billion.