‘We are committed to provision of clean, safe, reliable electricity’
Ahmad Salihijo Ahmad, managing director/chief executive, Rural Electrification Agency (REA), in this interview with John Osadolor and Harrison Edeh, speaks on the agency’s plan to electrify the rural areas, communities, school campuses, among other places with a view to creating enabling economic environment for national development. Excerpts:
Kindly talk us through your programmes and policies in REA and their implementation to achieve set targets and objectives.
The Agency’s mandate is the provision of electricity in unserved and underserved communities across the country to catalyze economic growth and improve quality of life for Nigerians. REA is currently implementing the Nigeria Electrification Project (NEP), Energizing Economies Initiative (EEI), Energizing Education Programme (EEP), Rural Electrification Fund (REF), Energy Database and Capital projects as well as creating the enabling environment for private sector investment in electrification.
With a broad understanding of the energy needs of different consumer groups in the country, we continue to deliberately design programs to cater to these needs and close the energy gap. To impact local economies, we have the Energizing Economies Initiative designed to support the rapid deployment of off-grid electricity solutions to provide clean, safe, reliable and affordable electricity to economic clusters (e.g market places, shopping centres, industrial areas).
To adequately cater to the energy needs of unserved and underserved communities across the nation, the Agency secured funding from the World Bank ($350m) and the African Development Bank (AfDB) ($200m). The objective of the NEP is to deploy solar hybrid mini-grids to serve over 2 million Nigerians and over 10,000 SMEs as well as deploy solar home systems to 1.5 million households.
We understand how pivotal electricity access in institutions of learning and hospitals is. Under the NEP, we have the Energizing Education Programme (EEP), a Federal Government programme designed to improve educational outcomes through the deployment of clean, safe and reliable energy to 37 Federal universities and 2 affiliated teaching hospitals.
The Federal Government is conscious of the need for equitable access to energy. With the Rural Electrification Fund (REF) being implemented by the REA, the objective is to aid equitable access to electricity across Nigeria with grants given to private sector developers using a PPP model.
At the REA, we also implement Capital Projects. These are primarily grid-extension projects the Agency had been traditionally known for. It involves grid extension and injection substation projects and now increasingly, solar mini-grids, deployment of solar home systems, installation of solar street lighting across all 6 geo-political zones.
These impacts are being felt by Nigerians in the area of academic growth, rural development, economic growth as well as health care and agriculture improvement.
The Agency is determined to close the energy gap in the country by deploying electrification projects in our rural communities using different energy sources.
There are about 100 million off-grid Nigerians, and several interventions have been initiated by your agency to give them access to power. Could you speak further on this?
Powering Nigeria is a goal our Agency have continued to approach, one community at a time. The REA is the Implementing Agency of the Federal Government tasked with the electrification of rural and unserved communities. These communities are our primary constituents because the electrification of rural communities ultimately energizes the local economies of such communities through the usage of productive use assets by community members.
Achieving REA’s Vision requires a focus on bringing electricity to unserved and underserved communities through a sustainable market. This will entail both direct implementation and coordinating broader electrification effort such as the following:
• Grid Extension (Capital Projects)
The core objective is to provide affordable, easily accessed, safe and efficient electricity supply to the populace especially in rural settlements across the nation.
The projects are broken down into the following categories; solar mini-grids, deployment of solar home systems, deployment of solar street lighting, injection substations, and grid extension projects across all 6 geopolitical zones.
• Nigeria Electrification Project (World Bank and African Development Bank)
The NEP is the largest off-grid electrification programme in Africa. FGN has secured funding for from both the World Bank ($350m) and the African Development Bank (AfDB) ($200m) for three components. The NEP will develop solar hybrid mini-grids to serve over 2million people and over 10,000 SMEs as well as Deploy solar home systems to 1.5million households and Improve educational outcomes by electrifying Federal Universities and affiliated teaching hospitals as part of the EEP. So far, we have deployed energy infrastructure to off-grid Nigerians in 3 communities: Rokota in Niger State, Akikpelai and Olobiri in Bayelsa State, with more underway.
• Rural Electrification Fund (REF)
The Rural Electrification Fund (REF) is being implemented by the REA for the provision of equitable access to electricity across Nigeria, to maximize economic, social and environmental benefits of rural electrification grants, to promote off-grid electrification and to stimulate innovative approaches to rural electrification. REF projects are administered using a Public-Private Partnership (PPP) model.
Under the First Call of the Rural Electrification Fund (REF), over 19, 000 Solar Home Systems have been deployed to serve Nigerians off-grid, while 12 communities have been energized through solar hybrid mini-grids. Following the success of the First Call of the REF projects, the 2nd REF Call is in progress. The Agency is currently engaging interested energy developers to help drive this process and deploy more interventions targeted at off-grid Nigerians.
• Energizing Education Programme (EEP)
The Energizing Education Programm (EEP) aims to power 37 universities and 7 teaching hospitals by providing independent power plants, 10,400 street lights will be installed across campuses in Nigeria for illumination and security, upgrade of existing distribution networks and world-class renewables training centre at every university.
• Energizing Economies Initiative (EEI)
The Energizing Economies Initiative (EEI) supports the rapid deployment of off-grid electricity solutions to provide clean and consistent power to economic clusters in Nigeria. Over 300 clusters have been identified for electrification across the country in different phases.
• Gender Mainstreaming
Gender inclusion is a core objective of the REA to promote and drive female participation in electrification initiatives.
• Rural Electricity Users Cooperative Society (REUCS)
The Electricity Users Cooperative Society is an initiative of the REA that is aimed at mobilizing benefiting communities to achieve sustainability of electrification projects.
You have been very determined on facilitating your key programmes such as energizing market and education, could you speak to us on the success of such programs?
As you are aware, education and local economies are two critical sectors that improve per capita productivity and improve national development. As an Agency that believes in the strategic use of off-grid technologies, these are two sectors we currently have programmes for.
The Energizing Economies Initiative (EEI) and Energizing Education Programme (EEP) has enabled the deployment of off-grid solutions to economic clusters and Federal Universities across the country.
So far under the EEI, over 12,000 shops are now receiving clean, safe, reliable and affordable electricity supply.
The Pilot Phase of the Energizing Economies Initiative has commissioned the Sura Shopping Complex Independent Power Project in Lagos state powering 1,047 shops, as well as the Ariaria Market Independent Power Project, Aba, Abia State, powering over 4,000 shops and has launched over 6,000 energized shops at Sabon Gari market, Kano State with more connections in the pipeline.
Deployment is currently ongoing in markets under Phase 1 of the EEI. This phase is expected to provide clean, safe and reliable power to 12 markets across Lagos, Kano, Edo, Ogun, Ondo and Oyo.
The REA plans to create an enabling environment where the private sector developer handles all the project delivery steps from inception to conclusion. The Phase 2 rollout plans are currently in view and conversations have begun between the developers and State Governments.
Secondly, the first phase of the Energizing Education Programme (EEP) funded by the Federal Government consists of 9 universities and 1 affiliated teaching hospital. Two projects have been commissioned; a 7.1 MW Solar Hybrid Mini-Grid at Bayero University, Kano and 2.8MW Solar Hybrid Mini-Grid at Federal University Ndufu-Alike Ikwo, Ebonyi State (FUNAI). In addition, 1.6 Federal University of Petroleum Resources (FUPRE), Delta State, 1.12MW Abubakar Tafawa Balewa University, Bauchi are completed and ready for commissioning while other projects under phase 1 of the EEP are at various stages of completion.
The Programme will provide reliable power supply to over 580,000 students, 80,000 teaching and administrative staff, 1,400 doctors and 5,500 medical professionals. As a result, 860 harmful diesel-fired generators will be decommissioned. Phase 2 and phase 3 of the EEP will be funded by the World Bank and African Development Bank through the Nigeria Electrification Project.
One by one, some major government outfits and private sector companies are ditching the on-grid power for off-grid power. Could you kindly share your thoughts on how REA is steering this development?
The REA through its several programmes and initiatives provide the enabling environment for private developments to catalyze off-grid energy development and attract investments.
The Agency creates an enabling environment for private sector-led projects, which includes conducting pre-feasibility assessments, energy audits, enumeration, data analysis, identification of qualified private sector developers, and project stakeholder engagements.
Apart from the implementing role being played by the REA, our activities and programmes also help encourage industry collaboration, knowledge exchange as well as investments. We do this in collaboration with our development partners as well as key private sector developers.
These activities being driven by the REA have continued to educate and enlighten critical stakeholders in government and private sector on the reliability and sustainability of off-grid technologies. REA has continued to stimulate the renewable energy sector in Nigeria while putting developers on their toes to provide and deploy industry-standard off-grid solutions, per time.
Our universities and hospitals are experiencing your key interventions. Talk us through further on this, and whether there are concerns.
Education and quality health care are backbones to economic development. The REA through the Energizing Education Programme (EEP) aims to provide clean and reliable electricity in Federal Universities and affiliated Teaching Hospitals. We have seen the successful completion of projects in Bayero University, Kano, Alex Ekwueme Federal University, Ndufu-Alike Ikwo, Ebonyi State with other projects under phase 1 at various stages of completion
Also, since the beginning of the Covid-19 pandemic, the REA has deployed 4 solar mini-grids to Isolation Centers in Gwagwalada and Ogun State as well as the NCDC Laboratory in Lagos in its bid to support the efforts of the FG in containing the Covid-19 pandemic.
Following the impact of the Agency’s intervention in 4 COVID-19 Isolation Centers, a series of engagement between the REA, the World Bank, Federal Ministry of Power, the Federal Ministry of Health and the Nigeria Center for Disease Control (NCDC) plan to scale up this intervention by energizing 100 additional COVID-19 centres (Phase 1) and 400 Primary Healthcare Centres (PHC) (Phase 2) across the nation.
We intend to scale up on all these interventions to cover more universities and health facilities across the country.
There are still concerns that off-grid solutions are still on the high side on the back of duty concerns. Could you speak on this development? Are there any discussions with the government on pruning down the duty cost?
Just like we have in many countries deploying mini-grids, we continue to scale barriers as the industry develops. Tariff, for example, can be seen as a barrier, but not to the extent of it crippling the growth of mini-grids.
Another barrier we are working fervently to scale is on the importation of renewable energy components. Players in the industry have expressed their views on the removal of VAT for solar and renewable energy companies. This is actually a policy issue that we are currently collaborating with other relevant agencies to solve because we believe that if the government continues to drive beneficial policy issues around renewable energy, it will help bring down the cost of renewable energy deployment for private use, business use as well as deployment in communities.
East Africa tells a beautiful story of advancing off-grid energy solutions; are their chances we could adopt their model of success?
Off-grid solutions are witnessing a rise in adoption in Nigeria with investments coming in from Donor Organizations such as the World Bank and African Development Bank. I believe Nigeria is setting the pace in the advancement and deployment of off-grid solutions in Africa. Other African countries can learn a lot from what Nigeria is doing.
With our unique history of energy poverty in Nigeria, the Nigerian government have taken steps towards steering the nation on the path to improved energy access. The programs being deployed by the REA, as mandated by the Federal Government are data-driven, locally developed but globally appealing programs designed to solve our energy problems, sustainably.
With the franchise regulation by the Nigerian Electricity Regulatory Commission, are there plans to incentivize and woo more Nigerians into the off-grid market?
That is the idea. NERC’s franchise arrangement caters to the electricity distribution sphere of influence and covers (i) metering, billing and collection; (ii) total management of electricity distribution function in a ring-fenced area; (iii) total management of distribution feeders including billing and collection; (iv) loss reduction and provision of embedded generation; and (v) any other innovative franchise models developed by the Disco.
As a relatively novel technology, the floodgates are open to energy developers in the off-grid market. This is helpful as deliberately aids competition in the off-grid market. With a competitive market, service delivery and quality of deployed systems automatically improve.
Remember that under the Nigeria Electrification Project (NEP), there are already well-set funding models such as the Output-Based Fund (OBF) for the sale of solar home systems to homes and businesses across Nigeria and the Performance-Based Grant (PBG) for the deployment of mini-grids to unserved and underserved communities in Nigeria. All these are open to developers in the off-grid market to key in and access funding targeted at powering Nigeria.
There are lots of investment opportunities in the off-grid electricity market; what is the REA message to investors who may want to switch investments to East Africa?
I would say to those investors, stay in Nigeria and keep investing. The Federal Government is doing a lot towards simplifying ease of doing business in the country. Nigeria is attracting investment not just in the energy space but also in other sectors.
The investment opportunities in the Nigeria off-grid market is big. As you are aware, asides having the largest economy in sub-Saharan Africa, Nigeria is one of the best locations in the world for the deployment of mini-grids and solar home systems.
Currently, the energy gap in Nigeria is huge. Millions of MSMEs, industries and agencies are being powered by carbon-emitting generating sets. What this means is that the investment in clean, safe and reliable energy in Nigeria creates an option for a switch to cleaner, more sustainable energy for consumers.
Also, through critical agencies such as REA, the Nigeria Electricity Regulatory Commission (NERC) as well as the Federal Ministry of Power, the Federal Government of Nigeria is deliberately providing an enabling environment for off-grid investors as well as private developers to flourish. We also have the advantage of global attention through funding and technical support in the Nigeria off-grid space. Very few African countries currently deploy forward-leaning, investor-friendly programs as we do in Nigeria.
There is a significant rise in the adoption of off-grid solutions with lots of return of investment. Therefore, we keep seeing more private developers applying to REA’s several programmes.
In the recent past, you advanced move in attracting about N350 million from the World Bank and another fund from the ADB; could you talk us through that procedure and the success recorded?
The procedure is simple, we showed them the potentials of investing in Nigeria and the growth of the energy sector and they agreed with us. Since the investment from these banks under the Nigeria Electrification Project, several activities have taken place to ensure the success of the program.
The World Bank and the Africa Development Bank are two important stakeholders supporting the Federal Government’s Nigeria Electrification Project (NEP). NEP is a private sector-driven initiative designed to provide electricity access to households, micro, small and medium enterprises in off-grid communities across the country through renewable power sources. Currently, NEP is being funded by the World Bank through a $350 million loan and a $200 million loan from the African Development Bank.
The first PBG completed project under the NEP by PowerGen Renewable Energy with 157kw capacity was commissioned on 7th December 2019 in Rokota Community, Edati Local Government Area, Niger State.
The second and third NEP PBG Mini-Grid projects with capacities of 67.32kW each were commissioned on 13th April 2020 at Oloibri and Akipelai communities, Bayelsa state by Renewvia Solar Nigeria Ltd. A total of 921 connections have been achieved so far in households, MSMEs and Public facilities and a total capacity of 198.64kW of energy deployed. In addition, Over 68,000 solar homes systems have been installed in households, MSMEs and public facilities by the eleven (11) companies who have signed grant agreements. The capacities of the system range from 6Wp to 75Wp translating to over 2,443kW of installed capacity across the 36 states in Nigeria.
Under the NEP-AfDB, the REA is commencing Phase I of the productive use appliances and equipment for off-grid communities with seven (7) existing mini-grid sites to demonstrate the effectiveness of the productive use component in rural economies and to ascertain the optimal business models and subsidy designs to be deployed in the subsequent phases of the program rollout. Developers of operational mini-grids were invited to indicate interest by submitting responses to an Application Survey launched on the REA website. Nineteen (19) applications were received, of which ten (10) sites were shortlisted for field studies (7 shortlisted and 3 reserve sites). Field studies have been completed to validate the basis for investment decisions. The approvals for grant agreements will elicit the launch of the Component 2 Phase I by the end of October 2020.
So far, private developers have been accessing these funding windows to deploy mini-grids as well as solar home systems. In addition, We have brought together private developers and other energy stakeholders to ensure the success of the program.
Kindly share with us your message to Nigerians, especially the rural dwellers, as we celebrate 60 years since independence.
Nigeria has come a long way since independence. We have witnessed growth and the Federal Government is doing its best towards developing rural communities, especially by provision of clean, safe and reliable electricity through the REA. We are resilient, determined and hardworking people. Therefore, we should ensure we only focus on moving our country forward to greater heights.