• Monday, June 24, 2024
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Bridging the gap: Transformative strategies for Rural Electrification in Nigeria – Abba Aliyu

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Abba Aliyu brings a wealth of experience to his role as acting MD/CEO of the Rural Electrification Agency (REA). Prior to his appointment, he spearheaded the Project Management Unit for the World Bank and African Development Bank’s $550 million Nigerian electrification project, aimed at attracting private sector investment in renewable energy.

He served as a pioneer staff member at Nigeria Bulk Electricity Trading Plc and previously held positions at Nigerian Security Printing and Minting, Aso Savings and Loan, where he implemented a performance management system recognised by Microsoft at the 2009 Business Transformation Award, WaterAid, and Family Health International, a USAID-funded health intervention agency.

Most notably, Abba recently led the design of the world’s largest public sector off-grid project, the $750 million Distributed Access Through Renewable Energy Scale-Up initiative, launching in August 2024. He has been instrumental in the implementation of the Nigerian Electrification Project, deploying over 150 mini-grids and 1.5 million solar home systems across the country.

In this exclusive interview with BusinessDay’s Bashir Ibrahim Hassan, Abba Aliyu shares his rich perspectives on Nigeria’s Rural Electrification Agency.

Read also: Rural Electrification Agency implements N45.8bn projects in 3 years – Report

Take me back to the time you assumed office. Did you find strategies in place to support the mandate of the REA?

Prior to my current role, I joined the REA’s project management unit, which specifically focused on implementing the Nigeria Electrification Project. My vision has always been to leverage the excellent work of past leadership, particularly Mrs. Damilola Ogunbiyi’s brainchild, the Nigeria Electrification Project.

Talking about mandate, I must admit that the Honourable Minister of Power, Adebayo Adelabu, has been instrumental in initiatives to significantly increase Nigeria’s power generation capacity. REA’s mission extends beyond simply providing electricity access. We aim to unlock remarkable socio-economic development in underserved communities. Nigeria’s high number of unserved and underserved areas demands a deliberate, impactful approach. One key initiative I’m proud of is establishing Renewable Energy Service Companies (RESCOs). The RESCOs complement distribution companies with utility-scale portfolios (50–100 MW) and aim to contribute to Nigeria’s carbon neutrality goal by 2060, aligning with President Tinubu’s Renewed Hope Agenda. My office plans to support the operationalization of the new Electricity Act, enabling state participation in rural electrification. This fosters collaboration and increases public oversight of REA’s activities, and this framework will guide financiers (debt and equity) in making informed investment decisions for RESCOs (long, short, or medium-term). Transparency and accountability in this sector have traditionally been challenges. To address this, I plan to introduce, for the first time, a capital project implementation plan and publish annual reports to ensure accountability for National Assembly appropriations. This level of transparency has the potential for significant and sustainable change. While our journey has had phenomenal successes and a few hurdles, we’re not stopping there. We plan to establish a National Control Centre within REA to digitally track mini-grid and grid extension projects for nationwide efficiency.

What are the details of the funding model for this project and your strategies for further developing it?

The REA leverages a diversified funding strategy. The National Assembly allocations provide a solid foundation, while bilateral and multilateral partnerships with institutions like the World Bank and African Development Bank offer additional resources. Grant funding from agencies like UNIDO and UNDP also plays a crucial role in designing impactful projects, and we’re actively seeking similar grants to replicate these successes nationwide. Additionally, discussions with a French development agency explored a potential federal government loan structure to subsidise infrastructure development. Beyond transparency, our focus is on replicable funding models that attract future financiers. Building on the successes of previous initiatives like Energising Agriculture and the Africa Mini-Grid Project, we’re establishing a framework to secure long-term financing for similar projects across the country. This multi-pronged approach ensures the long-term sustainability of our electrification efforts.

What is your approach to achieving this vision, and what early results should we look out for?

The Honourable Minister of Power has already set in motion plans to raise electricity generation from around 3,500 megawatts to between 6,000 and 6,500. Under his leadership, the Ministry has focused on leveraging the Nigerian Electricity Act of 2023 to create a fully privatised, competitive electricity market that encourages public-private partnerships and aims for a cost-reflective tariff system. On my part, we are taking a multi-pronged approach to achieve this ambitious vision. High-impact projects are already underway, including 35.5 megawatts for seven universities and a teaching hospital within the next two months. Commissioning with the Honourable Minister and potentially the President is in our plans. An interconnected mini-grid serving over 60,000 in Ondo is set for commissioning next month, and 100 containerised mini-grids have recently been deployed in some healthcare institutions. Our capital project, encompassing diverse mini-grids, grid extensions, and solar home systems, will also begin soon. Underpinning this vision is a detailed, step-by-step plan I created. The Distributed Access Through Renewable Energy Scale-up The project targets electrifying 23 percent of Nigeria’s unelectrified population (around 19.5 million people) through a mix of solar home systems for 15 million Nigerians, isolated mini-grids for 3 million, and interconnected mini-grids for 1.5 million. We’ll leverage a combination of minimum subsidy tenders, performance-based grants, and a results-based framework to achieve these goals.

Tell us more about the performance-based framework.

It is a results-based framework that the Rural Electrification Agency (REA) has tried and found to be quite impactful. This approach emphasises achieving pre-defined outcomes and minimises intervention during project execution. Our team only intervenes when the project is completed. This framework is so effective that it is now being exemplified by an ongoing World Bank project in the agricultural sector called ACRISA. Recognising the REA’s performance-based framework success, the World Bank signed an MOU with us to establish a similar performance-based grant system for ACRISA, and we will be providing technical assistance by embedding our staff within ACRISA’s project management unit to facilitate system development. Overall, while it’s result-based, there is also a clear definition of the standard required for such projects to be deployed or implemented.

Nigeria faces security challenges in certain regions. Given your ambitious vision of universal access, can you elaborate on your strategy for safely deploying projects in areas like the Northwest, Northeast, Southwest, and Southeast? What specific measures are being taken to mitigate security risks?

The 23 percent electrification plan is across the entire country. The REA has become sort of an “everywhere you go” brand, and this is because there’s either a completed or ongoing REA project in every state or local government. I say this without fear of contradiction. Our modus operandi is to work with developers who know the local area.

How affordable is it for the people, and how does the REA approach billing in communities?

The REA prioritises long-term sustainability in its mini-grid projects, and they aren’t entirely free. Users pay a regulated tariff reflecting generation, transmission, and maintenance costs, set by the Nigerian Electricity Regulatory Commission (NERC). Importantly, this tariff fosters transparency and affordability through community participation in open discussions. A portion of the tariff is also allocated for future battery replacements, ensuring long-term grid operation without additional user burden. The REA avoids a one-size-fits-all approach to billing. While tariffs stay within a similar range, flexibility exists to account for community agreements with developers and specific needs. This means communities with complex logistics or demanding maintenance might pay slightly more compared to less demanding areas.

In terms of geographical reach and population served, how would you describe the REA’s impact on electricity access across Nigeria, and how does the agency safeguard mini-grid infrastructure within communities?

I would say that because the Minister of Power’s approach and the REA’s combine leveraging new legislative frameworks, fostering public-private partnerships, and focusing on technological integration to meet Nigeria’s growing energy demands and support economic development, we’re committed to tackling the challenge posed by vandalism head-on, aligning with President Buhari’s focus on impactful projects. Just like the government’s large-scale infrastructure initiatives, we’re determined to make significant progress in a short timeframe. Our vision extends beyond immediate electrification.

We envision Renewable Energy Service Companies (RESCOs) evolving into sustainable utilities managing portfolios exceeding 50 megawatts, with the potential to export expertise to other African countries. Regarding safeguarding mini-grid infrastructure, sustainability is paramount. The Honourable Minister has always emphasised the need for reforms to enhance the national grid’s reliability, reduce outages, and improve overall efficiency in power distribution. So, before deployment, we proactively foster a sense of community ownership by establishing user cooperatives that take ownership and protect the mini-grids. This not only mitigates vandalism but also promotes community participation.

Beyond your day-to-day work, what longer-term impact do you hope to make on this office and project?

Within two to three years, I envision at least five high-performing renewable energy service companies (RESCOs) managing significant portfolios exceeding 100 megawatts. These RESCOs will evolve beyond mini-grid development into comprehensive service providers encompassing generation, distribution, metering, and customer care across diverse regions. Transparency is core to my vision. I’m committed to providing readily accessible reports on REA activities and strategic goals. Additionally, I’m developing a national electrification plan to track progress, attract investment, and guide impactful project location decisions. Beyond these initial goals, I see immense potential for REA. We’ll undergo a rebranding to instill a “scale-up” mentality across all employees and develop a new business plan with clear KPIs. Electrification is just the first step. My goal is to leave a legacy of vibrant rural economies. We’ll achieve this by strategically intervening in the value chain to unlock economic growth and activity. Ultimately, I’m driven to significantly reduce Nigeria’s electrification deficit, granting access to 23 percent of the unelectrified population. This will leave a legacy of a robustly funded sector and a demonstrably impactful initiative.

What collaborative opportunities are open to the Nigerian public with REA to accelerate progress towards nationwide electrification?

Echoing the Honourable Minister’s concerns, I urge the public to be our partners in safeguarding electricity infrastructure. Report any suspicious activity near installations. Collaboration is key to securing a sustainable energy future. Timely payment for REA services ensures continued quality service. My commitment to open communication remains steadfast, and we will share regular progress reports and performance data, allowing public scrutiny and accountability. Together, we can build a brighter Nigeria powered by clean and reliable energy.