Increasing electricity access is still a major challenge as the national grid can barely boast of 45 percent electrification across the country according to the USAID Power Africa fact sheet for Nigeria. Renewable energy solutions now create a means to increase electricity access across the country due to the rapid development associated with the technology. Renewable energy companies who frontline the deployment of these projects have been impacted in various ways as a result of the pandemic.
These renewable energy companies have had to observe the lockdown imposed on movement and adherence to the local guidelines in a fight against the virus. The pandemic has resulted in a halt on the execution of current projects and inability to commence new ones, resulting in performing most tasks remotely. Cash flow has been affected as significant drops in sales have crunched quarter one earnings already. System maintenance, Inability to access goods (power equipment) and also pay salaries are some of the effects of the pandemic on the companies. In essence, we have seen a continuous decline in revenue generated from these companies and a continuum in recurrent expenditure.
Some projects have experienced a decrease in electricity unit vending and plans to stimulate and expand productive demand have been halted. Opportunities to collect cash physically from new customers who are paying connection fees have been deferred. A renewable energy company (Auxano Solar) who runs a solar PV assembly manufacturing plant explained that there has been a complete shutdown of their facility. Insecurity of goods, system design change and loss of funds due to overzealous lockdown enforcement security personnel and increase in project overhead cost are some of the problems directing affecting their projects.
Renewable Energy companies have had to create innovative solutions to the current problems posed by the pandemic. They have joined in the technological train of working remotely and have also employed the use of virtual meeting platforms to engage in team meetings and communicate with stakeholders.
They also leverage on sales optimisation to boost sales, and on ground support staff to help manage any system malfunctions. The use of internet based remote monitoring and smart metering infrastructure to observe hourly energy consumption trends have also proved very effective. Pay-As-You-Go operations have aided revenue collection, creation of technical implementation plans and an increase in patronage from local power equipment vendors have proven a positive outcome.
Companies have applied stricter cash management controls to reduce their overhead costs. Some of these companies have also entered into partnerships with relevant organisations and sent in proposals in response to COVID-19 relief funding and stimulus funding opportunities announced by the government, various local and international organisations.
Finally, companies may choose to take advantage of funding opportunities in the form of relief funds or stimulus funding to enable them meet existing financial obligations such as payment of salaries as they are already digging deep into their pockets. Also, companies can request for an exemption across the country which permits them to fully carry out their services since electricity is an essential service.
David Arinze
Arinze is the Program Officer, Off Grid Energy at Diamond Development Initiatives (DDI), a not-for-profit organisation in Nigeria that provides technical assistance to communities & international organisations.
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