No doubt Nigeria’s intractable energy crises has crippled major businesses and making cost of production in the manufacturing sector uncompetitive.
However, the launch of Energising Economies Initiative (EEP), by federal government is returning confidence in the sector and in particular among micro, small, medium enterprise (MSMEs) operators.
The initiative aims at increasing energy access and economic growth by assisting private sector developers provide clean, reliable and affordable power to economic clusters across Nigeria; such as markets, shopping complexes and agricultural/industrial clusters.
The Rural Electrification Agency (REA), by its mandate is charged with assisting private sector developers implement sustainable off grid power solutions for economic clusters across the country.
The REA, is playing a key role in this transformation, and through the five year Nigeria Electrification Project, NEP, that is expected to utilise a $350 million loan from the World Bank, the agency would be supporting the development of mini-grid projects by the private sector, serving at least 300,000 households and 30,000 local enterprises in close to 10,000 communities.
By its structure and anticipated spread, mini grid sector in Nigeria is poised to grow rapidly with at least seven domestic companies developing mini grids that represent a pipeline of over 1,000 projects.
Local companies with large power requirements, such as those providing telecom and agricultural services, are also expected to be prospective mini grid developers, while international mini grid companies like Husk Power and Powerhive and global conglomerates like GE, ABB, Siemens, Schneider Electric are also exploring the the potential for mini grids in Nigeria.
The EEI is equally designed to promote mini-grid development in areas that have the potential to bolster the country’s economy with the right infrastructure and are chosen based on the level of commercial activity and their role in increasing local production of goods, which point to a high demand for electricity.
With support from World Bank, Nigeria is paving the way for the energy access transformation and scale up of mini grids as a low cost and timely solution. The progressive mini grid policies and cost reflective tariffs adopted by the Nigerian government would not only be helpful for companies providing the services in expanding their business but will also set an example for the other Sub Saharan countries.
The initiative is not only targeting to bolster 200,000 micro, small and medium enterprises, (MSMEs), but would create over 2,500 jobs and reduce carbon emissions by 25,000 metric tonnes annually.
At the launch of the first phase of the EEP in Sabon Gari Market, Kano, early this year, the Managing Director of REA, Mrs. Damilola Ogunbiyi, said the initiative would provide efficient, clean and sustainable power to traders and shop owners in each of the four markets that have been selected to benefit from it.
Some of the markets earmarked to benefit from the project included, Sabon Gari – Kano, Ariaria – Aba, Somolu Printing Community and Sura Shopping Complex, both in Lagos.
Selection of the markets is based on energy demand audit conducted by the REA which showed that the four markets would require 36.27 megawatts (MW) of stable electricity to boost their productivity.
The REA audit also stated that collectively, the 36.27MW would conveniently serve 50,900 shops that are in the four market.
The Sabon Gari market launch under the first phase of the project reputed to be the largest multi-purpose markets in Kano, houses business trading in leather goods, pharmaceutical products, amongst others.
LEADERSHIP learned that before the launch, the market had been disconnected from the national grid and only gets its power from multiple diesel power generation sources.
REA’s energy audit showed that the market which has 12,369 shops, has a load demand of 916 kilowatt (kW), out of which 500 have been connected in the first phase. Another 6,000 shops would be connected to the solar system in the second phase, while the balance would be done in the third phase.
The entire market would be fully connected to the solar system by the fourth quarter (Q4) of 2018, just as the initiative would remain a private sector-driven process.
The REA in partnership with Sabon Gari Energy Solutions Ltd, a private sector power company, has successfully connected 500 shops in the market as part of the first phase of deployment.
The shops would now benefit from stable, affordable and reliable power during market opening hours while the state of the art, decentralised solar system is equipped with remote monitoring capabilities, smart meters as well as durable lithium ion batteries to support night time load.
Also, convenient payment collection is being facilitated by partnership with Paga, which would provide presence within the market through its agents as well as its digital platform to enable mobile payments.
As a result of this first deployment a total of 20 skilled jobs have been created and it is expected that this would increase to 200 as deployment continues throughout the entire market.
Also in Lagos, the agency has commissioned a 1.5megawatts (MW), under the EEP at the popular Sura market.
Vice President Yemi Osinbanjo, who commissioned the project emphasised that micro, small and medium enterprise (MSME) was the future of the Nigerian economy as he advocated the need for more private sector partnership in achieving the federal government’s goals of economic development through MSME development.
He stated that the administration’s goal was to implement improvements, reforms and interventions that would be visible not merely in the global rankings,but impactful in the lives and that of business owners and entrepreneurs across the entire country.
“This partnership between the federal government of Nigeria, private and social sector partners and most importantly with you, business women and men and your market associations, has enabled us to launch the Energising Economies Initiative here in Sura Shopping Complex in record time.
“This cannot be achieved without Government partnering with private sector, development partners and fellow Nigerians after it has created the enabling environment. We are committed to being transparent as we strive to make Nigeria an easier and cheaper place in which to do business. You all have a critical role to play in ensuring that we succeed.
“So, while we face many challenges, I am greatly encouraged by our progress. Today, we take another step forward in our journey. Sura Shopping Complex now has reliable, affordable power, thanks to private sector and the government working hand-in-hand. As a result, the small businesses in this shopping complex will be more productive. We have made another dent in unemployment and poverty reduction. My hope is that we can apply the same formula – innovation, resilience, and partnership – to help Nigeria realise its potential.”
In her speech, managing director of Rural Electrification Agency, (REA), Mrs. Damilola Ogunbiyi, commended the Prof. Osinbajo and the federal government for the Energising Economies Initiative (EEI) which has helped to improve the country’s economy.
According to her, “The Energising Economies Initiative aspires to increase energy access and economic growth by assisting private sector developers to provide clean, reliable and affordable power to economic clusters, such as markets, shopping complexes and agricultural/industrial clusters.
“Over the next 4-5 years, we want to reach 500,000 small businesses within 350 economic clusters. The role of FGN through the REA is critical to the success of this initiative. This includes providing data like Energy audits, programme management support,community relation support and stakeholder management”.
The programme support for this project is also being provided by Power Africa through technical assistance support from Deliotte and Mckinsey.
Before implementation of the Sura market project, over 799 generators were decommissioned so as to reduce harmful greenhouse emissions and noise pollution, while shop rentals in Sura Shopping Complex has increased by 15 per cent.
Solad Power Holdings is the private sector developer of the Sura Shopping Complex IPP and provides power from the Island Power Plant in Marina through a dedicated underground distribution infrastructure.
The market now enjoys lower tariff relative to the ones levied them earlier, and has also witnessed increased patronage by customers.