The managing director for Nigeria’s Rural Electrification Agency (REA) has said the private sector is essential to achieving its goal of developing ten thousand mini-grid sites by 2023.
Nigeria is home to 186 million people, 43 percent of whom live without basic access to electricity. The country recently received a loan of US$350 million from the World Bank with which to catalyse private capital for investment in sustainable energy projects.
“It needs to be private sector-driven access model for Nigeria,” said Damilola Ogunbiyi, managing director of REA. “The power sector in Nigeria should be driven by private funding, innovation and technology, which can achieve [energy] access much faster than the public sector.”
However, Ogunbiyi said the private sector cannot electrify the most remote communities in the country, especially hospitals and schools that are unlikely to attract private partners on market terms only. The government of Nigeria is expected to work with the World Bank to devise limited subsidy structures, such as results-based financing, which would pay mini-grid developers for successful connections. The state has also released clear licensing and standards along with a new mini-grid policy, which came out last year.
“Ultimately, we need a financially sound market, with the government providing limited subsidy but mostly the right supporting frameworks,” Ogunbiyi said.
Under the current leadership, REA has been given a broader mandate to deliver access not just to rural villages, but also to small and medium-sized enterprises (SMEs) in urban areas.
“Our target is to connect 100,000 shops this year,” Ogunbiyi said. “We can’t touch everything, so we’re trying to scale through SMEs.”
The Energizing Education Program, a federal government project that aims to provide constant electricity to students at 37 federal universities and several university teaching hospitals, is another project in which Ogunbiyi is currently involved. She said a greater volume of data is needed to attract the billions of dollars needed to connect Nigerians to power grids and fulfil the country’s sustainability goals.