Nigeria’s Rural Electrification Agency (REA) plans to seek private sector financing to shore up the institution’s N1bn annual budgetary allocation. This is in a bid to cover over 100 million Nigerians not connected to the national grid.
BusinessDay gathered that the REA is expecting $350mn funding support from the World Bank, the African Development Bank and the Department for International Development (DFID) as well as the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) to improve access to rural electrification.
“We are looking towards the private sector for funding solutions, as we have already shared our operational guidelines with them. We are encouraging them to come in and work with us. The provision of rural electrification to off-grid power consumers would lessen rural-urban migration and address concerns of unemployment,” Sanusi Ohiare, the Executive Director, Rural Electrification Fund, told BusinessDay exclusively.
About 100 million Nigerians are not connected to the grid, raising concerns of inadequate power supply to improve Nigeria’s economic diversification plans, amid dwindling revenue from the oil sector,
“We have done preliminary studies with the support of some international organisations, on the viability of 7,000 communities for mini grid deployment within the next 10 years,” Ohiare said.
“The REA requires N29bn annually to complete this project. But we just got N1bn budgetary allocation for the year, which is not enough for us to make any impact on Rural Electrification of about 100million off-grid Nigerians,” Ohiare added.
Speaking to BusinessDay on the sideline of the NEXTIER Power monthly event in Abuja, Ohiare explained that the Nigeria Electricity Regulatory Commission (NERC) has not complied with remitting some statutory contributions to the agency for some time now and has, according to him, made funding difficult for the agency.
“NERC ought to give us their contribution for the REA, apart from what we get from the government, so that we can advance our work. But as I speak to you, NERC has not. The money ought to come from the licence payment of operators, the DISCOs that are fined for various infringements, and certain percentage of their operation surplus,” he noted.
Many Nigerians are currently not connected to the National grid, as it still battles with epileptic power supply for the industries and population of over 180 million people who often resort to fossil energy solutions for their energy needs.
Furthermore, as a result of epileptic power supply, some higher institutions and industries are already looking towards other sources of energy supply, such as solar and renewable energy sources.
BusinessDay findings show that there is little or no appetite and less bankable appeal for rural electrification in Nigeria. Though about 70 percent are on-grid, they still rely on their various independent power sources to sustain operations.
In suggesting a way forward for rural electrification, they say mapping of the rural communities and the possible industrial and economic impact, would create bankable projects for would be investors.
“The government must do everything possible to woo investments into its rural electrification programmes. The concerns of youth unemployment could be greatly addressed if industries gradually relocate to rural areas, to avoid overconcentration in city centres. It is doable,” said Celestine Okeke, Lead Partner, Micro-Small-Medium Advocacy Initiative.
Some African countries are already doing better in rural electrification, while adopting the use of modern technologies. Kenya and Rwanda are good examples.
Nigeria, just out of an economic recession, is looking for ways of diversifying its economy. Industry stakeholders say the Nigerian government needs to focus on energy needs of consumers to address concerns of rural-urban migration and overconcentration of industries at major cities.
HARRISON EDEH, ABUJA
