What is the best way to measure the momentum of renewables in Nigeria? Apparently, by the speed at which big generator makers in the country are considering branching into renewable energy to find a growth path for their businesses to build a sustainable enterprises.
Sources tell BusinessDay that leading generator makers including Jubaili Bros, Cummins West Africa and Mikano International are considering morphing into power companies capable of providing power through a variety of means including renewables.
Jubaili Bros, a diesel generator manufacturer and seller is leading the pack, committing to install solar systems at its facilities in Lebanon, Nigeria, UAE and Afghanistan. The total amount of the solar power produced from these facilities, when it is completed will be around 500 KW, the company has said.
“Diesel generators has been the primary solution, we offer to provide quick on demand electricity to our customers. However in a bid to deliver other options, Jubaili Bros has invested and developed renewable energy alternatives, in particular solar with or without a battery backup,” the company said.
The company’s strategy is to combine renewable energy with traditional diesel generators to cut fuel consumption cost, at the same time retaining the flexibility of having on demand power supply anytime of the day or night.
“Our hybrid solutions are optimum for telecom application, off grid remote locations, and even for grid connected application in locations where the utility power supply is unsustainable,” the company said.
Mofid Karameh, CEO of Mikano International in an interview said, “The next step for us is to go into power supply. We are thinking of building a big power station. There are many different power needs in the country from big development companies, industrial projects to banks. We will supply power to them directly and would not sell generators to them anymore. These are the new steps for the business. Not to supply machines but to supply power. What do customers want? They want power. They do not want to buy equipment.”
This seems to be the new thinking in the industry, to move from selling power generators to becoming power companies capable of delivering power from gas or renewable energy sources.
This situation is fuelling optimism for the off grid space in Nigeria valued at over $9.2 billion. Damilola Ogunbiyi, managing director of the Rural Electrification Agency (REA), in a recent mini grid conference said the annual investment potentials in Nigeria’s mini grid electricity market is now worth up to $9.2 billion urging investors to cash in on the opportunities presented. The generator makers clearly have no plans to watch from the side-lines.
“Jubaili is very smartly repositioning themselves as a power company rather than a generator company and are transitioning to hybrid generation models including solar. This is an important step in the evolution of the off grid energy sector in Nigeria,” said Wiebe Boer, CEO of All On, a Shell-seeded impact investment firm.
Nigeria’s offgrid market is lighting up with players reporting feats once thought impossible. Lumos Global, a solar home systems company that attracted about $90million in funding in 2016, has reached a customer base of 300,000 which is only 100,000 short of Kaduna Electric’s customer base. The company delivered a combined wattage of 5.6MW in 2017 or 10 percent of what Ikeja DisCo gets from the Transmission Company of Nigeria (TCN) on a good day.
BusinessDay gathered that four operators in the offgrid space attracted over N200m in funding in 2017 alone. These feats have been made possible with support from international development agencies like U.S. African Development Foundation (USADF), an independent U.S. Government agency established by Congress to support and invest in African owned and led enterprises and All On.
In December, USADF and All On announced the creation of a N915 million ($3m) partnership with the goal of expanding access to energy for underserved and unserved markets in Nigeria.
Over the next 3 years, both parties will jointly provide funding for up to 30 Nigerian small and medium enterprises that improve energy access through off-grid energy solutions spanning solar, wind, hydro, biomass and gas technologies. USADF will provide grant funding to the selected companies while All On will provide an equal amount of impact capital in the form of convertible loans and/or equity.
ISAAC ANYAOGU
