On 14th & 15th of October 2021, the Rural Electrification Agency (REA) held e-roundtable discussions with SHS Grantees and Mini Grid Developers via zoom for the Output Based Fund (OBF) and the Performance Based Grant (PBG) sub-components of the Nigeria Electrification Project (NEP). The purpose of the e-roundtable discussions was to communicate new developments and recent updates with the Solar Home System Distributors and the Mini-grid Developers. The session addressed modifications, findings and feedback related to the verification process, environmental and social implications of the projects as well as the grant rate increase under both sub-components.

Mrs. Anita Otubu (Head Project Management Unit of the NEP) gave the opening remarks which was followed by a welcome address by Engr. Ahmad Salihijo Ahmad (MD/CEO, REA). The MD reiterated the importance of the roundtable discussions which was to promote transparency and efficiency across the two (2) sub-components as well as provide updates on recent findings and the implementation status of the OBF and PBG respectively.

The objective of the NEP, is to provide access to clean, safe, reliable and affordable electricity services to unserved and underserved peri-urban and rural communities in partnership with private sector companies. This brought about the introduction of the OBF & PBG grant mechanism which has thus far proven highly efficient in bridging the electrification gap within the country.

The closing remarks were delivered by Jon Exel (Task Team (TTL), World Bank). He highlighted that the increase in the grant rate will effectively accelerate growth within the private companies as there is to be significant demand for SHS units and the deployment of mini-grids. This change will allow distributors and developers cover a wider range of connections within unserved and underserved peri-urban and rural communities across Nigeria.

The Agency sensitized stakeholders on the NEP and Solar Power Naija with the aim to increase private sector participation and explore areas of partnerships. The workshop reiterated the Federal Government’s commitment on the need to provide renewable energy solutions that will complement the traditional grid extension as a means of delivering electricity to the unserved and underserved communities.

The event brought together about 560 participants across the country and international space to familiarize and participate in the available programmes under the REA. Participants were enlightened on the guidelines and application processes for the solar-hybrid mini-grids, Solar Home Systems (SHS) and the Productive Use Appliances and Equipment (PUE) components of the Nigeria Electrification Project and Solar Power Naija.

The workshop was interactive with contributions and questions from participants on clarifications about how to participate and partner with the agency to deploying mini-grids, SHS in rural communities across the country.

The government expressed the hope that if well implemented, the scheme will generate N7 billion in taxes and $10 billion in import substitution every year.

It noted that the programme will not only support the economic recovery efforts in response to the Covid-19 pandemic, but will also increase local content in the off-grid solar value chain and facilitate the growth of the local manufacturing and assembly industry.

A statement issued to journalists during the event by the Rural Electrification Agency (REA), the implementing agency, quoted the Vice President Yemi Osinbajo, as saying that the solar mini-grid programme will incentivise the creation of 250,000 new jobs in the energy sector.

“This programme is expected to generate an additional N7 billion increase in tax revenues per annum and $10 million in annual import substitution. The solar connection scheme is a federal government initiative with the objective to expand energy access to 25 million individuals (five million new connections) through the provision of Solar Home Systems (SHS) or connection to a mini grid,” he said.

In addition, Osinbajo noted that the solar connection intervention facility from the Central Bank of Nigeria (CBN), will complement the federal government’s efforts to provide affordable electricity to unserved rural communities.

“This will be done through the provision of long-term low interest credit facilities to the Nigeria Electrification Project (NEP) pre-qualified SHS distributors and mini grid development companies. This also includes qualified home solar value chain players such as manufacturers and assemblers of solar components. The Nigerian government is committed to resolving the challenges and delivering the president’s objective to deliver efficient, stable, and reliable power to Nigerians and put Nigeria on the path to economic recovery,” Osinbajo said.

Speaking during the event, the Managing Director of REA, Mr. Ahmad Salihijo, reiterated that the “Solar Power Naija Programme,” seeks to connect five million unserved and underserved households and businesses and serve about 25 million Nigerians. He added that it will help address the challenge of access to affordable finance through the CBN facility, which makes low-cost local currency debt available to qualified companies.

“Private companies will be supported to employ more Nigerians to be able to provide services in the area of manufacturing, distribution, installation and other project management and after-sales services. Solar power naija will leverage on the support from our donor partners such as the World Bank, USAID, SEforALL and FCDO in the areas of data on locations, programme design, manufacturing framework and quality assurance. The programme also supports manufacturers and assemblers of solar technology to set up production facilities in Nigeria, in order to support the off-grid energy sector with about 250,000 new jobs, ” Salihijo stressed.

He called on the donors to continue providing support to help in making the off-grid sector commercially viable and in making electricity available and affordable to the off-grid population. “Additionally, this will further confirm our commitment to reducing our greenhouse gas emissions by 20 per cent by 2030, when compared to the business as usual levels. I want to encourage other stakeholders from government agencies to donor partners to the private sector to support us in achieving this huge task of delivering 5 million connections to 25 million Nigerians. Companies involved in the assembly and manufacturing of components of off-grid solar solutions must be 70 per cent Nigerian owned as the entire ESP is meant to facilitate and spur local productivity,” the REA boss said.

As the implementing agency of the programme under the supervision of the ministry of power, the REA boss noted that it further shows government’s commitment towards supporting the private sector to develop decentralised energy solutions in locations where the grid is not viable or service is inadequate. “I want to encourage private companies to take advantage of this intervention and work with us towards achieving the set targets under the programme,” he said.

News source: https://www.thisdaylive.com/index.php/2020/12/02/fg-targets-n7bn-revenue-10m-from-solar-power-rollout/

The programme will include the assembly and manufacturing of components of off-grid solutions to facilitate the growth of the local manufacturing industry, while the use of local content will be incentivized, the source added. Confirming the development, the Senior Special Assistant to the President on Media & Publicity, Office of the Vice President, Mr Laolu Akande, said the work plan for the implementation of the N140 billion Solar Home Systems, a component of the ESP, indicates the first set of installations will be done nationwide in December 2020.

By its design, the programme will cover up to five million households, serving about 25 million individual Nigerians who live mostly in rural communities and not currently connected to the national grid

Based on the plan of the Economic Sustainability Committee, set up in the year by the President, who asked the Vice President to chair, the Central Bank of Nigeria (CBN) will make funds available to the private companies in the solar power subsector involved in the manufacture, assembling, installation, servicing of the solar systems, at rates ranging between 5 to 10 percent, way below the current commercial lending rates in the country.

Sources say the objective of providing cheap credit for companies involved in the programme is to significantly reduce the cost of acquiring the system by end-users who are Nigerians most of whom are not being served by the national grid.

“The reduction in the lending rate will be a big incentive for the private sector under the ESP while also making power and energy more affordable for the 25m Nigerians when compared to consumers of electric power. The Solar Home System, as an important component of the Buhari administration’s ESP, is designed as part of measures by the federal government to ramp up power supply across the country by catering specifically for communities not connected to the national grid.

“It is also part of the administration’s strategy to address the overall challenges and issues in the power sector as Solar is not only cheaper but considered to be cleaner and renewable. Aside from providing access to affordable energy, the objective of the plan is to improve social, economic and environmental welfare of 25 million Nigerians while generating jobs, increasing revenues and import substitution. Regarding jobs, the ESP 5m Solar installation is expected to create about 250,000 jobs including in manufacturing, assembling, installations, maintenance and payment systems,” Akande explained.

News source: https://thenationonlineng.net/installation-of-n140bn-solar-power-solution-starts-next-week-presidency/

The objective of the Standalone Solar Home Systems component of the Nigeria Electrification Project is to provide access to millions of Nigerian households and Micro Small Medium Enterprises (MSMEs) with affordable energy services through private sector companies. This in turn will significantly scale up the market for SHS in Nigeria.

With the signing of these grant agreements, about 75,953 SHS Units will be added to the existing 200,000 SHS connections since the project was launched in 2019. The 6 companies are expected to deploy the following number of SHS units:

1. Solar Sisters Inc. & Affiliate 4, 663 SHS
2. Fenchurch Offgrid Energy Systems Limited (SOLARPAWA) 5, 000 SHS
3. Morton78 Limited 8, 550 SHS
4. Creeds Renewable Energy Ltd 3, 600 SHS
5. Beebeejump intl Ltd 52, 500 SHS
6. Azuri Nigeria 1, 640 SHS

The scope is for over the next two (2) years thereby increasing the number of households and MSMEs to have access to clean, safe, reliable and affordable electricity before the end of the project. This event is a testament to the Federal Government of Nigeria’s determination to secure a better future in the Power sector by focusing on providing off-grid solutions to increase electricity access across the Country.

REA encourages more Private Sector Companies to leverage on this opportunity to achieve the goal of electrifying one house, one business, one community at a time. They can also participate in the Solar Power Naija (5M Connection) programme by visiting our website www.nep.rea.gov.ng

In his remarks in Jangefe community in Kazaure Emirate of Jigawa state during the programme launch on Saturday, Osinbajo said as the cost of installing and maintaining solar devices becomes cheaper, Nigeria has the opportunity to provide power for its citizens. He said, “This programme marks a milestone to focus effort for Nigerians to have access to electricity. We cannot continue to hold on to the national power grid and to achieve the decentralisation of power, an alternative source like renewable energy with cheaper facilities will help us achieve the dream of electrifying Nigeria and the time is now.”

Osinbajo, while stating that 25 million households would benefit from the programme in the entire phases, said it is aimed to ensure that the country will stop reliance on the national grid and help to serve communities that are not served or underserved. The programme which is part of the Economic Sustainability Plan (ESP), is implemented by the Rural Electrification Agency (REA) and would create over 250,000 jobs, as part of reversing the effects of the COVID-19.

The Minister of Power, Sale Mamman, at the event said the project would generate N7 billion in tax for the federal government per annum. The launching is of the second phase 100,000 deployment of SHS to households in jangefe community at Roni LGA, Jigawa State. The electricity users are expected to pay N3,500 monthly rent before taking ownership of the power system after five years.

The launching had in attendance the Governors of Jigawa State, Abubakar Badaru and his Kano counterpart, Abdullahi Ganduje. Others include, Engr. Ahmad Salihijo Ahmad, MD/CEO of REA, the ED REF and his colleague ED TS and some REA management staff.

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This was about 2010, when the growth of clean energy around the world made it start to seem like a potential career path. The industry hadn’t gained much traction in Nigeria, and he set aside the idea, until a conversation with a relative persuaded him to reconsider.

“A cousin told me not to go where the money is but where the money is going,” he says. “I immediately changed my mind and applied for a master’s degree in renewable energy, and I got a scholarship.” That sent him to Newcastle University in the U.K. and then on to a range of public and private jobs in his home country’s renewables industry, including projects that had received World Bank funding.

Now, as technical project at the Rural Electrification Agency, he’s one of the officers helping implement Nigeria’s largest investment in solar power, part of the country’s Covid economic recovery plan. The project, Solar Power Naija, is also a step toward solving one of Nigeria’s biggest problems: a lack of reliable electricity. Under the Paris Climate Agreement, Nigeria has pledged to cut carbon emissions 20% by 2030. To get there, it aims to generate 30% of its energy from renewables. To make progress, 10% of the government’s 2.3 trillion naira ($5.6 billion) of spending to spur recovery from the pandemic will be used to install 5 million solar home systems. The aim is to provide electricity to 25 million people in rural communities that now have no access to the grid

With Solar Power Naija, the government is aiming to fix the development problems that a lack of access to electricity has created, as well as the pollution that fuel-powered generators, one of the most popular power sources, cause. “Rural communities, the companies, and people that are using generators or even candles would have access to a cleaner and more efficient power supply,” Babamanu says. “Emissions will be greatly reduced.” The rollout will focus on building standalone connections, which use solar panels to charge batteries that can then be used at any time, and mini grids, which operate in a way but can service larger needs. Both will function separately from the national grid.

The project will also give bidders from across the industry low-interest government loans instead of contracts or grants to finance the equipment and construction—a departure from Nigeria’s normal approach to electrification. Companies will repay what they’ve borrowed with income from customers. “It’s good that the government is trying to use renewables not just as a tool for solving the energy problem but also for poverty alleviation,” says Adedeji Adeniran, a senior fellow at the Centre for the Study of the Economies of Africa in Abuja. “This shows it’s taking the sustainable agenda seriously.”

News source: https://www.bloomberg.com/news/articles/2021-04-08/nigeria-bets-on-solar-to-power-its-covid-recovery

The solar connection Scheme is a Federal government initiative whose objectives are:

1. Expand energy access to 25 million individuals (5 million new connections) through the provision of Solar Home Systems (SHS) or connection to a mini grid
2. Increase local content in the off grid solar value chain and facilitate the growth of the local manufacturing and assembly industry
3. Incentivize the creation of 250,000 new jobs in the energy sector.

The Solar Connection Intervention Facility from the Central Bank of Nigeria (CBN), will complement the Federal government’s effort of providing affordable electricity to unserved rural communities through the provision of long-term low interest credit facilities to the Nigeria Electrification Project (NEP) pre-qualified SHS distributors and mini grid development companies. This also includes qualified home solar value chain players such as manufacturers and assemblers of solar components.

The REA Managing Director, Ahmad Salihijo Ahmad, expressed optimism over the determination of the Federal Government to transform the power sector in accordance with its Next Level agenda. He stated that, “This is a testament to our dedication and commitment to scaling the off-grid solar market through provision of long term low interest credit facilities to the Nigeria Electrification Project (NEP) pre-qualified home solar value chain players that include manufacturers and assemblers of solar components and off-grid energy developers and retailers in the country”.

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A government official told journalists in Abuja, on Saturday that the programme would include the assembling and manufacturing of the components of off-grid solutions to facilitate the growth of the local manufacturing industry. The Senior Special Assistant to the Vice President on Media and Publicity, Laolu Akande, also confirmed the move. Akande said the work plan for the implementation of the N140bn Solar Home Systems, a component of the ESP, indicates that the first set of installations would be done nationwide in December 2020. The programme is designed to cover up to five million households, serving about 25 million Nigerians, who live mostly in rural communities and who are currently not connected to the national grid.

According to the plan of the Economic Sustainability Committee, the Central Bank of Nigeria will make funds available to the private companies in the solar power subsector involved in the manufacturing, assembling, installation, servicing of the solar systems, at rates ranging between five to 10 per cent, way below the current commercial lending rates in the country.

The official said, “The purpose of providing cheap credit for companies involved in the programme is meant to reduce the cost of acquiring the system by end users, most of whom are not being served by the national grid. “The reduction in the lending rate will be a big incentive for the private sector under the ESP, while also making power and energy more affordable for the 25 million Nigerians when compared to consumers of electric power.

News source: FG commences solar installation for five million homes – Punch Newspapers

On the 2nd of August, 2022, the REA, Federal Government’s implementing Agency for the Solar Power Naija (SPN) programme officially signed a Memorandum of Understanding (MoU) with Infrastructure Credit Guarantee Company Limited (InfraCredit), a third-party guarantor for approved developers under the SPN programme. The MoU is designed to deepen and strengthen the strategic partnership between the REA through the Solar Power Naija (SPN) Programme and InfraCredit in a bid to catalyse long-term local currency investments into the Nigeria solar off-grid space.

As a key stakeholder in the nation’s financial sector and an institution with a robust history of unlocking potentials for long-term local currency infrastructure finance in Nigeria, InfraCredit has continued to walk in lockstep with the SPN Programme, while ultimately enabling private sector developers within the space to scale the bottlenecks involved in accessing off-grid infrastructure financing.

As a strategic reaction to the impact of the COVID-19 pandemic, the SPN Programme was launched as a critical component of the Federal Government’s Economic Sustainability Plan (ESP). The SPN is being implemented by the REA to ultimately meet the objectives of providing renewable energy access to 5 million households, impacting about 25 million Nigerians while providing 250,000 new renewable energy jobs. The Programme also aims to improve local content in the off-grid space by supporting the financing of upstream companies in the business of manufacturing and assembly.

While commending the InfraCredit team, led by its Managing Director, Chinua Azubike, the MD/CEO of REA, Engr. Ahmad Salihijo Ahmad reiterated the relevance of such deliberate partnerships and the need to consistently support private sector players in the off-grid sector. He added that with the quality of the Facility being provided by InfraCredit under the SPN, developers are able to reach more homes and communities across the nation.

The Managing Director of InfraCredit, while emphasizing the sustained commitment of the REA reaffirmed the company’s commitments to eliminate challenges lenders face within the ecosystem through the simplification of transactions which allows prompt delivery of off-grid infrastructure to Nigerians. He added that the SPN Programme, led by Barbara Izilein, Head SPN, has been supportive so far and they expect this support to continue as they expand their portfolio of clean energy projects in the country.

The Agency’s Executive Director, Technical Services Engr. Barka Sajou expressed his delight about the strategic partnership while commending InfraCredit and other private sector players who have keyed into the REA mandate to provide sustainable energy to the unserved and the underserved.

While urging private sector players to explore opportunities for collaboration with the REA, the Executive Director of the Agency’s Rural electrification Fund (REF), Dr. Sanusi Ohiare commended InfraCredit for its deep understanding of the business of energy in Nigeria. Mr Alaba Netufo, the Agency’s Executive Director, Corporate Services reemphasized the importance of providing guarantees while deploying off-grid infrastructure at scale.

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As part of efforts of the Rural Electrification Agency (REA), targeted at the accelerated deployment of renewable energy infrastructure for socio-economic development, the Agency convened a virtual Roundtable on the Solar Power Naija Programme (SPN) on Monday, the 20th of February 2023, with select private sector developers in the off-grid space. The Roundtable, the first in the year 2023, forms part of the Agency’s efforts to catalyse access to financing for developers in the off-grid sector through the SPN.

The Head of Solar Power Naija, Ms. Barbara Izilein while addressing the attendees, on behalf of the REA’s Managing Director/CEO, Engr. Ahmad Salihijo Ahmad appreciated the developers for engaging actively at the Agency’s Roundtables, assuring them of the Agency’s continued commitment towards providing the necessary support needed for a vibrant, private sector-driven off-grid ecosystem in Nigeria.

Ms. Izilein also delivered a presentation to provide better context on the SPN and detailed the various potential funding pathways now available to developers through the programme following engagements with investors. She also provided an update on the ongoing transactions under the programme following which a robust discussion session including discussions around the proposed investor match-making session set to hold in a few months.

A key programme initiated through the Federal Government’s Economic Sustainability Plan (ESP) in the year 2020, the SPN is being implemented by the REA in collaboration with key stakeholders in government as well as the private sector. The programme is designed to achieve 5 million new connections, impacting about 25 million Nigerians through renewable energy.

The implementation of the programme is underway, already increasing local content in the off-grid solar value chain, facilitating the growth of the local manufacturing industry while incentivizing the creation of 250,000 new jobs in the energy sector, upon full implementation.

At the completion of the knowledge-driven, impact-focused Roundtable, developers had a renewed understanding of the SPN programme, the funding pathways available to them, and the key next steps on their application to the funding pathways.