(Bloomberg) -- A global climate organization backed by the Rockefeller Foundation and the Bezos Earth Fund is piloting a solar mini-grid program in Nigeria that could provide the answer to the erratic power supplies that sap productivity in Africa’s most populous nation.
The Global Energy Alliance for People and Planet — formed in 2021 by the two groups along with the Ikea Foundation - helped build the first so-called interconnected mini-grid in December. Two more are under construction and there is funding for a fourth.
The facilities, operated by private developers, supplement the few hours of supply consumers get from the national grid to keep their businesses and homes powered around the clock.
Initially, Geapp wants to build a pilot in each of the regions covered by Nigeria’s 11 power distribution companies and ultimately facilitate 10 gigawatts of mini-grids. The program is adding to earlier efforts to build mini-grids in areas with no access to national power supply.
“We need hundreds or thousands of these kind of projects across Nigeria to end energy poverty” said Muhammad Wakil, country delivery lead for New York-based Geapp, in an interview at the site of one of the projects in Ogun State in southwest Nigeria. “We have shown it’s a viable business model.”
Nigeria has the world’s largest number of people without access to any electricity, about 86 million, and there’s little power for the rest of its population of about 230 million. The national grid supplies just 4,000 megawatts, about a sixth of the amount generated in South Africa where the population is a quarter of the size, and there are regular outages and occasional national collapses in supply.
“You have those kind of under-served communities that do require reliable power to power their homes and their businesses,” Fauzia Okediji, a utility innovation manager at Geapp, told Bloomberg TV’s Wall Street Week.
Geapp’s Demand Aggregation for Renewable Technology, or Dart, program pools the needs of several developers to cut the cost of solar equipment. It also operates a $25 million financing facility that developers borrow dollars from to import equipment and then repay in Nigeria’s naira currency when revenue starts to come in.
“That activity has observed savings of up to 30% for the developers,” Wakil said of the pooling arrangement.
Geapp provides grants, loans and technical assistance to mini-grid developers, taking advantage of a rule put in place by the government last year that allows the mini-grids to operate side-by-side with the national grids.
The success of the program has spurred the World Bank to pledge $130 million to develop similar facilities, said Wakil.
The site in Ogun State is a one megawatt solar mini-grid built by Darway Coast, a Nigerian mini-grid company. Its power will by year-end give the local community all-day electricity rather than the eight hours provided by electricity distributor Ikeja Electric Plc.
Welders, Schools
“In the new electricity act, everybody is open to creating energy and selling to customers,” said Fatima Haliru, power purchase manager at Ikeja Electric. “Instead of engaging them as competitors, it’s better to engage them as partners,” she said of Darway.
The more constant power supply will boost productivity in the area, said community leader Aleem Oloyede.
“We also have welders here, even health centers and schools,” he said. “We like the solar that is coming.”
The Dart program is seen as a model for the Mission 300 program announced by the World Bank and African Development Bank, who have together pledged $30 billion toward a goal of bringing electricity to 300 million Africans by 2030.
“I feel like Mission 300 is based on the Nigerian experience,” said Wakil. “Mission 300 is about expanding this, replicating it across at least 15 African countries.”
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