Nigeria, the most populous country on the African continent with over 218 million inhabitants, is still a long way from achieving universal access to electricity, especially in rural areas. In recent years, the authorities have been focusing on autonomous solar systems. This policy will be discussed this week at the Energy Access Investment Forum (EAIF 2024) in Lagos.
On 3 April, the Rural Electrification Agency (REA) announced the commissioning of a mini-grid powered by a 352 kWp solar photovoltaic plant in the community of Toto, in the southern Nigerian state of Nasarawa. This equipment provides the local population with electricity and powers their income-generating activities. Like Toto, several communities in Nigeria have been electrified in recent years using autonomous solar systems, in particular mini-grids and solar home systems.
This is a direct spin-off of the Nigeria Electrification Project (NEP) implemented by REA. Since its official launch in 2019, the NEP has already enabled the electrification of at least 118,000 households via mini-grids and up to 1.4 million households with solar home systems. According to REA, nearly 6,000 micro, small and medium-sized enterprises (MSMEs) now have access to electricity thanks to these decentralised solar systems.
Subsidies for private companies
Nigeria owes this significant progress to a panoply of companies that have ventured into the electrification business. These include the French company Engie Energy Acces, the British company Bboxx, the American companies d.light and Husk Power, and the Dutch company Zola Electric. Under the CIP, most suppliers of solar home systems receive Outcome Based Funds (OBF).
The REA also provides Performance Based Grants (PBG) to solar hybrid mini-grid companies. This support is provided to professionals through initial funding from international donors such as the World Bank ($350 million in 2018) and the African Development Bank (AfDB, $200 million in 2028).
A fast-growing sector
Several other financial institutions are supporting rural electrification via autonomous solar systems in Nigeria. Such is the case of the investment company All On, wholly owned by the Anglo-Dutch oil and gas giant Shell. In June 2023, All On granted $11 million alongside the Global Energy Alliance for People and Planet (GEAPP) for the installation of 25 solar mini-grids across Nigeria.
There is also the European Investment Bank (EIB), which has just granted funding of $20 million as part of the European Union’s (EU) Global Gateway strategy aimed at “establishing sustainable and reliable links with partner countries”. The funding is earmarked for the American company Husk Power, which aims to electrify 500 rural communities over the next few years.
More than 85 million Nigerians still have no access to electricity
Despite these investments in solar energy for electrification, the challenge remains immense for Nigeria. According to the World Bank, 85 million Nigerians still had no access to electricity in 2021. This situation concerns 66% of its rural population, according to Power Africa. At the same time, access to electricity, which stands at 86% in the cities, is not secure.
Households and businesses are still experiencing load shedding. As a solution to this problem, some businesses are turning to generators, which increase air and noise pollution in major cities such as the economic capital Lagos, which has a population of over 22 million. Be that as it may, the choice of mini-grids for electrification in this West African country has had a positive impact on its socio-economic development. Other sub-Saharan countries are following the same path. These include neighbouring Niger, Kenya, Somalia and the Democratic Republic of Congo (DRC).
Jean Marie Takouleu
