Why up-scaling investment for off-grid alternative energy makes sense

In last few years, government has consistently weighed several options as possible solutions to the seemingly irresolvable power sector challenges.

A cursory look at one option open to government throws up the idea of deepening investment in off-grid alternatives to complement the national grid seeing that power generation stand at the heart of the solution to energy shortfall in the Nigeria.

According to a joint analysis carried out by several power agencies found that developing off-grid alternatives will create a $9.2B/year (N3.2T) market opportunity for mini-grids and solar home systems that will save $4.4B/year (N1.5B) for Nigerian homes and businesses and subsequently unlock the nascent mini grid market in Africa.

In the opinions of those who know, getting off-grid Electricity solutions to a commercially viable scale in Nigeria has the potential to unlock an enormous market opportunity in sub-Saharan Africa, across 350 million people in countries with smaller demand and/or less-robust economies.

Babatunde Raji Fashola, Minister of Power, Works and Housing at a five day summit organised by Nigerian Rural Electrification Agency in partnership with the World Bank Energy Sector Management Assistance Programme (ESMAP), the Rocky Mountain Institute (RMI), Climate Investment Funds (CIF), and UK Department for International Development (DFID), said policies have been developed to help entrepreneurs fast-track energy access for underserved populations.

Fashola lauded the instrumental partnership of the World Bank in developing the power sector and the Rural Electrification Agency for developing data to help private developers reach the communities they need.

Organisers of the forum opine that it was designed to accelerate action on scaling up mini-grids to help countries reach universal energy access by 2030, and was the fourth in a series of successful events on mini-grids organised by the global community in the past two years.

Industry close watchers insists that engaging in event like represents a clear indication of the commitment of the Federal Government of Nigeria towards supporting investment in off-grid electrification initiatives and the vast investment opportunities in Nigeria for the development of mini-grids and roll out of solar home systems which have a combined potential market of $9.2 billion annually.

Industry analysts observe that over time a common challenge to mini-grid market growth is the fact that investors view the market as being too risky, which makes gaining access to adequate project financing rare and the market rate debt expensive.

They are however very optimistic that Nigeria is well positioned to not only address market barriers but also to showcase to other nations that mini-grids are commercially viable.

Mac Cosgrove-Davies, Global Lead Energy, Access, World Bank, said the World Bank and the Government of Nigeria are working together to make mini-grids a viable solution to bridge a large share of the electrification gap in the country, and the Rural Electrification Agency will be the implementing agency for the fund that

The aim of Rural Electrification Agency is to roll out 10,000 mini-grids rapidly to support the underserved communities in Nigeria and with the current regulatory landscape; Nigeria is the best market to do mini-grids.

KELECHI EWUZIE