We have achieved 6.7m connection —Rural Electrification Agency

 

Ahmad Salihijo Ahmad is an energy, environmental specialist and the current Managing Director/Chief Executive Officer of the Rural Electrification Agency (REA). The agency is charged with the responsibility of providing access to reliable electric power supply for rural dwellers irrespective of where they live. Ahmad speaks, in this interview, on how his agency is boosting the economic development of rural dwellers while discharging their duties. Excerpts:

By Olalekan Bilesanmi

Your agency focuses on rural electrification and in implementing your mandate, several households are benefiting from improved livelihoods, could you please tell us about how your agency is contributing to this.

Primarily, the Rural Electrification Agency (REA) is an implementing agency of government, set up through the Electric Power Sector Reform (EPSR) Act of 2005, and is under the supervision of the Federal Ministry of Power.

The Agency is mandated to provide power to the unserved and underserved Nigerians nationwide. The agency in the last few years has been able to strengthen its engagements with private sector developers and other key stakeholders to deploy off-grid technologies for electrification, especially for productive-use and socio-economic impact in off-grid communities. With the availability of sustainable energy infrastructure in off-grid communities, energy access presents lots of opportunities for human development and socio-economic impact.

 In essence, there is a natural nexus between electricity access and economic development. We ensure that once we are able to intervene in a community, we just don’t provide the electricity, we try to see how that electricity translates into the enhancement of livelihoods. This is often achieved through proper community sensitization as well as the introduction of productive use models and equipment.

When you go into communities, do you have economic development in mind or how do you connect your work to economic development?

As I mentioned earlier, we all know the kind of role electricity plays in economic development. So, even within urban areas, we do realise that most of the activities that we do is linked to electricity.

It is the same thing you find when you look at rural communities. Some of the things we had to do deliberately, when I came in as the MD of REA, was to see how to continue to ensure that our activities continue to result in real impact in the lives of everyday people. One of the major things that we had to understand is that we needed to invest in infrastructure that will enable us generate power in the rural communities. So, some of the key areas we looked at is agriculture. Just because we understand that once you provide power in the agriculture space, it means that you are naturally empowering people to go into farming and this enhances their livelihoods. To be able to achieve such impactful results consistently, we need to keep track usage after the provision of that power. We follow up to see how that power is used. This is why beyond providing power in off-grid communities, we equally dedicate time and resources towards the productive use of energy (PUE).

 So, some of our programmes are designed strictly towards productive-use. For instance, within the Nigeria Electrification Project (NEP) and with support from the African Development Bank (AfDB), we have been given about 20 million dollars to invest in productive-use equipment and models in off-grid communities. And for the times that we have also gone around some of our existing mini-grids, we have seen that developers also provide additional funding from their own funding mechanism to also support productive-use, seeing how economically viable this model of ours has become and how it encourages energy use in off-grid communities.

When you talk about power, is it just solar or other forms of power?

When you talk about provision of power, what is critical is to understand the energy needs of individual communities, the type of technologies to deploy as well as other social and economic factors.

 For example, when powering a community that is say less than 5km away the grid, what makes sense will be to extend the grid depending on the type of distribution or transmission line that you have. You can deploy a transformer that steps down that power to enable a rural community to use that power. However, there are situations where you are unable to do that when you are 20km/25km away from the grid.

Meaning that extending the grid will not make much economic sense. In those kind of situation, what we try to do is deploy some decentralized off-grid technologies like a solar mini-grid, enabling so that community to generate and consume power in a decentralized way. Also, there are communities that are totally off the grid and have a very small population. Here, what you find is that households are dispersed and their power needs are very low. We address such with the use of solar home systems. What has informed the usage of these technologies is that solar technology is very easy to deploy, reliable and, like I mentioned, is clean. So these factors have helped us in taking these forms of data-driven decisions in the electrification of communities nationwide.

 Also note that in farming clusters where you have irrigation farmers, we also now deploy solar-powered irrigation pumps, enabling farmers to efficiently nurture their farmlands using renewable energy. Through the agency’s Research and Innovation Hub, we also continue to encourage R&D targeted at improving capacity for innovation and proffering smart, sustainable energy solutions to the nation’s energy problems.

What is the process of distributing these technologies? Is down payment made – how do they get it?

Through the Rural Electrification Agency, we have been in a position to provide power through various funding mechanisms. We provide power through what we have in the capital budget, for example. So, with those provisions in the capital budget, we don’t expect anything really from the rural communities, except building a sustainability plan with the Rural Electricity Users Cooperative Society (REUCS), a sustainability mechanism that allows community members to coordinate and sustain the infrastructure. However, as you have mentioned, there are certain kinds of funding we give to support only a private developer.

 These come in different forms – we have the Rural Electrification Fund; where we support through the provision of capital subsidies. We work with developers hand-in-hand to deploy the infrastructure and during the time of deployment, we give them (within their milestones) maybe 50 – 60% subsidy on their capital. And then we also have the result-based financing through the World Bank and the African Development Bank-funded Nigeria Electrification Project, where we are provide financing after the developer has actually deployed the infrastructure and is providing a service, then we give them 600 dollars per connection. So, to tie back to your question, depending on the funding mechanism, the expectation from the end-user will be different. 

In areas where government is providing that infrastructure as social development, obviously what they will be required to pay based on the sustainability plan will be much less because the infrastructure has already been provided. However, in areas where we are only providing a grant or subsidy, the rural dwellers are expected to pay for that power through a tariff system that we usually work with, and this is in line with the Multi-Year Tariff Order (MYTO) of the NERC.

How do you target your interventions to lead to economic development? How does REA (directly or indirectly) work to achieve improved livelihood interventions at the rural level? Example: Tell us about the structure that you have and use to achieve improved livelihoods.

As I mention earlier, I think the major way we have been doing this has been through productive-use and ensuring that we have the productive use equipment models within those communities. So, recently, we visited a community in Gwagwalada called Kaida where we built a 100kWp solar hybrid mini-grid that is mainly supporting agricultural processing of food such as rice and maize. We equally visited a similar one a few weeks ago in Gurin, Adamawa where the community is very strong in rice processing and are equally now powering their processors with the community’s 100kWp solar hybrid mini-grid deployed by the REA.

 So, how we’ve been doing this is, we look at a particular sector and intervene within that sector. Right now the major thing we do is around agriculture, around economic clusters like markets where we are deliberately targeting power to those key clusters; agriculture and local economies. One of the major reasons we must even do this (to your point earlier) is the need to be in areas where there’s a lot of economic activities, as this would encourage the rural dwellers that are using this power to actually have the resources to afford it. One very recent trend that we also noticed is that there are lots of activities around border communities.

 There are international border communities that have been recognised within the country, where today we have extended our impact to such areas. We visited one of such communities in Adamawa, a community called Belel, a vibrant border community, one of the top internationally recognized land borders. It became obvious that the community could afford and pay for the power that is being given to it. In this particular community, we already have discussions about expansion of the infrastructure due to population growth and usage. So, with the kind of business modules that we currently have, what is very clear is the need to deliberately situate those projects around areas that have economic activities – this is what makes the entire project sustainable and viable for the private developer. 

The agency is also currently implementing the Energizing Agriculture Programme (EAP) designed to boost GDP, accelerate renewable energy use and unlock agricultural productivity in Nigeria.

The EAP is a 3-year initiative activated in 2022 with support from the Rocky Mountain Institute (RMI), the Global Energy Alliance on People and Planet (GEAPP) and the Rockefeller Foundation, designed to enable market-led solutions while breaking the silos separating electrification and agricultural development. Currently, the delivery of the EAP is underway with data-driven groundwork such as surveys and holistic assessments being carried out by a team of enumerators, assessing viable clusters across the country.

Still going back to your question on energy access for economic development, we have witnessed great improvement in previously unserved communities now being powered through renewable energy. An example of such impact is present in Olooji community, Ogun State where we have a 100kWp solar hybrid mini-grid. Olooji is a community that has been in existence for about 200 years but received energy infrastructure for the very first time in 2021 through REA’s intervention.

The community continues to record socio-economic growth due to the functional and productive usage of that mini-grid. There is also an example of another 80kWp solar hybrid mini-grid constructed in Upake, Kogi State, known as the ancestral home of Ebira land. Upake community became the first community energized with a solar hybrid mini-grid under the REA’s Rural Electrification Fund (REF) Call 1. Note that as these projects are being constructed, the agency is equally increasing the number of renewable energy jobs in Nigeria while improving training and capacity development, especially amongst local residents in off-grid communities. Thousands of jobs have been created through the implementation of the agency’s programmes and initiatives.

Do you also dwell on other areas other than agriculture, other ventures such as local manufacturing, bakery?

We only use agriculture as an example to drive productive use in communities owing to the fact that agriculture is a common venture all Nigerian communities share. When we go into a community, naturally we have to do some kind of study to understand their energy needs as well as their key economic activities. And as you have rightly said, we have seen examples of small and medium scale enterprises thriving in these communities.

We find people running shops and powering their refrigerators to sell cold drinks within their communities. That, on its own is a commercial hub that can catalyse local economies. We are, therefore not restricted to providing energy access for agriculture alone. Depending on the major economic activities that we find within a community, our key mandate is to provide energy access. Then, availability of access and its utilization by the community now catalyzes productive activities. For example, after the deployment of the 90kWp solar hybrid mini-grid now providing sustainable energy in Kare, Kebbi State, a one-of-a-kind renewable energy-powered green house is now active in this community, designed through the NEP productive use component. 

Through this greenhouse, the community is now harvesting green pepper. We’ve also built a 100kWp solar hybrid mini-grid in Wakili Gurin, Adamawa State, where this community is now leveraging access to sustainable energy through this mini-grid to energize a community rice mill and other local businesses. Another key area I want to draw your attention to is healthcare. Through the provision of renewable energy infrastructure in primary healthcare facilities and isolation centres across the nation, most of those facilities have gone from spending N100, 000 a day on diesel to now delivering quality, prompt healthcare services, powered by renewable energy infrastructure deployed by the REA.

Under the Energizing Education Programme, REA has completed projects in seven universities. How important is it to not go into only underserved communities but also into schools where the lives of students are impacted?

In the course of the growth of the Rural Electrification Agency, we have found ourselves intervening and closing the energy access gap in education, under the guidance and supervision of the Federal Ministry of Power. Due to the important role energy access plays in national development, we are in a position to work closely with multiple sectors, where some of these needs are identified by the Ministry, as a policy maker, with the Rural Electrification Agency as an implementing Agency delivering on those projects.

 So, these are very important as you’ve mentioned. Education is very key and learning is key to the development of the entire country. This is what prompted the Federal Government, through the REA, to make this sort of intervention, especially because the universities form a very important part of the value chain of development in a country. Those projects you have mentioned are the ones delivered under the 1st phase of the Energizing Education Programme (EEP). 7 out of the 9 beneficiary universities in this phase have been energized with funding from the Green Bond.

 As a matter of fact, 5 out of the 7 completed EEP projects were delivered between 2020 and 2022. We have gone to all of them, and officially handed them over to the beneficiary universities, upon completion of the contractual one-year operations and management of those plants. Beyond accelerating the delivery of these projects, within this period, the World Bank and the African Development Bank have equally committed to funding phases II and III of the EEP, respectively.

These phases will energize 15 additional Federal Universities and 2 affiliated University Teaching Hospitals. Currently, we’ve gone into the procurement phase for 9 additional institutions under the phase II, with funding from the World Bank. The African Development Bank have equally committed to funding 8 EEP projects scheduled for phase III of the Programme. This programme is very key in the work that we do and we will continue to see how we can support the education sector.

With focus on economic development, how many households have you impacted so far?

So far, across all our programmes, we have achieved about 6.7 million connections, impacting about 10 million Nigerians. Specifically, we have impacted more than one million Nigerians through the Nigeria Electrification Project (NEP) solar home systems component alone.

 The mini-grid component of this programme has equally been very successful with over 65 solar hybrid mini-grids completed nationwide. The programme alone, which is now an exemplar off-grid model in sub-Saharan Africa, has achieved about 5 million connections. The agency delivered on over 95% of the NEP impact between the year 2020 and 2022. The NEP-SHS component is equally one of the fastest growing components being implemented by the agency. These projects have also catalyzed socio-economic activities across the beneficiary communities. Generally, due to the multi-dimensional impact.