Managing Director of the Rural Electrification Agency, Dr. Abba Aliyu, in this interview with select journalists, speaks on the agency’s landmark completion of a nationwide energy mapping exercise that identified over 750,000 communities and the pivotal role of electricity as the underlying infrastructure powering economic growth. Excerpts!
How critical is the power situation in Nigeria today, especially given emerging global technological shifts like Artificial Intelligence?
Power stimulates economic development, stimulates economic growth, enhances agriculture, enhances quality of health services, enhances quality of education… more especially now when it comes to the era of artificial intelligence. The future is electrification of everything, which means that whatever you’re going to do, it will be dependent on electricity and AI would be at the center of that.
If you are going to get a medical treatment, it will be powered or based on AI. Precision agriculture is already taking place; AI is enabling that. Manufacturing, all these things. But AI also cannot perform without electricity. Electricity is the backbone that powers AI, and I give you a typical example.
Many of us have used ChatGPT, which is a known AI platform but what many of us do not know is behind that AI or behind that answer is a packet of electricity that the AI is using to give you that answer. We are already seeing it a lot
The corridor of the future is that electricity is going to determine whatever we are going to do and in Nigeria, we are not left behind. Under the administration of Mr. President, we are going towards making sure that every single Nigerian is electrified.
This is the wisdom of the current administration: providing grants for production rather than consumption. We catalyze the private sector to deploy infrastructure by providing capital grants to de-risk the deployment cost, which by extension reduces the tariff cost.
How does this focus on productive energy translate to practical support for agricultural clusters across the country?
One of the key priorities that we did while we were planning is identifying key government institutions focusing on three sectors: agriculture, health, and education. In agriculture, we were able to determine in our plan where the agricultural clusters were, be it a production cluster or processing cluster knowing that one of the greatest challenges affecting the agricultural sector of Nigeria is post-harvest losses. Post-harvest losses can only be addressed if you provide productive use of energy or if you provide electricity.
Last year, we were in Plateau State in a local government called Quan’pan, in a community called Namu. This is one of the richest agriculturally fertile communities. It’s a rice production area. However, within Namu, there is a cluster where they do rice processing, but they are dependent on diesel processing of the rice. Because of the cost of diesel, it makes their rice not competitive in the market. The cost of diesel and other costs of processing, if they accumulate it and bring their rice to the market, the cost is much more than the market price of a bag of rice.
We deployed under one of our programs called Africa Mini-Grid a 50 kilowatt as a test model, and that 50 kilowatt took one of their biggest rice processing plants off diesel, and now over 200 bags of rice being processed under the mini-grid that we deployed is competitive in the market.
Now we are deploying close to 5 megawatt from 50 kilowatt—this is like a 1,000% increase—we are deploying 5 megawatt to power the entire remaining 37 factories and all the communities within that.
What guides the implementation of your projects?
For the first time ever, we have completed the mapping of the entire country, which is guiding us with very good data of where we should intervene, how we should intervene, and what kind of technology we should intervene. Nigeria has had about 16 presidents, and I checked each one of them came with the well intention to address electricity access challenges, but what has been missing is none of them came with a structured plan to say that ‘okay, let’s face this electricity access situation, let me look at these millions of Nigerians that are without electricity access and let’s have a plan to electrify them.’ None.
Under my leadership, we identified over 750,000 communities that exist in the country from Lagos State, the biggest community with over 2.5 million households, to communities that are just two or three houses. We have the data. We know the number of houses in each community, we know whether the community is electrified or undeserved or not provided with electricity, and we know the least cost of providing that community: should we provide them with standalone solar systems, should we provide them with isolated mini-grids, should it be interconnected mini-grids, or should we extend the grid? That plan is what made it very easy for us.
How does the revised mini-grid regulatory framework allow the REA to deploy larger projects than before?
It’s one of the major achievements also that we recorded under this administration. If you look at the previous mini-grid regulation, the highest capacity of a mini-grid we can deploy is 1 megawatt, and we have been very vocal about it. We informed the regulator that Nigeria needs to be much more ambitious than just 1 megawatt of mini-grid capacity. If you look at other African countries that do not even have electricity challenges as we have, they have a mini-grid regulation where the private sector can deploy up to 50 megawatts of a mini-grid. We informed the regulator, we had contributions, and based on that they reviewed the regulation. Now we can deploy up to 5 megawatts of isolated mini-grids and 10 megawatts of interconnected mini-grids.
How is the agency aligning its efforts with subnationals under the Electricity Act?
For the Rural Electrification Agency, we are very innovative in that regard. Last year we created what we call the ‘State-by-State Roundtable’ where we bring in the entire executive management of the states led by the executive governors to Abuja, alongside the private sector and the REA. It’s not just a show. The State-by-State Roundtable is an opportunity, one, to harmonize what the subnationals are doing and what REA is doing.
Last year we did this with 27 states, and we are continuing with Anambra, Taraba, plus all other remaining states including Abuja.
How does the deployment model guarantee both long-term sustainability and financial inclusion for rural users?
In all mini-grids we deploy, we install 100% metering and SCADA systems to track every single electron generated from solar farms to households or businesses.Once you take electricity to rural communities, be rest assured that that community will be financially included and many more people will come trooping to the community. In a community in Abuja for example, before the deployment of a mini-grid, there was not a business center, no POS center, nothing. However, with the deployment of a mini-grid with guaranteed 24/hr electricity, not only were more businesses established, the people of that community now use their phones to buy credit for their meters to power their households. We currently have a collection rate of up to 97%. Our projects are catalyzing small and medium businesses.
We also moved completely from the traditional system of public service infrastructure deployment where the government is the main deployer or where the government just issues a contract. No, we designed a program that enshrines sustainability in all our programs.
In deploying the infrastructure with private sectors, we created a cluster or an ecosystem of what we call the RESCOs—Renewable Energy Service Companies. These are companies that are well trained in deploying renewable infrastructure. In addition, we designed what we call Result-Based Financing (RBF). We do not just issue a contract to the RESCOs, we ask the RESCO: go and get debt or equity financing, take our data, take any of the communities, deploy this infrastructure.
What steps is the REA taking to build domestic solar manufacturing capacity in Nigeria?
Globally, there are just seven main manufacturers of solar PV panels, and all of these seven control 75% of the total world production capacity, and they are all Chinese companies. We know that and we can’t compete with China. Even developed countries cannot compete with China when it comes to that.
Our strategy was very clear. What we are saying is we want a slice of that pie… We signed a joint development agreement for the establishment of 3.7 gigawatt manufacturing capacity all over the country: four of them in Lagos/Sagamu axis, two in Kano, two in Akwa Ibom, one in Bayelsa, two in Lagos that have already started.
Secondly, we also catalyze the off-take of some products that Nigerian companies would do. For example, a PV manufacturing company in Ikotun in Lagos—Levin Energies—is already producing, has a 150 megawatt production capacity, not only producing and selling in Nigeria, their company is also even exporting to Accra in Ghana. In Abuja already, there are over 400 megawatt of manufacturing capacity. Nigeria will be a hub of renewable manufacturing in the near future.
INTERVIEW: We are funding power for production not just consumption — REA MD, Abba Aliyu