With the majority of Nigerian not having reliable access or even access to electricity in rural areas, one of the country’s banks, Bank of Industry (BoI), is calling on more investment in off-grid solar. The banks MD and CEO, Rasheed Olaoluwa, called rural communities in Nigeria to have affordable off-grid solar home systems that are operated on a Pay-As-You-Go (PAYG) basis.
Speaking during the presentation of checks to two off-grid solar home system providers at the BoI office in Lagos, Olaoluwa stated that rather than wait for Nigeria to solve the national electricity crises and the national grid to reach the rural communities, the country could bring affordable off-grid solar home systems to those communities.
Olaoluwa said PAYG addresses two problems; firstly, the cash flow constraint for the customer, and secondly, the credit risk management issue for the service provider.
“Nigeria, nay Sub-Sahara Africa, is geographically fortunate in this regard, given our tropical location, as we are largely sandwiched between the Tropic of Cancer in the northern hemisphere and the Tropic of Capricorn in the southern hemisphere, giving us an above average level of direct solar radiation,” he added.
The BoI MD held East Africa up as an example as it was already leading the way for sub-Saharan Africa, as M-Kopa, a subsidiary of Kenya telecom giant Safaricom, has installed the solar home systems to over 180,000 rural homes in Kenya, Tanzania, and Uganda.
“This is exactly what we seek to replicate in Nigeria with our partnership with GVE Projects Limited and Arnergy Solar Limited. These two companies were selected from eight companies that responded to our RFP in 2014. GVE Projects Limited is a winner of the Power Africa off-grid Energy Challenge, organized by the US African Development Foundation (USADF), the USAID and General Electric (GE) in 2011. In 2013, the company implemented a 6KW PV solar rural mini-grid at Egbeke, Rivers State and is currently implementing an 18 KW PV solar mini-grid at the same location,” he explained.
“Arnergy Solar Limited specializes in the provision of clean energy to customers in the Bottom of the Pyramid (BOP). The company has implemented stand-alone PV solar systems in communities in Lagos and Ogun States. We are starting off with the provision of long-term financing for the installation of off-grid solar home systems in six communities in a Pilot Phase, as part of our Renewable Energy Partnership with the United Nations Development Program. These communities, with an average of 200 homes each, are located in Anambra, Delta, Gombe, Kaduna, Niger and Osun States,” he added.
“We want our rural communities to take control of their energy generation and to pay only for the energy they use. Our medium-term vision is to have 100,000 homes installed with solar systems in the next five years, through a combination of micro-grid and stand-alone solar home systems. This is essentially a program aimed at poverty alleviation and rural economic development. Each home will have sufficient solar energy to power three LED light bulbs, one electric fan, one Radio/TV set and, of course, mobile phone charging. These are the basic energy needs of the average rural family. What we are initiating is a commercially sound model for delivering power to Nigerian rural homes at affordable rates, to provide a long-term alternative to the problematic national grid,” Olaoluwa added.