Lagos — A partnership between Ibadan Electricity Distribution Company, IBEDC, the Nigerian Rural Electrification Agency, REA, Nayo Tropical Technology, and Rocky Mountain Institute, RMI has led to the birth of Nigeria’s first rural commercial undergrid minigrid online project.
The project which has been brought to bear at Mokoloki community in Ogun State is to accelerate the commercial deployment of undergrid minigrid technology in the Nigerian energy sector.
According to John Ayodele, chief operating officer of IBEDC; Anayo Okenwa Nas, CEO of Nayo Tech; and RMI principal, James Sherwood who announced the opening, the Mokoloki project demonstrates a financially viable business model that could provide electricity access to millions living in underserved rural communities throughout the country.
“Part of the work we do at REA is creating an enabling environment for private sector-led projects to thrive. We are delighted to witness strategic collaborations geared toward accelerating energy access in unserved and underserved communities across Nigeria. What makes this project unique, beyond being Nigeria’s first commercial undergrid minigrid in a rural community, is the social and economic transformation that the project ultimately brings to the Mokoloki community. I commend RMI, IBEDC, Nayo Tech and all other stakeholders involved in carrying out this feat,” said Ahmad Salihijo, MD/CEO of the REA.
“By the time this project [stabilizes], Mokoloki will be like a town. They will have more regular power supply than cities,” said Engr. John Ayodele, IBEDC chief operating officer. IBEDC was the first Nigerian distribution company to initiate a tripartite contract negotiation with a rural community as required for interconnected minigrids by regulation. “We are happy with the Mini Grid Regulation.”
“We are excited to be in the forefront of undergrid minigrid development in Africa as a scalable and sustainable business opportunity with good social impact on our host communities” said Anayo Okenwa Nas, chief executive officer of Nayo Tech.
Mokoloki, a rural community in Ogun State, previously struggled with intermittent electricity access and poor voltage quality prior to this project. However, its bustling market and proximity to main trade routes promised major commercial activity, making it an ideal site for an undergrid minigrid, as explained in the newly released project brief.
This undergrid minigrid pilot embodies recommendations from recent reports by RMI and partners at EMRC, Cleantech Hub, and All On.
Under the grid outlines, the business opportunities for undergrid minigrid development in sub-Saharan Africa, while electrifying the underserved expands on specific business models to guide project implementation.
An estimated 40 million rural residents are underserved by the main grid in Nigeria.
Of these, close to 35 percent could be served by over 4,000 commercially viable undergrid minigrid systems.
Nationwide, the revenue opportunity from these minigrids is approximately N400 billion ($1 billion) per year.
“Mokoloki’s undergrid minigrid shows how utilities, developers, and communities can collaboratively develop innovative power solutions and this willingness to test new approaches have unlocked a new option for increasing energy access,” added James Sherwood, principal at RMI.
Using a modular design approach, the solar-hybrid minigrid is initially providing 100 kW of generation for an estimated peak load of 88 kW, with an expansion plan in place for anticipated load growth.
After three months of operation, it is serving 230 households and over 60 commercial and public enterprises, including the local health center.
RMI hopes the success of this undergrid minigrid, as a replicable solution, will jump-start similar partnerships that serve customers across Nigeria and sub-Saharan Africa.
Both IBEDC and Nayo Tech intend to scale up their undergrid portfolios and are actively exploring project and investment opportunities.