Keynote Address by Olamide Niyi-Afuye at the powerelec Nigeria Conference
This is the keynote address that was given by Olamide Niyi-Afuye, Chief Executive Officer, Africa Minigrid Developers Association (AMDA) during the POWERELEC Nigeria Conference in Lagos, held at Landmark Center on February 21, 2024.
It is a great pleasure and honour for me to address you today as we gather here to discuss one of the most critical factors in the industrialisation of any nation — energy. This conference provides an important platform for all of us to join the dialogue that will shape the energy landscape in Nigeria.
I congratulate the organizers of the conference for their efforts to provide a unique platform for all stakeholders, both the public and private sectors to come together and discuss the challenges, opportunities, and innovations that lie ahead in the Nigerian power sector.
Ladies and gentlemen,
You will agree with me that energy is the bedrock of any modern economy, of which Nigeria is no exception. Electricity access is crucial to achieving nearly all the Sustainable Development Goals (SDGs), and a lack of access to electricity has an impact on a wide range of development indicators, including health, education, food security, gender equality, livelihoods, and poverty reduction.
As we gather here today, we know that around six hundred million people are still living without access to electricity across Africa. In Nigeria alone, the World Bank estimates that more than 85 million people lacked access to electricity as of 2021. Many Nigerian businesses and households with access to the national grid have faced unreliable and insufficient supply, a gap often filled with power from petrol- and diesel-run generator sets that are costly and highly polluting to people and the environment. Additionally, many rural and peri-urban communities across the country are left with insufficient or no access to electricity at all. In essence, there is “life beyond the grid, but no light beyond the grid”
We need to take urgent action to change that, and this conference could not have come at a better time to discuss the sustainable and innovative energy solutions for the present and the future.
Ladies and Gentlemen,
Renewable energy solutions in collaboration with the private sector hold the key to a sustainable energy future in this country. Over the last few years, decentralised renewable energy solutions, including minigrids, have played a key role in implementing Nigeria’s energy access and sustainable energy goals. They are now widely acknowledged as an integral component of Nigeria’s energy ecosystem, delivering sustainable and reliable electricity access to thousands of households living in areas that, until now, were out of reach of, or unreliably served, by the main grid infrastructure.
On that note, let me acknowledge the presence of minigrid developers in this gathering. Across Africa, minigrid developers are impacting lives within the communities by building electricity infrastructure and providing decentralised or interconnected, reliable, and sustainable electricity to the most underserved. Thank you for working tirelessly to electrify rural communities amid all the challenges you face.
I would be amiss not to recognise, Mr. Ayo Ademilua of A4&T who is in his own right a juggernaut in the renewable energy, Messrs. Olugbenga Ajala and Folusho Alabi of Ashipa Electric, young Nigerians making huge sacrifices to power the lives and livelihoods of everyday Nigerians. Onyinye Anene-Nzelu, who through her vast experience at Sahara Group, Ikeja Electric, EMRC and now as Head of Minigrids at ENGIE Energy Access, is breaking stereotypes about the ability of Nigerian women to thrive and excel in the energy sector. I also note the efforts of Husk Power Systems, who have broken the mold by raising over $100 million in Series D funding, part of which would be utilised to install 500 minigrids in Nigeria by 2028. You are all the unsung heroes of this sector!
As you well know, Nigeria has embraced privatization of its electricity sector since the 2013 unbundling of the Power Holding Company of Nigeria (PHCN). In the same vein, Nigeria has also encouraged strong private sector participation and investment in ensuring the least privileged in society have access to sustainable, reliable, affordable, and modern energy.
Nigeria, already a political and economic leader on the continent, is at the forefront of Africa’s rural electrification agenda. The government has played its part by enacting enabling laws & regulations. The Nigeria Electricity Act 2023, signed into law by His Excellency, President Bola Ahmed Tinubu is a testament to the government’s commitment to transforming the electricity landscape in Nigeria. It’s no surprise that Nigeria is now an attractive destination for capital from development partners to scale the energy sector.
In December 2023, the World Bank approved the $750 million Nigeria Distributed Access through Renewable Energy Scale-up (DARES) Project, which is expected to provide 17.5 million Nigerians with new or improved access to electricity. The DARES project is the largest-ever single distributed energy project by the World Bank globally.
The Project builds on Nigeria’s efforts to expand renewable energy access through the $550 million Nigeria Electrification Project (NEP), which has completed and commissioned 125 minigrids and deployed close to 1.5 million solar home systems, providing access to electricity to more than 7 million Nigerians and creating over 5000 green jobs.
The Rural Electrification Agency of Nigeria (REA), ably led by Ahmad Salihijo Ahmad, the implementing agency for Nigeria’s rural electrification programmes has been a strong partner to private sector minigrid developers on this journey. I must also recognise the efforts of the NEP’s Project Management Unit, led by Abba Aliyu who is sat here today.
Ladies and Gentlemen,
I stand here not just as the first African CEO of the Africa Minigrid Developers Association (AMDA), but as a proud Nigerian. I am privileged enough to participate at multiple fora across the African continent, with multiple public and private sector stakeholders, and I say with so much pride, that Nigeria has taken its rightful place as a leader in rural electrification and energy access in Africa. It is clear that the Nigerian power industry is largely driven by favourable government policies and strong incentives for privatization, which is a catalyst for attracting more investment for the development of infrastructure.
However, we must not rest on our laurels, and continue to improve in order to remain a good example on this continent. As they say, the reward for hard work is more work.
Electrification is about building infrastructure. Minigrids are infrastructure, and should be financed as such, with catalytic finance through grants, patient investments through a mix of equity and debt capital, climate financing, carbon credits, to name a few. Having worked in Financial Markets, and then Hydropower prior to my role at AMDA, I have seen how access to deep pools of capital unlocks infrastructure, and how infrastructure unlocks sustainable growth and development in any country.
At this juncture, let me leave you all with a few foods for thought and action. To eradicate energy poverty for the more than 85 million Nigerians, we need to focus on the following important areas:
- Coordination and collaboration between donors, investors, government, and the private sector – We all know that coordination and collaboration are important. But it is high time that we build it into our systems and processes so that it becomes second nature, rather than a “nice-to-have”. For example, we need to set up open, honest dialogues among all stakeholder groups during program design, again before any funds are committed, and again during the implementation of any programs. Specifically, we need to listen to what the private sector, the companies on the frontlines of rural electrification, need – and not set up programs based on what we think is best for them. Associations like AMDA were established to help facilitate this dialogue and are ready and willing to support.
- Partnerships between on-grid and off-grid operators – We need to make sure that the two sub-sectors of the power sector work in close collaboration. The good news is that we are already seeing close partnerships between grid and off-grid operators, as technology advances. Through interconnected minigrids, utilities are becoming more willing to bring in distributed renewable energy partners to power communities that have no access to electricity or are in weak grid zones. In 2023 for instance, AMDA member company PowerGen completed the official commissioning of its interconnected minigrid project in Toto, Nasarawa State, here in Nigeria. The Toto project is an example of the integrated energy future in Africa, where off-grid and on-grid work together to supply stable and affordable electricity.
- Commitment to equitable, affordable electricity – Electricity powers economies. However, it is only useful when customers are able to afford to light their homes, power appliances, and expand their businesses. Let us always remember that minigrid developers are pushing as hard as they possibly can to reach scale, at which commercial sustainability is within reach. Scale is required for all distribution companies, large or small. For all those who aspire to universal electricity access in Nigeria, our job is to help developers reach scale as quickly as possible. Historically, two critical contributing factors have been a combination of concessional financing and enabling business environments.
AMDA stands ready to work with anyone and everyone who is ready to take on this job.
Ladies and Gentlemen,
As the consolidated voice of the private sector minigrid developers and operators, the Africa Minigrid Developers Association (AMDA) is committed to working with all stakeholders to create an enabling market environment that spurs the growth of the minigrid sector in Nigeria through:
● Supporting minigrid developers to become sustainable businesses with strong corporate governance.
● Enhancing the capital raising capabilities of minigrid developers and facilitating dialogue with funders and investors to attract deeper pools of capital in the sector.
● Engaging with policy makers and government stakeholders through effective communications, dialogue, and advocacy campaigns, and,
● Serving as the reference point and source of reliable data & information on the private sector minigrids in Africa to support evidence-based decision making.
Thank you all for making the time to be here to join the dialogue that shapes the pathway to universal electrification through sustainable and innovative energy solutions.