The World Bank expects a boom in Nigeria’s minigrid sector as the multilateral development bank and Nigerian government introduce an auction as part of a five-year, $550 million minigrid tender.
The tender is part of a minigrid and solar home electrification program that has been running since June.
Speaking at an industry conference held in London in October, the World Bank’s Jon Exel told attendees he believes the program will prove to be a game-changer in Nigeria, where the government has gotten behind renewable and low-carbon energy projects to help achieve universal electrification.
And for good reason: Nigeria ranked second worldwide when it came to the national electrification deficit in a 2018 World Bank study, with 80 million households lacking electricity access. Only India had more.
Joining with the World Bank to implement the program, Nigeria’s Rural Electrification Agency (REA) initially chose 2,000 minigrid project development sites. REA and the World bank then reduced that to 250 based on number of residents, economic activity and nearby infrastructure, according to the project partners.
Funding will only be awarded to minigrid developers who can carry out multiple projects. They are eligible to receive $350 for each user connected to the minigrid networks they deploy. The World Bank and Nigerian government anticipate this figure will decline over time as installations ramp up and cost savings are realized.
REA received 64 expressions of interest in response to its competitive tender project development solicitation, then invited 16 investors to submit expressions of interest in developing minigrids at the 250 sites. Winning bidders are to be announced later this year based on lowest cost per connection. Each winning developer will have access to a database that includes information about each of the 250 sites so as to help them develop site-specific business models, REA and World Bank explained.
Minigrids already underway
Metka West Africa, a subsidiary of Greece’s Mytilineos clean energy engineering, procurement and construction contractor, did not participate in the tender, but is was the first international company to be awarded a contract to deploy hybrid solar-storage and diesel back-up mingrids at four Nigerian universities under Nigeria’s Energizing Education program. According to Mytilenos’s Antigone Fakou these are:
- A 3.5 MWp PV Park with 3 MW of solar power and 1-MW of battery energy storage capacity at Bayero University in Kano State
- A 0.6 MWp PV Park with 0.5 MW of solar and 1.5 MWh of battery storage at the Federal University of Petroleum Resources in Delta State
- A 2.5 MWp PV Park with 2 MW of solar and 3.4 MWh of battery storage at Nnamdi Azikiwe’s Awka Campus in Anambra State, and
- A 2.4 MWp PV Park with 2 MW of distributed solar and 3.4 MWh of battery energy storage capacity at Usmanu Danfodiyo in Sokoto state
Canadian Solar is supplying the PV panels for the four projects. Battery systems are being supplied by Sunlight and JMG is supplying the diesel generators, Fakou said.
Overcoming logistics challenges
Building the minigrids, two in Nigeria’s north and two in the south, pose significant logistics, as well as other challenges. Long distances from main ports, conditions of access roads, other inland transportation issues figure prominently among them, Fakou said.
“Every project is unique and has its own surprises during the execution phase. This one was no different,”vFakou said. “The important thing is to have an experienced and committed project execution team that is able to handle all these issues, so the final outcome is positive.”
REA also announced the results of another zero/low-carbon minigrid development program, the Minigrid Acceleration Scheme (MAS ). A nationwide initiative that’s conducted via open, competitive tender and accepts proposals from any site,. REA will support winning bidders will in-kind capital grants in the form of electricity distribution and metering equipment.
REA awarded MAS grants to Nayo Tropical Technology, Havenhill Synergy Ltd, GVE Projects Ltd and ACOB Lighting Technology Ltd. The competitive tender called for proposals to develop off-grid minigrids with as much as 1 MW of power capacity. The REA did not disclose how many minigrids the winning bidders will develop.
Once completed, the MAS minigrids will be operated on a commercial, public-private partnership basis. By year’s end, some of Nigeria’s remote remote communities will have access to reliable, affordable, green electricity that would have otherwise been unaffordable, according to REA.
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