The Bank of Industry (BoI), Nigeria’s development financing institution, has called for the empowerment of rural communities through affordable off-grid solar power for home systems operated on Pay-As-You-Go (PAYG) basis.
Rasheed Olaoluwa, Managing Director and Chief Executive Officer of BoI, told This Day Live that rather than wait for the national electricity grid to reach rural communities, there is a golden opportunity for communities to be empowered with affordable off-grid solar power home systems.
The PAYG technology was the ‘magic wand’ employed by the telecommunication industry to drive the rapid growth in GSM (global system for mobile communication) subscription across Africa over the last decade and half.
According to Olaoluwa, PAYG addresses two problems; firstly, the cash flow constraint for the customer, and secondly, the credit risk management issue for the service provider.
Solar power in USA, East Africa
On the abundance of solar power Olaoluwa stated that sub-Saharan Africa is geographically fortunate given its location between the Tropic of Cancer and the Tropic of Capricorn that has “an above average level of direct solar radiation”.
In the USA, Olaoluwa said a solar power company, SolarCity, has installed over 500,000 solar home systems, adding that every three minutes, a new home is added to SolarCity.
Further to this East Africa was already leading the way, as M-Kopa, a subsidiary of Kenya telecom giant, Safaricom, has installed solar power home systems to over 180,000 rural homes in Kenya, Tanzania and Uganda, stated Olaoluwa.
Nigerian solar power systems
At the presentation of BoI cheques to two off-grid solar home system providers, Olaoluwa explained that: “This [M-Kopa initiative] is exactly what we seek to replicate in Nigeria with our partnership with GVE Projects Limited and Arnergy Solar Limited.”
He continued: “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, organised by the US African Development Foundation (USADF), the USAID and General Electric in 2011.”
GVE Projects implemented a 6KW PV solar power rural mini-grid at Egbeke, Rivers State in 2013 and is currently implementing an 18 KW PV solar mini-grid at the same location.
Arnergy Solar Limited specialises in the provision of clean energy to customers in the Bottom of the Pyramid (BOP). The company has implemented stand-alone PV solar power systems in communities in Lagos and Ogun States.
Pilot Phase in six communities
Olaoluwa explained to This Day Live that: “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 Programme. These communities, with an average of 200 homes each, are located in Anambra, Delta, Gombe, Kaduna, Niger and Osun States.”
The BoI MD urged the privatised generation and distribution companies not to worry about this initiative as there is enough demand for energy in the cities and major towns to keep them “very busy over the next decade”.
“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 5 years, through a combination of micro-grid and stand-alone solar power home systems”, concluded Olaoluwa.