Nigeria to kickstart $10bn Renewable Mini-Grid Market

British born entrepreneur and founder of Virgin Atlantic is optimistic about the renewable energy market in Africa with a particular interest in Nigeria. He is set to lead a set of impact investors into investments in off mini grid solar energy panels and infrastructure to power electricity in homes and businesses across the nation. Even though the prospects of renewable energy like solar mini grids has been mired by risk, access to project financing and interest rate. The Rocky Mountain Institute in collaboration with the Nigeria Rural Electrification Agency & the World Bank announced at a recent conference in Nigeria, announced that they have found a solution to the challenges that is posed to the commercial viability of solar energy as a source of energy for Nigerian homes and businesses.

In a statement that clearly speaks of his vote of confidence on the opportunities that exist for diversifying the power sources of Nigeria and growing the consistency of power supply to homes and businesses whose productivity is mostly crippled by a lack of power and not its ability to pay for it, he said “Developing off-grid alternatives to complement the grid could create a $9.2B/year market opportunity for mini-grids and solar home systems that will save $4.4B/year for Nigerian homes and businesses. And there is large potential for scaling – installing 10,000 mini-grids of 100 kW each can occur for 10 years and only meet 30 per cent of anticipated demand.”

“The combination of large revenue opportunity (USD $9.2 billion per year), a supportive government, and a dynamic entrepreneurial environment unite to make Nigeria the ideal location. If you are an impact investor that wants to make a difference in energy access next year, I’d suggest a trip to Nigeria”

Recently the Minister of Power Babatunde Fashola announced that for the first time in nearly five years, the national power grid is consistently generating above 5k megawatts of electricity, this for a nation of 180m people projected to rise by 140% to 390m by the United Nations Food Population Agency (UNFPA) is 11% of the 48k megawatts of power South Africa generates for a population of 55m people. In the year 2017, the Global Business Report of the World Bank Ease of Doing Business shows that Nigeria out of 191 nations surveyed moved 8 points from 180 to 172nd position in access to electricity.

Kelvin Emmanuel

About Kelvin Emmanuel

The Oil producing Angola in the Southern part of Africa faces what Nigeria faced 12months ago; a distortion in its exchange rate with a difference between the official markets and the parallel black markets. One dollar through the official window buys you 166 kwanza, while one dollar through the black market buys you 400 kwanza. Nigeria faced the same challenge 12months ago, when the distortion between the official and black markets was as much as the official markets trading at 306 with the parallel market ranging from 450 through to 510. The Central Bank Governor of Angola, Jose de Massano Junior announced in Luanda “We will stop having a fixed foreign exchange, we will adopt a floating regime of foreign exchange”. Angola faces exactly the same challenges and has been applying the exact same responses to an exchange rate crisis like using its foreign reserves that was sitting at $26bn to defend the currency kwanza, with no success so far, even though the external reserves has dropped to $14bn. Angola relies on Oil receipts for 80% of its government revenue, 90% of its inflow and 50% of its GDP. Angola is a $194bn economy that has been growing at an average of 10% on the back of rising oil prices since 2002 when its 27 year old civil war that started in 1975 ended. The state national oil company Sonangol reports that it produces up to 1.8m barrels of crude oil daily, however the government that until now has being led by the family dynasty Jose Eduardo dos Santos until recently when succession saw power transferred to Joao Lourenco, reports that the oil price rout in 2015/2016 that saw prices drop to as low as $28 per barrel caused ripples across the economic structures of the government, upsetting government revenues, its ability to fund its budget, capital project funding, foreign direct investments into the economy as a result of a currency crisis that was driven by the widening of gap between the official and street window of the kwanza, that until now has been pegged in a fixed exchange rate regime to the US Dollar.