Nigeria has signed an agreement of $ 200 million with Welight, a Pan-African company distributed in renewable energies (DRE), to deploy hundreds of renewable mini-networks aimed at providing reliable electricity to millions of people in rural and peri-urban communities.
The agreement represents an important step in the growing embrace of renewable energies by Nigeria, which is increasingly considered as a viable alternative to the supply of gas electricity in difficulty of the country. With the national network of Nigeria generating only around 5,000 MW against an estimated demand of 30,000 MW, energy poverty remains a critical challenge, especially in rural areas where the gate supply is not reliable or completely absent.
According to Reuters, the project, supported by the World Bank and the African Development Bank (AFDB), will focus on the establishment of 400 mini-networks and 50 metrogrides in rural Nigeria, improving access to electricity for around 1.5 to 2 million people.
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For decades, the Nigeria electricity crisis has remained one of the largest obstacles to economic growth. Despite one of the largest economies in Africa, Nigeria has one of the lowest electricity access rates on the continent, with millions that were based on expensive and polluting diesel generators due to frequent breakdowns and the inadequate supply of the national network. The mini-networks fueled by renewable energy sources such as solar and wind energy have been identified as a key solution to the energy difference in Nigeria, in particular in rural areas which are too far from the national network or poorly served due to a low transmission infrastructure.
The agreement with Welight should help to fill this gap, because mini-networks offer localized electricity production which can provide stable and affordable electricity to houses, businesses and essential services such as health care and education. The Nigerian government has actively worked to increase the share of renewable energies in its electricity mix from 22% to 50% in accordance with its national renewable energy and energy efficiency policy (NreeEP). This has led to an evolution towards partnerships in the private sector, the government looking for investments to develop solar, wind and hydroelectric projects to complete its traditional fossil fuel power supply.
Wellight, supported by Axian Group, Sagemcom and Norfund, announced that he had signed a memorandum of understanding with the rural electrification agency (REA) on Monday. Romain de Villeneuve, managing director of Wellight, said in a statement that the agreement represents a jump to the supply of electricity specific to Millions to Nigeria while supporting Wellight’s ambition to become a truly Pan -African business.
The company has already established a presence in Madagascar, Mali and Niger, where it has built solar mini-networks to electrify the off-network communities. Its expansion in Nigeria is considered an important step in its attempt to become a dominant actor in the renewable energy space in Africa.
Beyond improving access to energy, the project should stimulate the economic growth of rural areas, where a reliable lack of electricity has very limited industrial productivity and development. Many small companies in rural areas operate below the capacity due to electricity shortages, while farmers often lose perishable goods due to the lack of storage and cold transformation facilities.
Nigeria’s current electricity production of current electricity production remains largely insufficient, the national network generating barely 5,000 MW, below 30,000 MW estimated necessary to meet national demand. Consequently, many parts of the country undergo daily power outages, while certain rural areas have never had network electricity. The excessive dependence of the country on gas electricity has contributed to this crisis, because the supply of incoherent gas, the vandalism of pipelines and aging infrastructure continues to disrupt the production of electricity.
Renewable energy solutions such as solar mini-grids offer a cheaper, faster and more sustainable means of increasing the supply of electricity, in particular for off-network communities. Unlike power plants based on fossil fuels, which require significant investments in infrastructure and fuel supply, mini-networks can be quickly deployed and operated at lower costs.
