Nigeria’s Decentralized Renewable Energy (DRE) Taskforce, which aims to accelerate modern electricity access initiatives by tackling the most pressing industry challenges, met on September 18 to seek new ways to confront the bottlenecks preventing the industry from scaling to meet the needs of the millions of unelectrified.
The meeting, which was attended by 22 members of the taskforce, assessed its activities to date, reviewed its goals and developed action plans to meet those goals.
The taskforce which was launched in February is part of the Scaling Off-Grid Energy (SOGE) Grand Challenge for Development, which is implemented in Nigeria under a partnership between the US Global Development Lab, Power Africa, USAID-Nigeria, FHI360 and Power for All. The partnership aims to provide 20 million households in Sub-Saharan Africa with access to modern, clean and affordable electricity through distributed solutions.
The taskforce is focused on five core challenges for the sector: zero tariffs and duties; consumer awareness; collaborative data sharing; end-user payments and standardization and certification for the sector.
The taskforce continues to engage with the Ministry of Finance to grant zero import duty status to all solar power equipment and to request a Renewable Energy desk within the ministry in order to fast-track Zero Import Duty Exemption Certificates (IDEC) for solar panels and components.
In order to help developers better understand the tariffs and duties on imported solar panels and components as well as how to clear them, the taskforce is also developing a framework and handbook on Nigeria Customs clearance procedures for imported solar panels and components.
In addition, the taskforce discussed ways to simplify consumer payments using digital finance in order to accelerate the adoption of DRE solutions.
The need for digital finance for the sector is very important, as a huge proportion of the population without energy access is also without access to financial services. This constitutes a huge barrier for DRE companies on how they can collect payments from their customers. The lack of a simple, effective and digital means of payment for consumers significantly increases the cost of business for DRE companies and acts as a disincentive to increasing energy access in rural, unbanked areas.
There are a number of challenges that are preventing the takeoff of digital finance in Nigeria which include: a vague and complex ecosystem, poorly developed agent network, network complexity, a lack of interoperability and poor infrastructure.
The taskforce resolved to engage with the Central Bank of Nigeria through its Financial Inclusion Secretariat which aims to increase access to financial services in order to find areas of collaboration.
Another pressing challenge the taskforce deliberated upon was finding ways to facilitate collaborative data sharing within the sector. While numerous market data exists, they exist in siloes as a result of having been collected by various actors. Furthermore, the market data is limited in scope with their accuracy in doubt.
As a result, market players do not know where to get critical information which increases the development costs of DRE solutions such as mini-grids.
The taskforce agreed that there is need to invest in building credible data for the off-grid sector as well as support for ground survey and data collection efforts. This is why Power for All’s one-stop web platform which aims to provide data for the sector, Platform for Energy Access Knowledge (PEAK) was launched. Power for All’s PEAK data platform is a new interactive knowledge platform designed to curate, organize and synthesize relevant DRE data into digestible, shareable and usable knowledge to encourage investment flows; to aid planning and projections and to facilitate knowledge sharing and ideation on optimizing opportunities in the sector globally and in specific countries.
There is also a need for the taskforce to raise consumer awareness of the financial, environmental and health benefits of using solar home systems (SHS) over fossil-fuel generators, as well as their awareness of various types of solar products available and payment models offered by DRE companies.
The taskforce will continue to critically look at how to drive the adoption of decentralized renewables in Nigeria in order to provide clean, modern energy to the 93 million people in the country that currently live in energy poverty.
Other components of the SOGE project are DRE 101 workshops with state-level policymakers in the six geopolitical zones of the country and the Platform for Energy Access and Knowledge (PEAK), a market intelligence platform for the DRE sector.
For more information, visit the Nigeria information hub on the Power for All website at www.powerforall.org/nigeria
Mark Amaza is the Nigeria Lead on Strategic Communications and Research at Power for All.