Rocky Mountain Institute (RMI), Ibadan Electricity Distribution Company (IBEDC) and Nayo Tech, with support from the Nigerian Rural Electrification Agency (REA), joined forces to accelerate the commercial deployment of undergrid minigrid technology in the Nigerian energy sector. The Mokoloki project demonstrates a financially viable business model that could provide electricity access to millions living in underserved rural communities throughout the country.
According to Anayo Okenwa Nas, chief executive officer of Nayo Tech:
“Part of the work we do at REA is creating an enabling environment for private sector-led projects to thrive. We are delighted to witness strategic collaborations geared toward accelerating energy access in unserved and underserved communities across Nigeria. What makes this project unique, beyond being Nigeria’s first commercial undergrid minigrid in a rural community, is the social and economic transformation that the project ultimately brings to the Mokoloki community. I commend RMI, IBEDC, Nayo Tech and all other stakeholders involved in carrying out this feat,” said Ahmad Salihijo, MD/CEO of the REA.
“By the time this project [stabilizes], Mokoloki will be like a town. They will have more regular power supply than cities,” said Engr. John Ayodele, IBEDC chief operating officer. IBEDC was the first Nigerian distribution company to initiate a tripartite contract negotiation with a rural community as required for interconnected minigrids by regulation. “We are happy with the Mini Grid Regulation.
“We are excited to be in the forefront of undergrid minigrid development in Africa as a scalable and sustainable business opportunity with good social impact on our host communities.”
Mokoloki, a rural community in Ogun State, previously struggled with intermittent electricity access and poor voltage quality prior to this project. However, its bustling market and proximity to main trade routes promised major commercial activity, making it an ideal site for an undergrid minigrid, as explained in the newly released project brief and article.
This undergrid minigrid pilot embodies recommendations from recent reports by RMI and partners at EMRC, Cleantech Hub, and All On. Under the Grid outlines the business opportunities for undergrid minigrid development in sub-Saharan Africa, while Electrifying the Underserved expands on specific business models to guide project implementation. An estimated 40 million rural residents are underserved by the main grid in Nigeria. Of these, close to 35 percent could be served by over 4,000 commercially viable undergrid minigrid systems. Nationwide, the revenue opportunity from these minigrids is approximately N400 billion ($1 billion) per year.
“Mokoloki’s undergrid minigrid shows how utilities, developers, and communities can collaboratively develop innovative power solutions, and this willingness to test new approaches has unlocked a new option for increasing energy access,” added James Sherwood, principal at RMI.
Using a modular design approach, the solar-hybrid minigrid is initially providing 100 kW of generation for an estimated peak load of 88 kW, with an expansion plan in place for anticipated load growth. After three months of operation, it is serving 230 households and over 60 commercial and public enterprises, including the local health center. RMI hopes the success of this undergrid minigrid, as a replicable solution, will jump-start similar partnerships that serve customers across Nigeria and sub-Saharan Africa. Both IBEDC and Nayo Tech intend to scale up their undergrid portfolios and are actively exploring project and investment opportunities.
RMI
Rocky Mountain Institute (RMI)—an independent nonprofit founded in 1982—transforms global energy use to create a clean, prosperous, and secure low-carbon future. It engages businesses, communities, institutions, and entrepreneurs to accelerate the adoption of market-based solutions that cost-effectively shift from fossil fuels to efficiency and renewables. RMI has offices in Basalt and Boulder, Colorado; New York City; the San Francisco Bay Area; Washington, D.C.; and Beijing.
IBEDC
It formally came into existence on 1st November 2013 as part of the unbundling of the electricity sector. It covers the largest franchise area in Nigeria, made up of Oyo, Ogun, Osun, Kwara and parts of Niger, Ekiti and Kogi states.
Nayo Tropical Technology
The company has been a best-in-class Nigerian renewable energy company in the solar sector since 2004. Currently, the company’s three core business lines are solar mini-grid utilities, EPC contracting, and RE warehouse/sourcing. The company distinguishes itself with its deep technical proficiency and track record. To date, it has successfully executed on over 6 MW cumulative of EPC solar installations in West Africa and owns and operate 4 rural mini-grids with delivering clean and reliable power to 2400 homes and business in Nigeria