Rockefeller, Bezos turn to Nigeria’s energy sector to alleviate power shortages

Onome Amuge

In a move that signals a major step towards resolving Nigeria’s decades-long struggle with chronic power shortages, a consortium backed by influential entities, such as the Rockefeller Foundation and the Bezos Earth Fund, is set to make significant investments in the country’s energy sector. 

Bloomberg has revealed that a partnership between the Rockefeller Foundation, Bezos Earth Fund, and Ikea Foundation, known as the Global Energy Alliance for People and Planet (GEAPP), is piloting a programme to combat Nigeria’s persistent power shortages by deploying solar mini-grids. 

In December 2021, GEAPP launched the first interconnected mini-grid in Nigeria, an initiative that has already shown promise in supplementing the erratic power supply provided by the national grid. 

These decentralised energy systems harness solar power to generate electricity, ensuring that businesses and households can maintain their operations throughout the day.

“We need hundreds or thousands of these kinds of projects across Nigeria to end energy poverty” said Muhammad Wakil, country delivery lead for New York-based GEAPP, in an interview with Bloomberg at the site of one of the projects in Ogun State.  

Wakil further expressed confidence  over the viability of the business model.

Nigeria’s chronic electricity problems have persisted for years, with no viable solutions in sight, leaving the country’s citizens groping in the dark and grappling with the consequences of a teething, perennial issue. 

Despite numerous attempts to address the persistent challenges in the power sector, the country’s energy challenges have remained largely unresolved, casting a shadow over its economic and social progress. 

According to recent World Bank data, Nigeria’s energy access deficit is one of the most severe in the world, with about 85 million of its 200 million inhabitants lacking access to grid electricity. 

With two more mini-grids already in the works and funding secured for a fourth, the Alliance is poised to expand these projects throughout Nigeria, offering a practical and viable solution to the country’s long-standing energy challenges. 

By scaling up the deployment of mini-grids powered by solar energy, the Alliance hopes to provide millions of people with a reliable and sustainable source of electricity. 

As part of its efforts to accelerate the adoption of renewable energy in Nigeria, GEAPP’s Demand Aggregation for Renewable Technology (DART) programme aggregates the demand for solar equipment from multiple developers, enabling them to negotiate better prices and improve their purchasing power. 

This innovative approach to procurement is designed to lower the cost of solar technology and make it more accessible to communities across Nigeria.

Moreover, DART operates a $25 million financing facility that allows developers to import equipment using dollars and repay the loans in Nigerian naira once their projects start generating revenue.

Business a.m. learnt that GEAPP provides mini-grid developers with grants, loans, and technical assistance, leveraging a new government rule that allows mini-grids to operate alongside the national grid. 

This change in policy, which was introduced in 2021, has enabled GEAPP to expand the reach and impact of its initiatives, ultimately improving access to reliable and sustainable energy for communities across Nigeria.

The success of GEAPP’s initiatives has inspired further investment in the renewable energy sector, with the World Bank pledging $130 million to develop similar facilities.

In a major milestone for the renewable energy sector in Nigeria, a one-megawatt solar mini-grid built by Darway Coast, a Nigerian mini-grid company, is set to provide all-day electricity to a community in Ogun State by the end of the year. 

The project, which is located in the south-western region of the country, will replace the current eight-hour electricity supply provided by Ikeja Electric Plc.