REF took 16 years coming; Nigerians are not particularly keen on government’s promises

For as long as Halidu Ahmad could remember, his village had been waiting for the government to provide access electricity to power their economic activities.

The first time he read about a project that could potentially electrify his village in Ucu, Magama Local Government of Niger State, was during the Obasanjo/Atiku administration and he was 16 at the time. Tired of waiting, Ahmad headed to Abuja, eking out a living from sales of sandals he manufactures in Kubwa, about an hour away from the Federal Capital’s business district.

“I haven’t been home in the last five years, so I can’t really say if there is light in my village or not. I have not even thought to ask whenever I called home. Like many people, I have forgotten about that. My focus these days is to better my life and that of my family. Any Nigerian that is waiting on the government to provide electricity or good road or even water for them is wasting their time. As you know, every Nigerian is their own government,” Ahmad told this reporter on Wednesday night, a day after the federal government announced a $350 million investment in national electrification projects. There are unconfirmed reports that the World Bank is mulling an additional $1 billion facility to support Nigeria’s drive towards increased electricity provision by 2020.

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Nigeria’s Federal Government had said it was working towards a 75 percent and a 90 per cent increased access to electricity by 2020 and 2030; as well as at least 10 per cent increase in renewable energy mix by 2025 as contained in the National Electric Power Policy (NEPP) of 2001 and the Electric Power Sector Reform Act 2005 (EPSR Act 2005) respectively. More than 75 per cent of Nigeria’s population currently lacks access to electricity, despite investments government sector investment in the country’s power sector, according to the World Bank data.

The crux of the NEPP was to “expand access to electricity as rapidly can be afforded in a cost-effective manner.” The implication was a “full use of both grid and off-grid approaches, with subsidies being primarily focused on expanding access rather than consumption.” The strategy, going by the policy document, was an establishment of “an independent Rural Electrification Fund (REF) operated by a Rural Electrification Agency” otherwise known as “The Fund” to “develop both grid-connected and off-grid rural electrification; operate with funding from an electricity levy on consumers and/or Federal subventions, supplemented by funding from States, private companies, community contributions, etc; open bids from a wide range of organisations” and “invite bids for funding of connections to supply (grid and off-grid),” among others.

Sixteen years after the REF, the federal government is receiving $150 million in direct loans to fund its rural electrification project, largely through private sector, as announced on Tuesday, December 5, 2017. The new $150 million World Bank facility is expected to help REA build 10,000 mini-grids in a year and providing 3,000MW power generation in Nigeria’s rural areas by 2023, Damilola Ogunbiyi, REA’s Managing Director, said on Tuesday, at the 4th Action Learning Summit on Upscaling Mini-Grids for Low-Cost and Timely Access to Electricity, in Abuja. The investment, she says, is expected to open up a $9.2 billion a year investment opportunities for the private sector in the country, as well improved access to electricity in rural Nigeria, where households spend about N2,000 a month on lanterns and battery-powered lamps.

It will be recalled that Ministry of Power’s Permanent Secretary, Louis Edozien, had announced in March this year that the federal government has allocated N2 billion to the Rural Electrification Fund (REF), while the Minister of Power, Works and Housing, Babatunde Fashola had announced in November 2017 that the Rural Electrification Agency had completed the guidelines to help rural power developers receive N3.5m to N106m in funding to improve rural electricity, from the fund.

The fund, he said, would “provide a partial single payment capital subsidy and or technical assistance to eligible private Rural Power Developers, NGOs or communities to invest in options such as hybrid mini-grids or solar home systems to scale up rural access to electricity,” to serve the “unserved and underserved rural communities.”

REA’s Ogunbiyi had complained on Tuesday that lack of funds have left the agency’s hands tied, in providing access to electricity in rural areas of Nigeria. It is curious that Nigeria is only speaking about making funds accessible to the REF even after its initial proposal in 2001 and set up in 2005, despite the fact that budgetary allocations were meant to have been provided for the fund.
For the first time in almost two decades, the rural electrification projects are likely to start in 2018, although no timeline has yet been established for the commencement of the projects. However, people familiar with the projects in the Ministry of Power as well as REA say that the project is “definitely a go” next year. However, a few Nigerians have expressed some “strong” reservations on the proposed projects, as well as REA’s agenda of 60 per cent rural electrification by 2020, aimed at connecting 5.5 million rural households in the same time period, as currently, only 35 per cent of the rural population has access to electricity, per data from the Central Intelligence Agency (CIA)’s The World Factbook.

REA expects mini-grids to fill a substantial portion of that gap, covering up to 8,000 villages nationwide.

For instance, a woman who simply gave her name as Yinka, who operates large grinding machine in South West Nigeria, said she is not confident that the project “will see the light of the day. This is not the first time they are promising that they are going to give us light. If they give us light, I will be happy because I spent too much money on diesel every day and that is affecting my profit. But to tell you the truth, I don’t think this project they are talking about will happen any time soon.”