REA provides electricity to 465,606 households in five years  — ED, Sanusi

…Says Electrification of 90% rural communities in Nigeria achievable by 2030

…We’ve created over 5,000 jobs, impacted 2,683 MSMEs in five years

The Executive Director of Rural Electrification Fund, Rural Electrification Agency (REA), Dr. Sanusi Ohiare in an exclusive interview with OGAGA ARIEMU speaks on the efforts put forward by the Federal Government with private sector partnership to ensure that various communities in the country get electricity by 2030. Ohiare emphasised that through innovative technologies, efficient private sector partnerships, the agency has provided electricity for over 465,606 Households (2,328,030 people) electricity, created over 5000 jobs, impacted 2,683 Micro, Small, Medium Enterprises(MSMEs) in five years. Within the same period, the REA through the Rural Electrification Fund(REF) and other sources have raised $590 million in new funding for various programmes. He added that Youths are making waves in the President Muhammadu Buhari’s government.  Excerpts:

Kindly explain your background and your achievements in the last 5years?

I have a background in Economics, Energy Finance and Rural Energy Development. My experience spans research, policy, regulation and funds management in the power sector, especially in renewable Energy and Rural Electrification. We were appointed into the board and management of the Rural Electrification Agency (REA) almost five years ago, in April 2017 but with effect from 31st March 2017. The Agency had just before then, that is in 2016, been restructured via the Rural Electrification Strategy and Implementation Plan (RESIP) which was approved by President Muhammadu Buhari. The effect of the new structure then, which was poposed by the then Minster of Power Works and Housing, Babatunde Raji Fashola, meant that there are three Executive Directors, who together with the Managing- Director were also part of the Board. I was therefore wearing two hats as an Executive Director of the Rural Electrification Fund (REF), and also a board member Representing North Central, Rural Electrification Agency (REA).

One very peculiar thing with our appointment at the time, which was well received across the country was the fact that for the first time in a long while the President, Muhammad Buhari, entrusted young people with the responsibility of piloting a critical Agency such as the REA, as my Managing- Director then, Mrs Damilola Ogunbiyi, who is now with the United Nations, was quite young and myself as well being the youngest at the time.

The first assignment I was given was to operationalise the Rural Electrification Fund (REF) because as you know REF was created in 2005 by the Electric Power Sector Reform Act (EPSRA) to promote Public Private Partnerships through the provision of Capital grants to incentivize private developers to invest in rural electrification. This task of operationalising the Fund was done within my first six months in my first tenure. It therefore took the country 12 years after setting up the REF to operationalise it that is from 2005 till 2017 when we came on board. Operationalising the Fund entailed piloting various aspects of how the fund would be run, from the operational guidelines, criteria for participating, procurement, approvals, grant thresholds, quality of energy to be supplied, business models, type of agreements to be signed at various levels, environmental and social impact considerations, technical standards and regulations etc. All of these were done within six months of my first tenure and we put out the first REF call for proposal which was successfully executed and delivered 12 Minigrids in various parts of the country and 19,000 Solar Home Systems.

The successful delivery of these projects birthed the beginning of all of the partnerships we now have at the Agency relating to private development of Minigrids and Solar Home Systems (SHS), such as the Nigerian Electrification Project (NEP) funded by the World Bank and African Development Bank; Interconnected Minigrid Acceleration Scheme (IMAS) Funded by European Union and German Government; African Minigrid Project and De-risking Sustainable Off grid Solar Lighting Programme both funded by the United Nations Development Programme (UNDP), Minigrids in FCT Programme funded by the Republic of Korea; Energizing Agriculture programme funded by Rockefeller Foundation through the Rocky Mountain Institute; and a programme on Innovation Hub funded by UNIDO. Those pilots from REF call 1 demonstrated the viability of rural Minigrids and SHS projects especially with partnerships with private developers through blended financing from grants and loans or equity. They also demonstrated that project sustainability could be attained through management agreements with the private developer for upwards of 20 years, with electricity supply provided without interruptions. We are also currently delivering the 2nd REF call of 51 Minigrids, which provides electricity to 17,000 rural households.

Let me add that my immediate task of operationalising the fund five years ago has been achieved. We have also gone on to attract over $600 million from various sources for some of our earlier programmes. Although this is a far cry from what is required to electrify the entire country, which is estimated to be between $2.5 billion to $3.5 billion depending on the yardstick used for estimation, we have not allowed the funding challenge to deter us, as we keep exploring options for funding every day.

Overall, I would say the most important thing that we’ve been able to achieve in the last five years is to bring in the private players and crowd in funding from various sources for projects. Gradually and progressively, we have earned the confidence of private investors and other bilateral and multilateral institutions towards investing in rural electrification. Therefore, the government is no longer funding most of our projects 100 per cent, as counterpart funds are also being provided from private investors.

How can we strengthen the rural electrification fund and make it sustainable?

Every other fund that you know of currently operating within the confines of the country, such as Tertiary Education Fund (TETFund), Ecological fund, the Defunct Petroleum Equalization Fund (PEF) and so forth, operates within clearly defined and sustainable flow of funds, usually a certain percentage coming from a certain pool of revenue to the government or something along those lines as enshrined clearly in their various enabling laws. This is what allows them to sustain their funding and plan appropriately for their programmes. As it stands, our enabling Law (EPSRA 2005) even though it mentions some sources of funding for the REF, the major source which should have been determined by the Act pointedly, was left in the hands of the Nigerian Electricity Regulatory Commission (NERC) to determine. What this does is subject us to the interpretation, mood and caprices of the Regulator to determine our progress and success. If they decide not to determine that rate under whatever guise, we are unable to function effectively. As it stands, section 88 (12a) and 89 (1&2), of the 2005 Electric Power Sector Reform Act, stated that Nigerian Electricity Regulatory Commission (NERC) would determine a certain amount that would come from licensees and eligible customers to the REF which hasn’t been done. It also said we would get the yearly surplus after audited accounts from NERC and fines, which we have gotten a few times, which 2021 being incrementally substantial, and we thank NERC for, but the major source of our monies are yet to be determined by NERC. We are also having problems because of the 2021 Finance Act, which states that all monies generated should go to the consolidated revenue as against our EPSRA 2005 and Constitution of Nigeria which exempts the REF as a special fund created by the National Assembly, that can receive these funds directly from NERC. As a Fund providing critical services to the most vulnerable citizens of Nigeria, we should not be in that kind of dilemma.

Thus, going forward, in order to strengthen the REF, we have made some proposals to the National Assembly which seeks to speak to specific numbers and percentages that should come to the REF and enshrined directly in the Act being currently reviewed before the National Assembly, just like every other Fund in the country.  We are also hoping that we get some express powers enshrined in the revised Act to enable us invest the Fund and grow it appropriately, and ultimately a clarification to settle the clash with the Finance Act 2021.

We cannot continue to rely on external funds perpetually because these funds come once in a while. We also have to strengthen the fund so that we will be able to attract the right staff and keep them. Having a sustainable source of funding will definitely help with planning as well, which are all hinged on the review of the EPSRA 2005.

In specific terms, what exactly are the impediments to the provision of electricity in rural areas?

A few years ago, some of the impediments included, lack of enabling policies; lack of political will, lack of enabling regulations that would allow the private investors enter the sector, lack of data and inadequate funding. Today, funding to a large extent remains the major challenge, followed by data.

However, since the start of President Muhammadu Buhari’s administration in 2015, issues of enabling policies such as Renewable Energy and Energy Efficiency Policy, and Rural Electrification Strategy and Implementation plan, REF Operational guidelines etc. were put in place.  Within the same period, the Mini-grid regulation which provides guidance on investing in generation below 1 Megawatt was also approved, which has opened up the space for private investments to flow. The political will from the highest levels of governance, from the President through our Minister of Power — Engr. Abubakar Aliyu and Minister of State for Power Chief Goddy Jedy Agba, and our young and dynamic Managing Director/CEO of REA, Engr. Ahmad Salihijo, to provide electricity to rural communities as a matter of priority is not in doubt. Also instructive to note is the fact that Mr. President has saddled these enormous responsibilities on the shoulders of young people. At the Executive Management level, we have 3 young people below 40 out of 4 executive Management running the affairs of the Agency, so capacity and expertise at the level of the Agency’s leadership is okay. So, to answer your question again, Funding and Data seems to be the major issues now.

How much fund has REF attracted and also achieved in terms of projects in the last Five Years? 

We’ve attracted around $50.6 million dollars, so far directly into REF. These were from sources such as budgetary provisions, NERC, European Union and German Government, UNDP, UNIDO, Rocky Mountain Institute and Korean Government. It is worthy of note that when we came in 2017, we met about N2 billion, which is around $4 million  as seed funding, which we built on. However, to be clear the REF is also complemented by other sources of funding for the entire Agency which we have also been able to attract. This is not the only thing you put in as our funds. A breakdown of the funds is: 9.3 million euros from EU and German Government, which we are using for a programme called the Interconnected Mini Grid Acceleration Scheme to build 24 solar mini-grids to provide electricity to 26,000 households; $14 million dollars from UNDP and Rockefeller Foundation for energizing agriculture, de-risking solar for solar home systems, and the African Minigrid program; $16 million from NERC and National Budget; $350 million from the World Bank for the Nigerian Electrification Project (NEP), with an additional $200 million  from African Development Bank for the same programme (NEP).

From all of these programmes we have been able to provide electricity from new connections to 465,606 households and counting, which translates to 2,328,030 people; energized 7 universities such as Bayero University Kano, Abubakar Tafawa Balewa University Bauchi, Nnamdi Azikiwe University Awka, University of Agriculture Makurdi, Federal University of Petroleum Resources Delta, Usmanu Danfodiyo University Sokoto, and Federal Univeristy in Ebonyi. The plan is to energize 37 Universities and 7 University Teaching Hospitals in total. We have also provided 3083 jobs and counting and impacted 2,683 Small and Medium Enterprises. Also, under the NEP and Capital projects, we have provided electricity to 200 primary health centres and 100 Isolation and treatment centres. Plans are underway to supply more health centres. By the way, the NEP is also headed by a young lady, Mrs Anita Otubu and 90 per cent of staff running the programme are young people. I keep emphasizing young people because there is this erroneous impression that Nigerian youths are not equal to the task or they do not know what they are doing. Well, the President has trusted youths with this agency, and all of our programs are run by young people and we delivering on our mandate.

For our yearly capital funding, we did a project verification survey across the six geopolitical zones recently of all our projects since inception in 2005, including the ones handed down to us by the Ministry of Power dating back to 1992. Findings show that we have spent approximately 150 billion Naira to complete 2,567 projects in total. However, worthy of note is that under this administration, especially between 2017 and 2021, we completed 1,700 projects (65%) of total with M50 billion. We continue to use our capital projects as a special intervention medium impacting unserved and underserved areas.

In the course of implementing, especially the programmes under the REF and NEP, because it involves giving grants to incentivize the private developers to also source funds, we realized most of them had foreign exchange problems due to the exposure of getting debt in dollars for instance, doing business in Naira and having to pay back in dollars. So, to solve this problem, we approached the government, the Central Bank of Nigeria (CBN) specifically, and after discussions, a N140 billion programme specifically for local developers was approved, called ‘Solar Power Naija.’ This provides a window for local naira denominated loans for our local developers at concessional rates, to assemble solar panels and other related components locally as well as build Solar Minigrids and supply solar home systems to rural communities. So far, 7 billion naira has been disbursed to provide electricity to 100,000 households.

Recently, we also started a program on Innovation, called Research and Innovation Hub, which is a Rural Electrification Fund project. The idea of this is to bring in young people that are innovative who might not meet up to other capital projects requirements.  If you are good enough, we can mentor you, provide you some seed funds and then you can grow into bigger programs, that are currently ongoing. We have about 15 shortlisted researchers in local universities who have been awarded grants to do research along the renewable energy and innovation, towards improving the body of knowledge and data in this area. We also have about six other pilot projects on Innovation across the six geopolitical zones ranging from bio-mass, to solar cold storage, to solar electrical mobility, to irrigation, solar/water purification etc. The plan is to test the efficacy and viability of these technologies to see how we can scale them up.  In a nutshell, these are some of the things that we have been able to achieve over the last five years.

How have these projects impacted the generality of Nigerians? 

I have just reeled out some numbers that translate into millions of people that their lives have been touched and transformed by virtue of REA’s interventions. As earlier stated, we have various programmes through which we impact Nigerians spread across various sources of funding. To summarise, approximately 2.5 million Nigerians have benefitted from new connections under our programmes, over 5000 jobs and MSMEs have been created by our interventions, millions of students in our universities now enjoy uninterrupted power supply through our intervention, several markets and economic clusters have been energized, researchers and innovators have been impacted; over 300 Isolation and Primary health centres with thousands of bed spaces have benefited from our energizing health care programme and so on and so forth. With more funding, we can only continue to deliver on our mandate until no community remains without electricity.

How does REA encourage indigenous companies and local production?

Also, as earlier alluded to, all our projects and programmes except for maybe the ones funded by World Bank gives advantage to local companies and developers. The 140 billion naira Solar Naija Programme by CBN encourages solar assembling plants and related factories, so that we can be buying panels directly from them, that is what they are doing now, and I am happy to report that we already have a few of these assembling plants across Nigeria — in Kaduna, Lagos and Ogun that I know of, and batteries producing factory in Anambra State. The idea is to encourage more of these local companies to spring up. That is what the CBN’s 140 billion loan is meant for. Also we have a few government bodies also encouraging local assemblage of solar panels such as the  Energy Commission of Nigeria who has various research centres across the country and a solar assemblage plant in Sokoto; The National Agency for Science and Engineering Infrastructure (NASENI) is also there, they also have a plant in Karshi Abuja that does solar assemblage. We are exploring opportunities of working together with these government bodies as well. . We are also speaking with some other local financiers such as the Nigeria Sovereign Investment Authority (NSIA) and InfraCredit to guarantee part of that CBN money for local developers.

What is your view of a youth becoming the president of Nigeria?

I believe Nigerians have come of age and they will choose, you know, the best person that would be best able to handle the country and our country and unite us. Of course, I’m a bit biased because, you know, I’m an All Progressives Party (APC) member, so I’m hoping that this person will be from the APC and whoever emerges from the primaries, the presidential primaries of APC. As a party man, we will support.

Of course, we have capable young Nigerians that can lead this country. I am in the forefront, advocating for youth inclusion in politics and governance under the APC Youth Lobby Group, and I’m happy to report that just 2 weeks ago, we were at the Presidential Villa under the leadership of Barrister Ismaeel Ahmed (APC Youth leader) to present some requests on behalf of Nigerian Youths, where the President graciously acceded to all of the requests that we made. So, I believe that if we have more young people in governance, the country will be better for it.

Are you planning to run for any elective political position in the near future?

I just got a second term to continue doing a job that I am passionate about, so it would be unfair to the person that gave me this job and Nigerians to start thinking about that. For now, honestly, I am just focused on this new mandate, you know it is said that with hard work comes more work. So, I’m really focused on completing some of the great programmes we have started with my Managing Director, Engr Ahmad Salihijo and colleagues. We just finished a retreat where we discussed our plans for the year and how we proceed from here in the medium term and I am quite excited with the prospects of what more we can do at the REA. So, elective position is not something I’m considering right now. I’m really focused on doing my job at hand at REA.

What is your last word for Nigerians and Nigeria generally? 

Well, for Nigerians, I will like to speak specifically to the youths, which is my constituency. I encourage them to have faith in this country, not to lose faith, as sadly, a lot of young people are leaving the country. There is a Nigerian dream that we should all envision and experience if only we are patriotic and passionate enough to make the country a better place. This country belongs to all of us. You have to condition your minds and intentions to be tailored towards that, then the country can be there for us all. I am inspired by the young hardworking Nigerians that believe in the possibilities of this country and continue to toil day and night to achieve the inherent potentials of the country.