The Lighting Africa – Nigeria program was launched in March 2015 to increase access to better, cleaner and safer off-grid lighting and energy products for the rural and peri-urban populations with no access to the grid. Our key objectives from the outset of the program were to help six million people gain access to clean, modern, affordable lighting products, while avoiding 120,000 metric tons of greenhouse gas emissions.
To achieve these goals, we work in collaboration with manufacturers, distributors, retailers, financial institutions, government agencies, consumers, and other stakeholders to develop markets and tackle the barriers to the adoption of cleaner energy sources among the base-of-the-pyramid (BoP) population.
To create awareness, we have carried out numerous consumer education campaigns in Nigeria using a combination of road shows, market storms, radio advertising and product presentation forums to increase awareness of solar lanterns and solar home systems (SHS). As of December 2018, over 50 million people across 21 states had been exposed to our campaigns.
With increased awareness comes increased demand – yet impediments to access remain. Lighting Africa is working to address issues including distribution and financing bottlenecks.
BoP consumers typically spend more on the lifecycle cost for traditional lighting sources, such as kerosene lamps (due to recurring fuel expenditures), than what they would spend on average for a solar lantern. Yet they often find it difficult to shoulder the initial upfront costs, which hampers their ability to switch to cleaner energy sources. To address this constraint, we are collaborating with 14 microfinance (MFI) banks in Nigeria, offering basic knowledge training on products meeting our standards to MFI employees. They in turn introduce the products to their customers, enabling the MFIs to provide micro-loans to their customers to purchase solar lanterns and SHS. Retailers and distributors also face financing challenges and can benefit from these loans. The MFIs have, as of December 2018, given out about 100,000 loans that combined are worth approximately US$3.4 million.
A robust distribution channel that reaches rural consumers was also lacking. Thus, we have set up a retail channel development program to expand the distribution footprint of solar lanterns and SHS by training retailers in different areas of Nigeria. This effort has brought over 6,000 new retailers into the value chain. We also support these private sector actors by creating business-to-business linkages through events connecting manufacturers with distributors, and distributors with retailers.
To ensure that consumers continue to enjoy the benefits of their investment in solar products, the program has trained over 300 technicians to provide after-sales maintenance.
Expanding across the country
Nigeria is a big country with 36 states. Our market development work has reached 21 of these States, using a combination of consumer education activities, retail channel development, and consumer access to finance.
The Lighting Africa Program in Nigeria, in collaboration with other stakeholders, has laid the foundation for what will arguably become Africa’s largest off-grid solar market in a few years. The market has taken off. But most importantly, the real reward of our work is the transformation seen in the lives of low-income consumers. Their businesses can stay open for longer. Their children can study conveniently at night. And some of them are already looking for the next set of solutions up the energy ladder as they appreciate the savings they have realized by switching to solar. It’s amazing. Allwell Nwankwo, Program Manager, Lighting Africa – Nigeria
In order to build on what has already been achieved in off-grid electrification in Nigeria, we will be supporting two ambitious projects; the Regional Off-Grid Electrification Project (ROGEP), and the Nigeria Electrification Project (NEP).
Nigeria is one of two pilot countries under the Regional Off-Grid Electrification Project (ROGEP), and will serve to identify suitable and sustainable mechanisms to electrify public institutions. ROGEP will aim to increase electricity access to households, businesses, and communities through modern off-grid electrification in the 15 Economic Community of West African States (ECOWAS) countries (Benin, Burkina Faso, Cabo Verde, Côte d’Ivoire, the Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone, and Togo) as well as Cameroon, the Central African Republic (CAR), Chad, and Mauritania.
Lighting Africa will support ROGEP by working with both the national governments and the private sector to make quality-verified off-grid solar lighting and energy products more readily available in West Africa. We will work closely with the ECOWAS Centre for Renewable Energy and Energy Efficiency (ECREEE), ROGEP’s implementing agency, to draw new actors to the market, and support existing players in growing their sales.
The Nigeria Electrification Project (NEP)
Through the Nigeria Electrification Project (NEP) the World Bank is providing a US $350 million loan to the Government of Nigeria, to be used solely to increase access to off-grid electrification. US$75 million of this comprises an investment fund to encourage market growth to enable faster uptake of SHS (6Wp and above).
The Market Scale Up Challenge Fund will offer up-front grants to existing qualified, large-scale providers to accelerate their sales to households and M/SMEs. Grant recipients will be required to meet quarterly milestones including demonstrating they can leverage the grant for mobilizing other sources of financing (debt and equity) to receive tranche based payouts. This evaluation process will serve to protect against non-performance risk, while simultaneously reducing risk to investors. Together this will help mobilize capital for firms with a proven track record to bring clean, safe, modern energy services to more consumers, quickly.
At the same time, an Output Based Fund will focus on enabling strong new entrants and capable Nigerian start-up firms with an ability to successfully service customers, to get a start in this vibrant market. Grants of up to 15-20% of the cost of an eligible installed SHS will be provided, so that firms can invest in the training, advertising, processes, and logistics needed to run their business. The amount of each grant is fixed for each system size/level of service category, and continually reduced over the 5-year span of the program as the market grows.
NEP is also implementing a quality assurance framework for component based systems. These systems are not currently covered by Lighting Global Quality Standards – but we are working closely with the Quality Assurance team to work on this framework with a goal to harmonize them at the global level in due time.
In order enable faster growth and uptake of SHS we are coordinating with other donors to develop complementary financing from investors, financial institutions, and development organizations.
By working towards narrowing the financing gap we can give an important and sustainable leg-up to the off-grid lighting and energy sector in Nigeria – so that each of the 6 million people we set-out to reach can have access to a clean, safe, and affordable energy source.
Page & Impact last updated March 2019