On Monday, the African Development Bank (AFDB) announced plans to invest $200 million through the Rural Electrification Agency (REA) to boost power supply in Nigeria. This announcement was made by the Bank’s Acting VP for Power, Energy, Climate and Green Growth Complex, Wale Shonibare, during a visit to Nigeria’s Minister of State for Power, Goddy Jedy-Agb in Abuja.
The AfDB board had approved $200 million for Nigeria’s power sector, through REA to support the roll-out of mini-grids and encourage productive use of the grids in various communities. The agreement was signed last week, and the first stage, which has been approved, will focus on improving transmission lines and providing sub-stations.
According to Shonibare, the bank is also involved in the transmission sector of the country as it had a $410 million project to support transmission. “We are also involved in energising education, a programme under which we are dedicating power systems to eight Federal universities,’’ he said.
In response, Jedy-Agba said that the Federal Government was willing to do more in partnership with AfDB to provide electricity for Nigerians. “AfDB had been investing in the sector and they planned to invest more by increasing their funding in the development of the power sector,’’ he said, assuring the bank’s team that any money given to the power sector would be judiciously utilized and accounted for.
Over time, the Nigerian power sector has been characterized by an unstable power supply, with an estimate of 95 million Nigerians living without electricity. This can be attributed to inadequate installed capacity, frequent breakdowns, and high inefficiency levels.
Nigeria currently accesses far below its installed generation capacity of about 7,228MW, with less than 5,000MW generated and transmitted. This led to the privatization of the power sector. However, the challenge of an unstable power supply is still dominant due to government interference, policies and estimated billings of consumers by the private companies.
The Nigerian Electricity Regulatory Commission (NERC), in its Q2 2019 Report, said 57.08 percent of end-user customers were still on estimated billing as of the end of June 2019. According to the commission, out of 8,881,443 registered active electricity customers, only 3,811,729 (42.92 percent) had been metered.
Nonetheless, the government is making an effort to solve the problem of estimated billing, by criminalizing the offense. In 2019, the National Assembly passed a bill to criminalize estimated billing by distribution companies. If this bill is enacted, it will ensure that Nigerians get the right value for their money.
With the addition of new mini-grids by the AfDB, Nigeria will be able to meet its 2020 electricity goal of efficiently delivering sustainable, adequate, qualitative, reliable and affordable power in a deregulated market while optimizing the on-and-off energy mix. It depends largely on the funds available by the AfDB to enhance further growth in the sector.