Scaling up mini-grids: How Nigeria learned from Ghana
In August 2018, a team of Nigerian mini-grids experts travelled to Ghana for an exchange to better understand how Ghana is scaling up its low carbon mini-grids program. We caught up with Victor Osu, of Nigeria’s Rural Electrification Authority, to find out more.
What did you hope to get from the exchange?
When we started this project, there were three key questions we wanted to answer about the mini-grids power system in Ghana:
- How are the enabling policies regulated?
- What is the implementation methodology used?
- How can this implementation be sustained?
What were some of the key lessons that you learnt?
It was really fantastic to see that the program was more of a public-public partnership, because when you look at the global space of green electrification – particularly mini-grid deployment – the narrative you hear from everywhere, including from Nigeria, is around public-private partnerships. It’s remarkable to see how the Ghanaian government has been able to achieve so much through just the public sector. It’s often difficult to get lots of public sector stakeholders to sit down together and fashion something that’s sustainable, especially when it comes to utilities. We found that Ghana has a brilliant model of bringing different public sector groups together, and this is something we want to take back and explore in Nigeria.
In Ghana, the Ministry of Energy takes the full responsibility to drive off-grid deployment and leverages its coordination mandate by firming up partnerships with other public offices and utilities such as Ghana’s Energy Commission and the Volta River Authority (VRA). We noted that the VRA, a public utility, plays a well-structured operational and maintenance function following the Ministry of Energy’s original mini-grids deployment.
Another highlight was in learning about access to finance. We all know that access to finance for mini-grids is a problem, and what we usually try to do to seek finance is to go to developed countries or international development institutions – but Ghana does it differently. Ghana has been able to generate funds internally through an Electricity Levy, which allows them to co-finance many of their mini-grids projects. Raising funds internally also gives Ghana more weight with the international finance institutions, who are generally happy to provide co-finance as they’ve seen what Ghana can do. This is something that we’re starting to look into in Nigeria – at the moment we’re crafting a proposal to the government agency in charge of regulation to develop a public-public partnership for off-grid development.
The third highlight was the Volta River Authority, or VRA. In Nigeria we’re trying to build a strong relationship with our distribution companies, which supply energy to conventional electricity grids but are not currently involved with mini-grids. In Ghana, we’re seeing the government build mini-grids and hand them over to private sector distribution companies to manage, operate and maintain. One example of this is the VRA. It’s really fascinating to see this common interest towards realising Ghana’s mini-grids initiatives with a view to scaling up renewable energy. We need to go back to Nigeria and ask ourselves: how do we bring the value chain of the conventional energy market into the off-grid market? We need to start looking at what Ghana is doing because that’s the only way we can make our energy system sustainable.
How do renewables fit in the future electricity generation mix in Nigeria?
I think what the government is trying to do right now is fantastic. It recognizes that it might not be able to achieve so much energy access with conventional grid extension or electricity generation, and it’s starting to think about decentralization – that’s why the off-grid market in Nigeria is really booming right now. Recently we got $350 million from the World Bank for off-grid energy investments and as I speak we’ve just finalised plans for 12 mini-grids and 20,000 solar home systems that will be deployed across Nigeria.
In addition to this, our government and several international parties are also investing heavily in the renewable sector, which sets the tone for what the government is looking for in the mid and long-term. So, in the future we’ll see a mix of conventional and non-conventional electricity systems – especially for rural communities where we expect that grid extension might not reach for the next 10 years.
What have you found most useful about the Mini-Grids Community of Practice so far?
I probably wouldn’t be talking to you if it weren’t for the Community of Practice! The Mini-Grids Community of Practice put together our peer-to-peer study with Ghana and without that, we probably wouldn’t have been able to understand the whole framework that Ghana has put in place for developing mini-grids. Being there in person was so important. That said, even outside of normal 9-5 meetings, we’ve started our own internal communications channels where we call to discuss our mini-grids problems and check that everyone is on track with their strategies – often on weekends and Sundays.
We have a forum right now on WhatsApp where people are so interested in talking about what they’re doing, what they want to do, their situations, and how they’re moving forward with off-grid development. More countries are joining the Community of Practice and this interest tells us that the whole possibility of pushing mini-grids development in Africa is coming to light – I am happy to be a part of it.
What’s the value of peer-to-peer exchanges like yours between Nigeria and Ghana?
The values are awesome! Things can really work if you put the right policies in place. For example, we always think that public-public partnerships are very difficult to deal with, but we’ve found a lot of value in understanding how Ghana has been able to put these structures in place.
You may feel that you’re doing something fantastic in your country, but when you share what you’re doing you often find that a similar program has been rolled out in another country and didn’t work out. What you gain in these exchanges is the fantastic experience from the network.
I think that more peer-to-peer studies should now start evolving because it’s so helpful to find out what other people are working on. We’ll be catching up again in Nigeria in November for another Community of Practice meeting and I’m looking forward to that.