In a report made available to Vanguard, by the Africa Corporate Data on its Nigeria off-grid solar overview for third quarter, 2016, the firm had received $15 million in the past twelve months from the US Overseas Private Investment Corporation and a $218,000 grant from the Department for International Developments (DFID’s) Solar Nigeria Programme.
According to the report, “high capital costs for solar equipment and installation have traditionally limited the sustainability of off-grid systems in many parts of Africa, but increasingly, providers are targeting Pay As You Go (PAYG) schemes to help reduce the hurdles for lower-income clients.
“The off-grid equipment from Nova-Lumos will be leased rather than sold, for example, the usage of a PAYG scheme is similar to a prepaid mobile subscription.
“The company is collaborating with mobile provider MTN Nigeria, which will allow consumers to pay using mobile wallets.”
The report said: “Nigeria’s government has targeted a 20 percent contribution from renewables by 2030, of which more than 5300 megawatts (mw) should come from solar alone.”
These facilities according to the report include Pan Africa Solar 75mw plant, located in Katsina State, Nigerian Solar Capital Partners 100mw plant in Bauchi State, Nova Scotia plant 100mw Located in Katsina, and Anjeed Innova Group in Kaduna State 100mw plant.
The report also maintained that much of the increased capacity will be coming from off-grid projects.
“The PAYG schemes for off-grid equipment are crucial for the provider cash flow, given that the bulk of potential clients in Nigeria, according to Bloomberg New Energy Finance, live on less than $2 a day.
“While off-grid PV electricity is far cheaper than diesel generators – at N35 to N53/kilowatt hour (kWh) versus N40 to N70/kwh usage is likely to remain modest, with Bloomberg estimating that the maximum average spend on lighting for off-grid Nigerians would be $144 annually,” the report stated.
In July 2016, Nigeria’s Bank of Industry distributed N75.8 million to partner Schneider Electric, ARNERGY and GVE Projects Limited for the pilot of off-grid solar systems in Anambra, Delta, Niger, Osun, Kadura, and Gombe state. A handful of communities in each state has been selected for the projects, which will consist of 2km long 230VAC mini-grid networks that connect roughly 200 households in each area.
Also, in June 2016, ARNERGY announced that it would focus solely on the PAYG model including for its six-state collaboration with GVE and Schneider Electric while British firm, BBOXX, has also announced its intention to establish a franchise in Nigeria before the end of the year.