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Why FG gave N2bn grants to provide 43,000 homes with solar power – Ohiare

Dr Sanusi Ohiare is the Executive Director, Rural Electrification Fund (REF) at the Rural Electrification Agency (REA). In this interview, he speaks on the N1.952 billion grant the federal government has given to 26 private developers to assist them in energising several communities nationwide to connect over 43,000 households.

 

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What was the vision for the REF and how has the agency driven it?

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In 2005, when the Electric Power Sector Reform Act (EPSRA) 2005 which is basically the driver or the bedrock of the reforms of the current power sector was acted, it envisaged Rural Electrification Fund (REF) under the Rural Electrification Agency (REA) that will start grants to support private developers as opposed to what we use to do which is just contracts.

Since 2007, when the agency took off, this Fund was meant to be activated but for some reason, the previous management was not able to do it until President Muhammadu Buhari came and appointed this management headed by Mrs Damilola Ogunbiyi as Managing Director.

 What has this management done differently?

The directive for us was to quickly operationalize the Fund. We had some money, I think about N2 billion in the fund which has been there since 2007 and was never used. They did not get the right framework in place to deploy and use the Fund. There are strict criteria before you can use the Fund.

When we came in 2017, we quickly got all the framework and operational guidelines in place and approved. We advertised and got people putting in bids; we evaluated them and got board approvals and we had to review the bids again just to be sure.

We now have 12 local companies providing mini grids projects across the country and we have 14 Solar Home System (SHS) suppliers to deploy about 19,130 SHS across the country.

We had N2 billion in the Fund but the total amount we able to spend in this first call is about N1.952bn.

 What will be the impact of these projects?

We are providing electricity to about 43,000 households. From our analysis, the number of households that will get electricity in rural communities, and this is subject to the funding that we have. Imagine if we have more money, because we have about 90 million people that do not have electricity. If we have more money in terms of households, the number would have been able to cover that. The Solar Home System will cover about 19,130; that is almost 20,000 households.

 What are the other programmes you have?

We have the World Bank project coming up which is about $350 million, but everything is aimed towards scaling up mini grid deployment across rural communities.

We have Energising Education which has 37 universities and seven teaching hospitals. We have the markets projects which is Energising Economies. From the REF part, we are just staring with this N2bn, we have other things in the works which is not directly government funding but are innovative ways we are looking at in providing electricity.

 Are there conditions for REA to revoke these grants, if the developers don’t perform?

It is a result based project which means we are not giving them the money at once. For the mini grid, we have an agreement that they will meet the Conditions Precedent which includes that the need to show evidence that they have verifiable equity, the equipment installed or evidence to show they got a loan from the bank to deploy because we are giving them a certain percentage of the money, so they need to prove that.

 Does the agency manage this fund on its own?

We have a trust fund manager to ensure that it is independent and transparently selected. It is like the third eye to ensure all the things go well in terms of monitoring and the delivery timelines.

 How soon should Nigerians expect these projects?

Right now, one of the developers said he is already on site and that by first week of February 2019, he wants the agency to come and commission. Those are the kind for developers that we want work with. People who have the capacity to quickly deploy, and it is a local company.

If you do well, it will give us the reason to consider you for more grants. We hope he is able to meet up. Other firms are giving us a timeline of one to three months with six months maximum.

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