RURAL ELECTRIFICATION STRATEGY AND IMPLEMENTATION …
Transcript of RURAL ELECTRIFICATION STRATEGY AND IMPLEMENTATION …
RURAL ELECTRIFICATION STRATEGY AND IMPLEMENTATION PLAN (RESIP)
INTRODUCTION TO THE RESIP
November 2017
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CONTENTS
Background and starting point1
Rural electrification goals and strategy2
Institutional framework for delivery4
Rural Electrification Fund3
Our pathway forward5
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ACHIEVING THE RURAL ELECTRIFICATION AGENCY (REA)
MANDATE IS CRITICAL TO OVERCOMING CURRENT CHALLENGES
A core part of the REA mission/mandate……is to tackle electrification challenges in Nigeria…
▪ Mission : To provide access to reliable
electric power supply for rural dwellers
irrespective of where they live and what
they do, in a way that would allow for
reasonable return on investment through
appropriate tariff that is economically
responsive and supportive of the average
rural customer.
▪ Mandate:
– I. Promote Rural Electrification in the
Country
– II. Co-ordinate the Rural Electrification
Programmes in the country
– III. Administer the Rural Electrification
Fund (REF) to promote, support and
provide rural electrification through
Public and Private Sector Participation
Achieving REA mandate has far reaching implications for the welfare of Nigeria’s citizens
▪ It is estimated that only 36% of the
rural population have access to electricity and 95 million Nigerians do
not have access to electricity.
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4
Population without access to electricityMillions
244
95
73
41
36
36
Nigeria
Ethiopia
Kenya
Tanzania
Indonesia
India
▪ Of this amount
in Nigeria, 64%
live in rural
areas
▪ Even those
with access
have limited
availability of
energy
Source: IEA Electricity Access Database 2016 publication (2014 Data)
1 NEARLY 100 MILLION PEOPLE WITHOUT ACCESS TO ELECTRICITY
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Bayelsa
Rivers
Imo Abia
Akwa Ibom
Kaduna
Abuja
Enugu
Anambra
Delta
Edo
Kogi
Oyo
Ogun
OsunEkiti
Ondo
Lagos
Kwara
Niger
Sokoto
Kebbi
Zamfara
Katsina
Adamawa
BauchiGombe
Nassarawa
Plateau
Taraba
Benue
Cross River
Ebonyi
Kano
YobeJigawa
Borno
≤40
40-60
60-80
>80
% of household
with Electricity
(2010)
Source: Nigerian Energy support programme – preliminary modelling of off-grid PV capacities for Nigeria
1 AVERAGE ELECTRIFICATION RATE ACROSS THE COUNTRY
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CONTENTS
Background and starting point1
Rural electrification goals and strategy2
Institutional framework for delivery4
Rural Electrification Fund3
Our pathway forward5
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The goal of the Federal
Government of Nigeria is to
increase access to electricity to
75% and 90% by 2020 and 2030
respectively and at least 10% of
renewable energy mix by 2025.
Rural Electrification Policy (2005) &
National Electric Power Policy (2001)
2 RURAL ELECTRIFICATION GOAL
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Shift to a
combination of
centralized and
decentralized
approach
▪ Centrally
coordinated
▪ Demand-driven
▪ Market-oriented
▪ Continuing to push Discos to meet their
grid extension obligations
Mini grids
▪ Encourage the development of mini-grids
by communities and private enterprises
▪ Grids below 100 KW do not require
permit, between 100 kW to 1 MW a
permit is required
Grid
extension
Stand-
alone
systems
▪ Promote the development and roll-out of
stand-alone systems
▪ These systems to help provide critical
services for hardest-to-reach customers
2 THE NEW PARADIGM FOR RURAL ELECTRIFICATION
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Ensuring right
policies in
place
▪ Rural electrification policy
▪ Tariff policy
▪ Regulatory policy
Making
technology
affordable
▪ Promotion of low-cost operators
▪ Promoting efforts to reduce equipment costs
▪ Capital subsidies
▪ Energy efficiency in RE
Building
capacity for
Nigerian
execution
▪ Participation of non-traditional operators
▪ Capacity and awareness building
▪ Capacity
building in rural electrification
Driving
economic
development
▪ Promoting RE as a catalyst for rural development
▪ Regional equity
▪ Local content and
participation in RE
Managing
challenges
that arise
▪ Dealing with legacy rural electrification projects
▪ Constituency projects
▪ Dealing with network
expansion and ownership
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2 POLICY INSTRUMENTS STRUCTURED AROUND FIVE THEMES
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REA’s five policy themes
Ensuring right
policies in place
Making
technology
affordable
Building capacity
for Nigerian
execution
Driving economic
development
Managing
challenges that
arise
Rural
electrification
policy
Tariff policy
Regulatory policy
▪ Achieve 60% rural electrification by 2020
▪ Connect 1.1 million rural households yearly
from 2015 through to 2020
▪ Tariffs for rural electricity service will be cost
reflective
▪ Establish rural tariff model that allows for
higher margins than urban tariffs thus
making RE projects attractive
▪ NERC will allow RE tariffs outside of its
approved rural tariff model as long as 60%
of customers agree to the tariff
▪ NERC has overall regulatory powers over
rural electrification in Nigeria
▪ RE schemes with generating capacity at a
single site of 1MW or less, or distribution
capacity of 100KW or less are exempt from
license
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REA policy objectives
2 REA’S POLICY OBJECTIVES (1/5)
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REA’s five policy themes
Ensuring right
policies in place
Making technology
affordable
Building capacity for
Nigerian execution
Driving economic
development
Managing
challenges that
arise
Promotion of low-
cost operators
Promoting efforts to
reduce equipment
costs
Capital subsidies
▪ Demand the use of low-cost and high quality
options in RE projects that apply for grants
▪ Low-cost technology include implementing
renewable technologies, shielded wire
technologies and the use of single phase lines
▪ Reduce cost by stimulating demand of
equipment through raising awareness of their
benefits and availability
▪ Reduce cost by increasing supply through
supporting new entrants and continued
support of local production of required
equipment
▪ Provide grants towards the initial start-up costs
of qualified RE projects
REA policy objectives
Energy efficiency in
RE
▪ Promote the use of energy efficient appliances
and devices in RE
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5
REA’S POLICY OBJECTIVES (2/5)
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REA’s five policy themes
Ensuring right
policies in place
Making
technology
affordable
Building capacity
for Nigerian
execution
Driving economic
development
Managing
challenges that
arise
Participation of
non-traditional
operators
Capacity and
awareness
building
▪ Modify power market rules to permit a
range of industry and ownership structures
to accommodate public, private and co-
operative entities with the RE space
▪ Raise awareness of opportunities in RE
▪ Offer capacity building for potential RE
partners e.g., private sector to improve
their understanding of and qualification for
developing and running RE projects
REA policy objectives
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5
REA’S POLICY OBJECTIVES (3/5)
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REA’s five policy themes
Ensuring right
policies in place
Making
technology
affordable
Building capacity
for Nigerian
execution
Driving economic
development
Managing
challenges that
arise
Promoting RE as a
catalyst for rural
development
Regional equity
Local content and
participation in RE
▪ Use RE projects to boost economic
development by allowing host communities
to utilize time and effort spent on
generating alternative energy on more
beneficial economic activities
▪ Promote equity in ensuring RE efforts are
evenly distributed across Nigeria’s regions
and population groups
▪ RE projects that will serve populations within
most infrastructure-poor areas are
prioritized to achieve scale and equitable
access to service delivery
▪ Encourage the use of local content and
local participation in RE projects (including
community ownership of stocks)
▪ Empower local industries to play larger role
in the supply chain from materials,
manufacture, construction and operation
of the assets
REA policy objectives
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5
REA’S POLICY OBJECTIVES (4/5)
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REA’s five policy themes
Ensuring right
policies in place
Making
technology
affordable
Building capacity
for Nigerian
execution
Driving economic
development
Managing
challenges that
arise
Dealing with
legacy rural
electrification
projects
Constituency
projects
Dealing with
network expansion
and ownership
▪ Engage relevant stakeholders e.g., FGN
MDAs and local governments through
workshops and consultations to renew
interests in legacy viable projects and
provide funding through grants
▪ Partner with National Assembly in
identifying viable RE projects that could be
implemented as constituency projects with
funds provided through special budgetary
allocations
▪ Protect sponsors of RE projects from unfair
acquisition of assets by DISCOs in the event
that rural electrification frontier meets
advancing urban electrification frontiers
REA policy objectives
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REA’S POLICY OBJECTIVES (5/5)
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CONTENTS
Background and starting point1
Rural electrification goals and
strategy2
Institutional framework for delivery4
Rural Electrification Fund3
Our pathway forward5
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RURAL ELECTRIFICATION FUND3
▪ More equitable access to electricity across regions
▪ Maximize the economic, social and environmental benefits of rural electrification subsidiaries
▪ Promote expansion of the grid and development of off-grid electrification
▪ Stimulate innovate approaches to rural electrification.
REF Objectives ▪ Any surplus appropriated pursuant to the EPSR Act 2005 (section 53)
▪ Any fines obtained by NERC pursuant to the EPSR Act 2005
▪ Any donations, gifts, or loans made by international agencies, State Governments, the Federal Government, local communities, businesses, etc
▪ Any contribution that may be made pursuant to the EPSR Act 2005, and interest and other benefits accrued to the Fund (REF)
▪ Monies appropriated by the National Assembly / Special Intervention fund
▪ Such percentage of the annual turnover of the licensee’s as may be determined by the Commission
Source of REF Funds
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On-grid electrification Isolated mini-grids
Direct Current (DC) Micro/Nano grids
Stand alone systems
Scope of the REF
33 SCOPE OF THE RURAL ELECTRIFICATION FUND
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Applicant(s)
▪ Eligible entity
▪ Free from conflicts of interest
▪ Compliance with all existing business,
tax, social security and related
regulation
▪ Free from bankruptcy or any analogous
situation
▪ Free from offence conviction regarding
its professional conduct
▪ Not subject of a ‘res judicata’
judgement for any illegality
▪ Financially sound and qualified
▪ Completion of all relevant application
process and documentation
Project(s)
▪ Financial commitment towards the
proposed project
▪ Selection of the right Tier for the proposed
project and request for applicable subsidy
within specific Tier
▪ It shall target rural areas
▪ Ability to demonstrate financial
sustainability and profitability
▪ Not requiring a continuous subsidy covering
for operations cost and/or end-user
consumption
▪ Not requiring a 100% subsidy – partly funded
by the applicant
▪ Compliance with existing legislation and
regulation
▪ Technically viable
▪ Ability to support and improve rural
economic development and productivity
3 REF ELIGIBILITY REQUIREMENTS
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▪ REA informs the public about the procedures and
rules governing the competitive process through
relevant print/electronic and social media.
Informing potential bidders
about upcoming
competition
▪ REA launches an EoI with a two-week deadline for
entries through relevant print/electronic and social
media.
Call for Expressions of
Interest (EoI)
▪ REA invites bidders with best EoI to prepare & submit
preliminary business plans/proposals.
▪ REA evaluates proposals and selects winners.Call for Proposals (CfP)
▪ REA notifies winning bidders for agreement signing and
agree on payment schedule for project milestones (for
each project).Disbursement of REF Funds
3 SELECTION PROCESS FOR FUNDING ALLOCATION
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CONTENTS
Background and starting point1
Rural electrification goals and
strategy2
Institutional framework for delivery4
Rural Electrification Fund3
Our pathway forward5
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Federal Ministry of
Power, Works and
Housing
Nigerian Electricity
Regulatory
Commission
Policy/Legi
slative
setting,
and
regulations
REA
Board
REA
Policy
execution
Federal/state
governmentsPrivate sector Donors
Local
communities
Project
sponsors
4 DIFFERENT INSTITUTIONS TO PLAY DIFFERENT ROLES
National
Assembly
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Federal
Ministry of
Power, Works
and Housing
▪ Formulate and implement policies on electric supply to rural areas
▪ Facilitate rural electrification initiatives and coordinate national power supply
strategy with all stakeholders
▪ Set and revise targets for rural electrification across the country
▪ Monitor and evaluate the performance and impact of rural electrification program
from a policy perspective
NERC
▪ Provide regulatory oversight over rural electrification in Nigeria
▪ Establish tariff model to make RE projects attractive
▪ Monitoring and enforcing stipulated and agreed tariffs
Roles and responsibilities
4 DIFFERENT ROLES IN POLICY SETTING
National
Assembly
▪ Budgetary provisions for REA and REF
▪ Constituency projects
▪ Budgetary Monitoring and Legislative Oversight
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Director REF Management
REA Board
Managing Director /
CEO
Director Projects Support
REF Trust Managers
External Auditors
Director Planning Research and Promotion
Director Finance and Administration
Legal AdvisorLegal Adviser
Internal AuditInternal Audit
ProcurementProcurement
4 REA ORGANIZATION STRUCTURE
Executive Director
Technical Services
Executive Director
RE Fund
Executive Director
Corporate Services
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Develop
project
proposal
Evaluate
proposal
Approve
funding
Disburse
fund
Monitor
project
progress
Project
commissio
n
Post-
project
review
RE Board
RE Fund
management
Trust Manager
Finance and
Administration
Projects
Department
Procurement
Independent
project
sponsors
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Responsible
Accountable
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Consult
inform
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4 LIFE CYCLE OF A RE FUND PROJECT
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REA Board
REF Fund
Management
Trust Manager
▪ Develop policies and guidelines for REA’s operations
▪ Develop policies and procedures for the optimal allocation and use of REF
subsidies and approve allocation of REF subsidies
▪ Requests and receives expression of interests (EOI) proposals for RE projects
▪ Evaluate RE project proposals in-line with REA policies and guidelines
▪ Develop RE projects for potential bidders
▪ …Finance and
Account
RE Projects
Procurement
Independent
Project Sponsor
▪ Ensure funds are managed transparently
▪ Provide oversight to ensure RE project proposals are approved and
disbursed in-line with REA policies and guidelines
▪ Responsible for internal financial and management of the agency
▪ Implement grant disbursement schedule
▪ Identify viable RE projects in-line with REA’s guidance
▪ Build and operate RE projects
▪ Coordinate the procurement of equipment required for RE projects
▪ Ensure sufficient supply of required low-cost technologies for RE projects
▪ Provide technical support to RE projects in accordance to REA policies
▪ Monitor project development and supervise RE project implementation
RE project roles Responsibilities in project delivery
4 RESPONSIBILITIES IN REF PROJECT DELIVERY
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CONTENTS
Background and starting point1
Rural electrification goals and
strategy2
Institutional framework for delivery4
Rural Electrification Fund3
Our pathway forward5
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OUR PATHWAY FORWARD5
Key steps to beginning the implementation of the Rural Electrification Strategy
▪ Establishment of Board for REA
▪ Secure minimum operating budget
▪ Conclude with NERC fees and levies
▪ Establish Rural Electrification Fund
▪ Contract a Trust Agent to ensure REF funds are managed transparently
▪ Meet with NERC to discuss regulations for RE schemes >1 MW generation and >100 KW distribution
▪ Establish energy database for REA projects
▪ Secure pledges from donors
▪ Presidential approval of RE strategy and plan
▪ Develop REA masterplan
▪ Create and implement communications strategy for RESIP
FOR MORE INFORMATION PLEASE CONTACT:
DR. SANUSI OHIARE
EXECUTIVE DIRECTOR
RURAL ELECTRIFICATION FUND
www.rea.gov.ng