The federal government of Nigeria has commenced its program of installing solar home systems across 5 million households in the country. After a three-year period, beneficiaries could fully own the solar system and be entitled to a monthly payment of up to $10.49. The program will also foster the development of the local manufacturing industry for the assembly and manufacturing of components. The Central Bank of Nigeria will also provide funds to private manufacturers at credit rates of 5 to 10 per cent. The estimated cost of the project is $369m and is expected to meet the electricity needs of about 25 million Nigerians. Further, the World Bank has offered to participate in the program by offering a grant amounting to 20 per cent of the retail cost of the solar home systems.
The move is a part of Nigeria’s Economic Sustainability Plan (2020) which is being carried out by a committee headed by the Vice President. As a part of the program, the solar grids will be set up in households who are under-served and are not connected to the national grid. The initiative has been carried out by the Rural Electrification Agency (REA) to boost the off-grid solar value chain, scale-up local manufacturing and potentially create 250,000 new jobs in the energy sector.
Nigeria’s REA has successfully carried out a similar off-grid project in the past by connecting the Olooji community in Ogun State to electricity for the first time in 200 years. The country is also steadily electrifying regions through small-scale renewable projects. In December 2020, the REA announced its plans to set up solar hybrid power stations across seven universities in Nigeria. In August 2020, Nigeria’s Ministry of Power launched a tender for eight off-grid projects in underserved areas.