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Discos, Renewable Energy Firms Sign MoU on Mini-grids

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  • Discos, Renewable Energy Firms Sign MoU on Mini-grids

Power distribution companies are entering into partnerships with renewable energy firms for the development of mini-grids to boost the supply of electricity in Nigeria.

According to officials from the Rural Electrification Agency and stakeholders in the renewable energy space, already, they have signed memorandum of understanding for the execution of the project, adding that the move will reduce the poor power supply situation in communities not energised by the national grid.

Speaking at the breakfast meeting on Financing Off-grid Energy Projects and the inauguration of Nigerian Mini-grid Investment Report at the 24th Nigerian Economic Summit in Abuja on Tuesday, the Chief Executive Officer, Rubitec Solar Nigeria Limited, a renewable energy firm, Bolade Soremekun, stated that interconnected mini-grids were being established by some Discos.

He said, “We signed an MoU with Benin Disco for developing interconnected mini-grids and it took time to educate the Disco and understand what their needs are and how to manage them. It is a territory that has been on concession to them (Discos), so in terms of interconnected mini-grids, we need to work with them.

“In terms of isolated mini-grids, they need to know that we are doing projects on them and not necessarily for us to get their permission because the NERC (Nigerian Electricity Regulatory Commission) regulation allows us to do isolated mini-grids.”

Soremekun added, “So what the interconnected mini-grid policy does is that if there are areas that are already under the grid but not energised, or if there is a distribution line that is not energised or has no electricity, we can come in and supply electricity through renewable energy, mostly solar.

“We will then meter the customers with prepaid meters and use the Discos’ distribution lines. Now, these distribution lines may need to be upgraded and we lease the lines and pay the Discos for it. With the MoUs being signed, I think more Discos will begin to have increased confidence to work with us.”

The President, Renewable Energy Association of Nigeria, Segun Adaju, said there were opportunities in the mini-grids space and urged the Discos to take advantage of it.

He said, “There is an opportunity clearly in this space, provided Discos are not seeing it as an encroachment into their territories. I can give you an example, there is one of our members, Rubitec Solar, who has developed a mini-grid in partnership with a Disco. That is a test case.

“This is why we are saying to the Discos that since they don’t have enough energy to distribute within their network, we are interested and willing to partner them to generate energy that they can also distribute and meet their target and earn more revenue.”

On the mini-grid investment report, which was published by the Nigerian Economic Summit Group, Adaju said, “This is an investment report that has shown that mini-grid is possible in Nigeria and that this country has the biggest potential in Africa. For example, there is a plan to do about 10,000 mini-grids between now and 2023. And there are some mini-grids that have been developed that have proven commercial viability.”

On whether the mini-power grid sector had been favourable to investors, he stated, “The sector is better than what it was three years ago.”

Adaju added, “There is a major improvement. For example, there is a mini-grid policy framework that is seen as one of the best in Africa and was developed by NERC. It has made the sector attractive, although there are still many grounds to cover.

“There is a market in Nigeria and mini-grids are running efficiently. People are paying and this is to the surprise of many stakeholders. So, this is to say that Nigeria is ready; it is a market where investments should come to and there is an estimated $500bn funding in the development space that can be accessed.”

The Manager, Rocky Mountain Institute, James Sherwood, a contributor to the report, said the mini-grids sector could attract investments worth $9bn annually to Nigeria.

He said, “What this report shows is that there is a very strong mini-grid industry getting started here in Nigeria and there are some clear opportunities to grow that industry going forward. It has the opportunity to be a $9bn per year industry and with a little bit of additional work, we can quickly move this to open up opportunities to use mini-grids as a tool for energy access.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Nigerian Brand, JR Farms Acquires 11% Stake in Rwandan Firm

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Nigerian Brand, JR Farms Acquires 11% Stake in Rwandan Firm

JR Firms, an agribusiness firm with headquarters in Nigeria, has announced partnership with Sanit Wing Rwanda through the acquisition of 11 per cent stake in the company.

The CEO of the company, Mr Rotimi Olawale, explained in a statement that the partnership was in furtherance of its goals to ensure food security, create decent jobs and raise the next generation of agrarian leaders in Africa.

The stake was acquired through Green Agribusiness Fund, an initiative of JR Farms designed to invest in youth-led agribusinesses across Africa.

Sanit Wing Rwanda is an agro-processing company that processes avocado oil and cosmetics that are natural, quality, affordable, reliable and viable.

The vision of the company is to become the leading producers of best quality avocado and avocado by-products in Africa by creating value across the avocado value chain.

With focus on bringing together over 20,000 professional Avocado farmers on board and planting of three million avocado trees by 2025 through contract farming, the company currently works with One Acre Fund in supply of avocado to its processing facility.

The products of the company which include avocado oil, skin care (SANTAVO), hair cream and soap are being sold locally and exported to regional market in Kenya.

With the new partnership with JR Farms- the products of the company will enjoy more access to markets focusing on Africa and the European Union by leveraging on partnerships and trade windows available.

Aside funding, the partnership comes with project support in areas of market exposure, capacity building, exposure and other thematic support to grow the business over the next four years.

JR Farms has agribusiness operations in Nigeria, Rwanda, United States and Zambia respectively.

In Nigeria, the company deals in cassava value chain processing cassava to national staple “garri” which is consumed by over 80 million Nigerians on daily basis, while in Rwanda, it works in the coffee value chain with over 4,000 coffee farmers spread across the East Central African country.

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Shut Down Depots Selling Petrol Above Approved Price – Marketers

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Shut Down Depots Selling Petrol Above Approved Price – Marketers

The Federal Government should close down depots that are selling petrol above the approved price, oil marketers said on Thursday.

National President, Independent Petroleum Marketers Association of Nigeria, Sanusi Fari, said the sale of petrol above government approved price by depot owners would soon lead to a hike in the commodity’s pump price.

Fari told journalists in Abuja that the government through its agencies such as the Department of State Services and the Department of Petroleum Resources should curb the development to avoid crisis in the downstream oil sector.

He said some private depot owners were selling at N165 per litre to independent marketers, way above the government stipulated price of N148 per litre.

Fari said, “Our challenge is the inconsistency in the pricing of petrol. Up till a week ago, government was still insisting that the February price for petrol remained unchanged.

“And most of the private depot owners are selling above the government stipulated price. As at today ( February 25, 2021) private depot owners are selling at N165 per litre to independent marketers.”

He added, “In the last six years, only NNPC imports refined products into this country and these tank farms buy their products from NNPC under a controlled price.

“This has affected our businesses seriously because government is insisting that we sell at the rate of N165, which is not going to work.”

The IPMAN president said filling station owners buy the product at N165 per litre from the private depots and incur other expenses such as transportation, rent, etc.

“So government cannot expect us to sell less than what we buy,” he said.

Fari added, “This is why we are calling on government and agencies that are saddled with the responsibility to control petrol pricing to urgently clamp down on depots that are selling above the stipulated price.”

The Nigerian National Petroleum Corporation, the country’s sole importer of patrol, recently stated that it never hiked the cost of petrol to depots.

It also enjoined the depot owners to sell the product at the approved rate and called on the DPR to enforce the stipulated price across the depots.

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Nigeria Will Benefit Less From African Trade Deal – NESG

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Nigeria Will Benefit Less From African Trade Deal – NESG

Nigeria and other resource-based countries will benefit less from the African Continental Free Trade Area than economies that are more diversified, the Nigerian Economic Summit Group has said.

The NESG, a private sector-led think-tank, said in its 2021 Macroeconomic Outlook that Nigeria could reap more gains through export diversification away from crude oil.

It said trade in Africa remained dominated by raw materials and less processed products, adding that on average, minerals and agriculture accounted for 44 per cent and 16 per cent of intra-African trade respectively between 2007 and 2017.

The NESG said, “Evidence has shown that African economies that are more diversified and have improved transport infrastructure, would benefit more from the trade pact than others that are resource-based and agricultural dependent.

“Putting this in context, South Africa currently accounts for 40 per cent of intra-African manufacturing imports. On the other hand, resource-based countries, such as, Algeria, Egypt and Nigeria – which collectively account for approximately 50 per cent of Africa’s GDP – contribute only 11 per cent to intra-African trade.”

“Another bone of contention is the issue of ‘rules of origin’, which constitutes a significant risk factor. This implies that protectionism practices by some countries could constitute a setback for the establishment of the ambitious single market for Africa. But there are several reasons to be optimistic,” it added.

The group said the World Bank estimates revealed that the AfCFTA would promote manufacturing exports over natural resources, agricultural and services exports, and that manufacturing exports would account for one-third of the projected total exports of $2.5tn by 2035.

It said, “Nigeria could reap more gains through export diversification away from crude oil, as manufacturing exports currently account for an average of nine per cent of the country’s total exports.

“This suggests that efforts should be directed at strengthening domestic value chains, particularly the agro-allied industrial base.

“To achieve this, there is a need to attract private capital, most especially, FDI, that would allow for knowledge and technological transfers.”

According to the NESG, for Nigeria to maximally benefit from the trade deal, there is an urgent need to also address transport infrastructure bottlenecks and provide improved logistics.

It said, “Finding a lasting solution to the Apapa gridlock by creating similar ports in other regions of the country, so as to ensure speedy clearance of consignments needs to be prioritised.

“Nigeria also needs to set standards for locally-made goods to enhance their attractiveness in the regional market.

“The Nigerian government as a matter of urgency needs to operate an efficient and corruption-free land border system, so as to guide against the importation of low-cost sub-standard products into the country.

“It is only when these and many more reforms are implemented that Nigeria can begin to reap the benefits of the trade deal.”

The group noted that owing to the outbreak of COVID-19, the implementation of the AfCFTA was postponed from July 1, 2020 to January 1, 2021.

It said, “The key goal of the free trade pact is to expand the volume of intra-African trade, which stood at 16 per cent in 2018 .“Till date, 36 countries, including Nigeria, have ratified the agreement. The trade deal is expected to create a single market with a combined GDP of $2.5tn and total population or market size of 1.2 billion.”

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