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Discos, Renewable Energy Firms Sign MoU on Mini-grids

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Power - Investors King
  • 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.”

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Guinness Nigeria Postpones Spirits Importation Exit, Extends Deal with Diageo

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Guinness Nigeria Plc has announced a delay in its plan to halt the importation of spirits as it extended its agreement with multinational alcoholic beverage company Diageo until 2025.

The decision, communicated through a corporate notice filed with the Nigerian Exchange Limited on Tuesday, cited a longer-than-expected transition period for separating its business from Diageo’s.

Initially slated for discontinuation in April 2024, the importation of premium spirits like Johnnie Walker, Singleton, Baileys, and others under the 2016 sale and distribution agreement with Diageo will now continue for an additional year.

The extension comes as the process of business separation between Guinness Nigeria, a subsidiary of Diageo, and Diageo itself faces unexpected delays.

In October, Guinness Nigeria had announced plans to cease importing spirits from Diageo, a move aimed at reducing its foreign exchange requirements.

However, the separation process has encountered unforeseen hurdles, necessitating the extension of the importation agreement.

The notice, signed by the company’s Legal Director/Company Secretary, Abidemi Ademola, highlighted the ongoing efforts by Guinness Nigeria and Diageo to implement the separation, originally scheduled for completion by April 2024.

The extension underscores the complexity of disentangling the businesses and ensuring a smooth transition.

Guinness Nigeria reaffirmed its commitment to the long-term growth strategy, aligning with Diageo’s decision to establish a new, wholly-owned spirits-focused business.

Despite the delay, both companies remain dedicated to managing the importation and distribution of international premium spirits in West and Central Africa, with Nigeria as a key hub.

The postponement comes amid challenges faced by Guinness Nigeria, including significant exchange rate losses, which amounted to N49 billion in the 2023 half-year operations.

Despite these setbacks, the company remains optimistic about its future prospects in the Nigerian market.

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Private Sector Warns: Interest Rate Hike to Trigger Job Cuts and Inflation Surge

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Private employers

As the Central Bank of Nigeria (CBN) announced a hike in the Monetary Policy Rate (MPR) from 22.75% to 24.75%, concerns have been raised by the private sector regarding the potential ramifications on job stability and inflationary pressures.

The move, aimed at curbing inflation and stabilizing the exchange rate, has prompted apprehension among business operators who fear adverse effects on the economy.

Representatives from the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) and the Nigerian Association of Small Scale Industrialists have voiced their worries over the increased difficulty in accessing affordable credit.

They argue that the higher interest rates will impede the private sector’s ability to borrow funds for expansion and operational activities.

This, they fear, could lead to a reduction in business investments and subsequently result in widespread job cuts across various sectors.

The Lagos Chamber of Commerce and Industry (LCCI) acknowledged the necessity of the interest rate hike but emphasized the potential negative consequences it may bring.

While describing it as a “price businesses would have to pay,” the LCCI highlighted the current fragility of the economy, exacerbated by various policy missteps.

They cautioned that the increased cost of borrowing could stifle entrepreneurial activities and discourage expansion plans critical for economic growth and job creation.

Experts have echoed these concerns, warning that the tightening monetary conditions could exacerbate inflationary pressures and hinder economic recovery efforts.

With inflation already soaring at 31.70%, the rate hike could further fuel price hikes, especially in essential goods and services, thus eroding the purchasing power of consumers.

However, CBN Governor Yemi Cardoso defended the decision, citing the imperative to address current inflationary pressures and ensure sustained exchange rate stability.

He emphasized the need to restore the purchasing power of ordinary Nigerians and expressed confidence that the economy would stabilize by the end of the year.

Despite assurances from the CBN, stakeholders remain cautious, calling for a more nuanced approach that balances the need for price stability with the imperative of fostering economic growth and job creation.

As businesses brace for the impact of the interest rate hike, all eyes are on the evolving economic landscape and the measures taken to mitigate its effects on livelihoods and inflation.

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Breaking Barriers: Transcorp Hotels CEO Shares Journey from Crisis to Success

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Dupe Olusola

Dupe Olusola, the Managing Director/CEO of Transcorp Hotels Plc, reflects on her remarkable journey from navigating the depths of a global pandemic to achieving unprecedented success in the hospitality industry.

Appointed in March 2020, amidst the onset of the COVID-19 pandemic, Olusola found herself at the helm of a company grappling with the severe economic fallout and operational challenges inflicted by the crisis.

Faced with a drop in occupancy rates from 70% to a mere 5%, Olusola and her team were confronted with the daunting task of steering Transcorp Hotels through uncharted waters.

Undeterred by the adversity, they embarked on a journey of transformation, leveraging creativity and resilience to navigate the turbulent landscape.

Implementing innovative strategies such as introducing drive-through cinemas, setting up on-site COVID-19 testing facilities, and enhancing take-away services, Transcorp Hotels adapted to meet the evolving needs of its guests and ensure continuity amidst the crisis.

Embracing disruption as a catalyst for growth, Olusola fostered a culture of collaboration and teamwork, rallying her colleagues to overcome obstacles and embrace change.

Through unwavering determination and a commitment to excellence, Transcorp Hotels emerged from the pandemic stronger than ever, breaking profit and revenue records year after year.

“It’s indeed been a great opportunity to learn and relearn, to lead and to grow. When you see success stories, remember it’s a journey with twists, turns, ups and downs but in the end, it will all be okay”, she said.

Olusola’s leadership exemplifies the power of adaptability and perseverance, inspiring her team to transcend limitations and chart a course towards unprecedented success.

As Transcorp Hotels continues to flourish under her stewardship, Olusola remains steadfast in her dedication to driving innovation, fostering growth, and breaking barriers in the hospitality industry.

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