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Poor Power Supply: Startups to the Rescue

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  • Poor Power Supply: Startups to the Rescue

Poor power supply is affecting economic growth. Tech startups are tackling the problem, reports Daniel Essiet.

Energy is an essential factor for reducing poverty and boosting economic growth. But across Nigeria, there is inadequate energy to spur the much- needed development.

About 70 per cent of households are either off-grid or have a ‘bad grid’ connection with less than four hours of electricity per day, according to a report by Dalbery.

To this end, analysts say expanding electrification is an important step towards building an economy. This has created opportunities for tech startups, which are preoccupied with delivering transformative change through solar and other forms of alternative energy.

Now, there are entrepreneurs powering solar street lights and solar projects. Some are processing waste into biodiesel and solar energy.

One of them is Quaint Global Energy Solutions. The firm develops renewable power projects and provides solar energy solutions to rural Nigeria. The company has been given a grant by the United States Trade and Development Agency for a solar power project that they are developing in northern Nigeria.

Quaint Global Energy Solutions is working with California-based Tetra Tech. On its completion, the project is expected to bring 50 megawatts of clean energy to Kaduna State and generate more than $160 million revenue.

Another one is Rensource Energy, aimed at delivering affordable solar energy to households and businesses to replace the use of generators.

It introduced a segmented subscription-based business model in March 2017 that enabled customers prepay for energy, rather than own the infrastructure. This means customers can save a lot of money by switching to solar energy. The system uses a combination of long-lasting lithium-based batteries and solar energy. The service is offered through a mobile-based user interface that allows its customers to pay their bills, and to understand how they use their power.

Since its inception in 2015, Rensource has managed well over 1,500 customers.

Last year, the firm secured a loan of €500,000 from Trine Financial Limited.

Early last year, the renewable energy startup also secured $3.5 million in bridge financing to expand the business. In 2016, Rensource had secured a previous funding of about $1.1 million, bringing its total investments from external funding to $5.5 million.

Other startups have also entered the sector. But that of OneWattSolar, a startup based in Lagos, has been significant. It allows Nigerians to pay for solar energy with Blockchain tokens.

The company allows customers to purchase tokens in naira using the platforms of third party tech finance firms.

It seeks to help people pay for the energy using Blockchain without owning the solar infrastructure that provides the power.

OneWattSolar uses blockchain in three ways: raises funds to buy and install the solar systems, helps users track energy use and allow users buy energy credits for their homes.The startup targets customers who spend about N10, 000 monthly or more on their energy bills. There are plans to target other customer segments.

So far, it has a target of 12,000 homes or businesses with clean solar energy.

OneWattSolar systems comprise solar panels, internet-enabled meter system and inverter battery technology. The system components are being custom-designed specifically to meet the needs of its customers as against buying ready-made solar panels and equipment. OneWattSolar pays for, installs, owns and operates the Solar Residential Energy Unit (SHS). OneWattSolar is working with independent solar installers within GoSolar Africa’s network.

OneWattSolar was founded by GoSolar Africana renewable energy startup also based in Lagos that provides clean energy to households, businesses, schools, non-profits and government organisations.

GoSolar Africa is led by Femi Oye who founded the company in 2010.

Another firm is AllOn, an impact investing firm established to stimulate the development of collaborative partnerships for innovative solutions that facilitate increased access to affordable, reliable and sustainable energy sources in Nigeria.

AllOn CEO, Dr. Wiebe Boer Boer said: “The energy gap in Nigeria is the foundation for so many of the country’s economic and social development problems.”

He said power distribution is a major stumbling block to development with firms seldom making it beyond big cities due to high costs of installation.

He said the huge energy access gap in the country means the opportunities to address the gap were also considerable.

With limited grid coverage, the Allon chief noted that many Nigerians relied on electricity generators.

He stated that with Nigeria’s increasing energy requirements to achieve its developmental goals, there was the need to find and support clean energy innovators to build successful and sustainable businesses around their solutions.

He said many small scale firms and startups have ventured into the sector and can explore its vast amount renewable energy potential.

Boer explained that many entrepreneurs were rising to the challenge of leveraging the off-grid power revolution to provide electricity for millions of people in parts of the country through innovative and adaptive technologies and business models borrowed from outside.

One area that offers sustainable investment opportunities for entrepreneurs, he said, is solar energy due to advances in technologies.

Boer said the mini-grids and solar home systems that will save Nigerians billions yearly.

He said the company focuses on energy efficiency and renewable energy and aims to help startups develop practical solutions, test-bed the solutions in actual projects, and build their track record.

He said his organisation is ready to support startups to bring lighting solutions to off-grid communities who live in informal settlements and rural areas across the country.

According to him, there are opportunities for small businesses to invest in solar cells, earn income and help bring electricity to areas in need.

He said startups could provide low-cost, environmentally-friendly power sources for lighting, cooking, among others.

Boer said the company would invest in entrepreneurs that could provide electricity to households without going through the complexities of building a big generation and transmission infrastructure.

He said funders were searching for innovators in the sector, to expand off-grid energy access for underserved markets, through solar, wind and biogas technologies.

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.

Economy

Federal Government Appeals to Electricity Union Amid Tariff Hike Tensions

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The Federal Government has made a direct appeal to the National Union of Electricity Employees (NUEE) amidst rising tensions over the recent hike in electricity tariffs.

The plea comes as the union continues to voice its dissatisfaction with the government’s decision to remove the subsidy on the tariff payable by Band A customers, warning of potential service withdrawal if the decision is not reversed.

In an interview with our correspondent, Adebiyi Adeyeye, the National President of the NUEE, reiterated the union’s stance against the increase, citing the impracticality of expecting their members to collect higher tariffs from customers without a proportional improvement in service.

Adeyeye emphasized the union’s concerns over the discrepancy between the promised 20 hours of daily power supply and the actual delivery, which he deemed “not feasible” due to existing infrastructural limitations.

The Federal Government, represented by Minister of Power Adebayo Adelabu, called for understanding and patience from the union. Speaking through his media aide, Bolaji Tunji, Adelabu assured that efforts were being made to improve electricity supply across the nation. He emphasized the necessity of these changes for the country’s long-term economic growth and job creation.

“We just want to appeal to the labor union to understand the context of these changes. It’s about working together to address the underlying issues within the power sector. It is not anybody’s joy that there are blackouts all the time,” Adelabu stated.

He added that the steps being taken would ultimately benefit the economy and urged the union to bear with the government during this transitional phase.

Adeyeye maintained that the union’s primary objective is to safeguard the well-being of its members, who are facing increased threats due to the tariff hike.

He stressed the need for immediate action from the government to resolve the issues, stating that the union would withdraw its services if necessary.

As the standoff continues, the public watches with interest, hoping for a resolution that will avoid disruptions to the country’s power supply and maintain a harmonious relationship between the government and electricity workers.

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Economy

Minister of Power Pledges 6,000 Megawatts Electricity Generation in Six Months

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Adebayo Adelabu has made a bold pledge to ramp up electricity generation to 6,000 megawatts (MW) within the next six months.

This announcement comes amidst ongoing efforts to tackle the longstanding issue of inadequate power supply that has plagued the country for years.

During an appearance on Channel Television’s Politics Today program, Adelabu said the government is committed to resolving the issues hindering the power sector’s efficiency.

He expressed confidence in the administration’s ability to overcome the challenges and deliver tangible results to the Nigerian populace.

Currently, Nigeria generates and transmits over 4,000MW of electricity with distribution bottlenecks being identified as a major obstacle.

Adelabu assured that steps are being taken to address these distribution challenges and ensure that the generated power reaches consumers across the country effectively.

The minister highlighted that the government has been proactive in seeking the expertise of professionals and engaging stakeholders to identify the root causes of the power sector’s problems and devise appropriate solutions.

Adelabu acknowledged the existing gap between Nigeria’s installed capacity of 13,000MW and the actual generation output, attributing it to various factors that have impeded optimal performance.

Despite these challenges, he expressed optimism that the government’s initiatives would lead to a substantial increase in electricity generation, marking a significant milestone in Nigeria’s energy sector.

Addressing concerns about the recent decline in power generation due to low gas supply, Adelabu assured Nigerians that measures are being taken to rectify the situation.

He acknowledged the impact of power outages on citizens’ daily lives and reiterated the government’s commitment to providing stable electricity supply within the stipulated timeframe.

The Minister’s assurance of achieving 6,000MW of electricity generation in the next six months comes as a ray of hope for millions of Nigerians who have long endured the consequences of inadequate power supply.

With ongoing reforms and targeted interventions, there is optimism that Nigeria’s power sector will witness a transformative change, ushering in an era of improved access to electricity for all citizens.

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Economy

Nigeria’s Economic Woes to Drag Down Sub-Saharan Growth, World Bank Forecasts

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The World Bank’s latest report on the economic outlook for Western and Central Africa has highlighted Nigeria’s sluggish economic growth as a significant factor impeding the sub-region’s overall performance.

According to the report, while economic activities in the region are expected to increase, Nigeria’s lower-than-average growth trajectory will act as a hindrance to broader economic expansion.

The report indicates that economic activity in Western and Central Africa is set to rise from 3.2 percent in 2023 to 3.7 percent in 2024 and further accelerate to 4.2 percent in 2025–2026.

However, Nigeria’s growth, projected at 3.3 percent in 2024 and 3.6 percent in 2025–2026, falls below the sub-region’s average.

The World Bank underscores the importance of macroeconomic and fiscal reforms in Nigeria, which it anticipates will gradually yield results.

It expects the oil sector to stabilize with a recovery in production and slightly lower prices, contributing to a more stable macroeconomic environment.

Despite these measures, the report emphasizes the need for structural reforms to foster higher growth rates.

In contrast, economic activities in the West African Economic and Monetary Union are projected to increase significantly, with growth rates of 5.9 percent in 2024 and 6.2 percent in 2025.

Solid performances from countries like Benin, Côte d’Ivoire, Niger, and Senegal are cited as key drivers of growth in the region.

The report also highlights the importance of monetary policy adjustments and reforms in supporting economic growth.

For instance, a more accommodative monetary policy by the Central Bank of West African States is expected to bolster private consumption in Côte d’Ivoire.

Also, investments in sectors such as agriculture, manufacturing, and telecommunications are anticipated to increase due to improvements in the business environment.

However, Nigeria continues to grapple with multidimensional poverty as highlighted by the National Bureau of Statistics.

Over half of Nigeria’s population is considered multidimensionally poor, with rural areas disproportionately affected. The World Bank underscores the need for concerted efforts to address poverty and inequality in the country.

Sub-Saharan Africa as a whole faces challenges in deepening and lengthening economic growth. Despite recent progress, growth remains volatile, and poverty rates remain high.

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