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Renewable Embedded Generation Can Shelter Nigeria from Electricity Shortage

A new study by RMI and Lion’s Head Global Partners presents a new Renewable Embedded Generation business model that would enable energy developers in Nigeria to provide improved electricity services, attracting new investment opportunities for investors.

 

Abuja, Nigeria – September 15, 2022

 A new study, Unlocking Renewable Embedded Generation in Nigeria, by RMI and Lion’s Head Global Partners (LHGP) shows how electricity distribution companies (DISCOs) and renewable energy developers can remedy the electricity shortage common on the country’s national grid. If implemented, the renewable embedded generation (REG) business model not only enables customers to receive reliable electricity supply and reduce costs but also replace noisy and polluting diesel generators in the country. Given the scarcity of public finances to fund improvements to the power supply in the country, the model presents attractive investment opportunities for financiers.

The national grid in Nigeria is susceptible to frequent and extensive power outages due to outdated infrastructure and insufficient capacity. This leads to users supplementing their power supply with self-generation, mainly through diesel generators, which are expensive to run, have a negative effect on air quality, and contribute to the country’s growing CO2 emissions.

“By reducing customer reliance on expensive self-generation, the REG model will decrease the overall cost of electricity and limit exposure to volatile fossil fuel prices,” said Suleiman Babamanu, Nigeria Director of RMI’s Africa Energy Program. “As donors, investors, and governments increasingly seek to align their investment portfolios with net-zero targets, we strongly encourage them to support integration and scaling of renewable energies into the grid through this model.”

According to the study, an adequate blend of solar PV, battery storage, and thermal gas generation in the model increases supply for all customers and enables the provision of 24/7 reliable power to customers.

“Lion’s Head Global Partners is delighted to have worked alongside RMI, as well as private and public sector stakeholders, to deliver on this milestone assignment. From our regular engagement with the market, we are acutely aware of the challenges in the provision of reliable and affordable electricity in Nigeria and view the REG model as further validation of the need for critical partners such as UK PACT. We look forward to furthering collaboration with like-minded stakeholders going forward,” said Olamide Edun, managing director at LHGP.

This model further presents an attractive investment opportunity for developers and climate-aligned financiers. The collaboration among all parties on the model provides access to a large customer pool for DER developers and significant investment opportunities for financiers.

The REG business model has the potential to scale embedded generation and incorporate distributed energy resources for improved reliability. As Nigeria unveils its Energy Transition Plan, the necessary execution of demonstration projects showcasing the REG business model concept will open a viable pathway for an affordable, equitable, and sustainable transition.

For media inquiries, please contact:

RMI – Benson Kibiti, Strategic Communications Manager, bkibiti@rmi.org

LHGP – Olamide Edun, Managing Director, olamide.edun@lhgp.com

Notes to Editors

Director Francis Elisha, Nigeria Program Director Suleiman Babamanu, and Senior Associate Osa Imoukhuede will be available for comment.

The report was written with support from the UK Partnering for Accelerated Climate Transitions (UK PACT) program, implemented in partnership with ICF Consulting.

About RMI

RMI is an independent nonprofit founded in 1982 that transforms global energy systems through market-driven solutions to align with a 1.5°C future and secure a clean, prosperous, zero-carbon future for all. We work in the world’s most critical geographies and engage businesses, policymakers, communities, and NGOs to identify and scale energy system interventions that will cut greenhouse gas emissions at least 50 percent by 2030. RMI has offices in Basalt and Boulder, Colorado; New York City; Oakland, California; Washington, D.C.; and Beijing.

More information on RMI can be found on www.rmi.org or by following us on Twitter @RockyMtnInst.

About Lion’s Head Global Partners

Lion’s Head Global Partners (LHGP) is an investment bank operating across frontier and emerging markets globally. LHGP provides tailored and innovative financial solutions by leveraging its global relationships and networks and local market understanding to deliver the best financial solutions to diverse challenges.