Sharing the Power: Nigerian Community Takes Charge of Their Energy Development

Reliable minigrid electricity brought new people and businesses to Mokoloki Town. As the power system expands, a community-centric model gives citizens a voice in decision-making and a share of the profits.

Chief Alhaja Akamo, the Onigbaje (head of commerce) of Mokoloki town, owns a shop selling biscuits, chips, soap, hard liquor, beer, and most importantly, ice, cold water, and soda drinks, much appreciated in the sweltering, sweat-inducing 90°F (30°C) heat. Akamo’s well-stocked shop, which she operates with her sister, is a must-stop, partially thanks to the electric-powered deep freezers.

“I started this business over 40 years ago. I was selling food items in the past but had to stop due to spoilage caused by the unavailability of power for storage,” says Akamo. Mokoloki, a rural community in Ogun State in Nigeria had been struggling with intermittent electricity access and poor voltage quality. However, Akamo’s enterprise boomed when a solar and battery-powered undergrid minigrid went live. She was able to serve customers both from inside and outside of the community and operate longer store hours. “I would spend the night at the shop making sales all night long. It was so good at the initial stage that we would have to turn off our freezers when things got too frozen.”

Akamo is one of several entrepreneurs who benefited from the additional hours of electricity, particularly those who need 24 hours of power to scale businesses, generate more income, and improve their livelihoods.

A Victim of its Own Success

Mokoloki’s success has rapidly outgrown its minigrid capacity. Now, the power system has been upgraded — lighting up homes and empowering community members. “Mokoloki is an example of a community being a victim of its own development and success, but also an excellent opportunity to make a case for meeting the increased demand to ensure needs are met,” said RMI’s James Sherwood, who led the team that initially developed the minigrid.

Like water, electricity attracts life. According to the Mokoloki’s King Oba Ademola J.E. Ogunbona, the town increased by 60 percent after the minigrid was installed, from 250 households to an estimated 400. Today, many households not only consume more electricity but also use equipment and appliances with high power demand like air-conditioning systems. The population growth also meant an increase in businesses. This makes energy efficiency measures a necessity for many of the residential homes and for enterprises, especially those that require 24 hours of power a day.

Most importantly, growing electricity consumption means more people are reaping the benefits of energy access and climbing the ladder toward new energy-enabled services and conveniences.

Growing customer demand over time is key to ensure that minigrids are operated economically over the system’s technical lifespan. Modular-scalable design offers the advantage of providing cost-effective electricity while not compromising on electricity service quality for customers. However, existing concessional finance programs tend to focus on supporting new minigrids instead of providing existing systems with the resources to expand, and that means system operators can be left in a lurch when communities outgrow their power systems’ initial capacity.

Next to the unexpected rise in demand for electricity, came a sharp increase in diesel fuel prices — from ₦225/liter (US$0.25/liter) in March 2020 to ₦1,050/liter (US$1.18/liter) in October 2023. The system was initially designed to rely on a blend of low-cost grid and solar electricity, with minimal diesel generator back-up. However, the minigrid was never connected to the national grid, which means they now must use electricity generated from expensive diesel in times when the sun does not fully charge the batteries. The underlying assumptions on which the system was initially designed changed considerably, so that it could not sustainably deliver electricity 24/7 to the Mokoloki Community.

These are some of the challenges that RMI’s Sharing the Power project is helping to address. Sharing the Power, with support from the Dutch Postcode Lottery, develops minigrid projects in sub-Saharan Africa to demonstrate the impact of community-led design on project outcomes. Some of the projects are being integrated into countries’ existing minigrid programs, to support ongoing efforts while testing a unique and scalable approach that models the development potential and financial sustainability of minigrid projects.

Through Sharing the Power, the Mokoloki system was upgraded with more battery capacity, reducing reliance on the expensive electricity sourced from the diesel generator. The project also allows the Mokoloki community to own a portion of the minigrid, take part in decision-making, have more women representative in the decision-making body, and above all, participate in a benefit-sharing mechanism that allows the community to invest some percentage of the revenues from energy sales into community development projects.

Cold Drinks, Cool Medications, and Lights on at Night

Many of the residents of Mokoloki are businesses owners, and don’t take access to stable electricity lightly. Even the King and his wife have been impacted by the strain on the minigrid. The Queen’s ice making business has slowed down, and the Royal Guest House can no longer accommodate as many guests as before, relying on generators and the availability of mechanics to keep it up and running.

“During the first six months of operation of the minigrid, people would come from neighboring villages like Ofada and Owode,” says Akamo. “They were quite certain of getting cold drinks. Sales would go on all night long.” Her hope is that the minigrid soon provides power all night, so she can return to the glorious days of when customers enjoyed cold beverages and refreshments long into the night.

However, keeping the electricity on is not just about profit. It can also be lifesaving as medications must be kept cool most of the day, if not all day.

Sorinola Adebisi is a nurse, pharmacy technician, and local government staffer at Mokoloki Health Centre. She notes how much the community has enjoyed the electricity provided by the minigrid despite some of the recent challenges. One priority for Adebisi is the need to administer medication kept below a certain temperature. In the clinic, a large humming blue and gray metal box with a lid and vents keeps the vaccinations and other medicines cool. This is so critical that there is a backup for the backup — four solar panels installed by the World Bank during the peak of the COVID epidemic.

The health practitioners need lights on at night to make tending patients easier and would like that access at a more affordable cost. “When there is no light, the patients don’t like it, because we won't be able to attend to them perfectly, especially during night deliveries,” remarked Adebisi. “Delivering babies with a torch light is not easy at all. We prefer having the light at all times.”

Similar to Akamo who cites the threat of dark streets as a deterrent to customers, Adebisi believes the clinic could benefit from street lighting to ensure safety for both patients and caretakers.

Powering the Leaders of Tomorrow

The future of energy goes beyond improved healthcare and thriving businesses to the development of the community’s leaders of tomorrow. As it turns out, schools have also been a beneficiary of the minigrid in Mokoloki.

Oganla Saheed is school proprietor at Unique Nursery and Primary School, which has been open since 2016. Even though the school operates during the day, the minigrid still offers multiple benefits. "As you can see at the school when it is Power Holding Company of Nigeria — the government owned utility company providing electricity — we don’t really have interest in their service because most of the time, for months, the electricity is not there,” he says. “Now that we have solar, we are able to run computer training for the children here, all the time. You can see in my office before there was no fan, and now there is a fan here, I can charge my phone, I can do a lot of things with the solar energy.”

Current electricity shortfalls have been affecting students the most after school.

“My children and some other children live near here. That way we were able to do the assignments, do some house chores at night, it’s a little bit different now,” says Saheed. “From some months ago, sometimes the light is no longer overnight these days. Maybe from 9 p.m., the light will be gone until the morning time.” He hopes for drastic change, and for things to be as they once were before. “It has been a thing of pride for us here, because people in the neighboring villages and town, they envied us, they used to come around say ‘Oh you guys at Mokoloki are enjoying your light for 24 hours.’ I really want to go back to that situation; it is a pleasant one.”

Meeting the Demand and Providing Reliable Electricity for All

Sharing the Power was conceived to answer the question of what needs to happen for rural energy projects to unfold their full potential — both for the developer and the community. The program was rolled out in Nigeria in February 2023 as a business model and approach that promotes the co-ownership of the electricity source, or “inclusive energy governance,” where the community gets a share of the proceeds from the minigrid that serves them.

This initiative also leverages the potential of the booming solar minigrids sector. With 210,000 minigrids and an estimated investment of $127 billion required to achieve universal access to energy, approaches leading to long-term efficient operation of these assets are essential to deliver electricity services that unfold the full potential of socioeconomic development in communities.

“Via the Sharing the Power project and the revenue coming into the community, there will be a greater sense of ownership within the community, as well as an opportunity to fund basic communal projects like maintenance of roads, schools, street lighting, water bore holes, and the health Centre from the proceeds,” says Okenwa Anayo Nas, chief executive officer and founder of Nayo Tropical Technology Limited, when asked about the communal benefits of the project.

Five principles underscore this design approach, including:

• Community ownership and/or co-ownership: Host communities can own a stake in the solar minigrid through financial, land, and in-kind contributions.
• Inclusive governance structure: Community representatives are given a voice and voting rights in determining important matters such as tariffs, service levels, and upgrades, which have a direct impact on the community.
• Sharing of benefits: The proceeds derived from the operation of the minigrid, such as revenue and connection fees, are distributed according to an agreed upon formula for sharing between the community and the minigrid developer.
• Gender equity and social inclusion: Women, youth, and minority groups are represented in the minigrid governance structure.
• Structure to safeguard community investment: Both the community investments into the project and proceeds from the operation of the minigrid are subject to “checks-and balances” that offer a high degree of transparency.

Under Sharing the Power, Nayo TT and RMI address the recent supply challenges while ensuring that the 11 percent community stake benefits the whole community. These measures include:

• Upgrading the system’s battery capacity from 190 kWh to 316 kWh and switching from an AC coupled system to a DC coupled system. These changes will increase electricity service delivery at night and will reduce costs, catalyzing the continuous socio-economic growth of the community.
• Innovative Co-ownership and Governance Structure: The Mokoloki town attains a 11 percent stake in the minigrid project. Through the community appointed trustee, the community power association (CPA), made up of nominated members of the town, reflecting gender balance and inclusive representation of minority groups, also gets a vote in key decisions affecting the minigrid.
• Benefit Sharing Mechanism and Safeguards: As with the percentage share of ownership, the community now receives 11 percent of revenues accruing to the minigrid after all operational costs and expenses have been settled. To safeguard the community’s investment in the minigrid, the community and the project developer become joint signatories to the benefit account. Also, only pre-approved projects from a long list of projects put forward during community events are eligible for financing from the accrued revenue.

In addition to Mokoloki, Sharing the Power is deploying community-centric minigrid projects in three other communities across Nigeria. Working with four developers including Nayo Tropical Technology Ltd., HUSK Power Systems Pvt. Ltd, Konexa, and Prado Power LTD with support from the Dutch Postcode Lottery, Sharing the Power aims to scale a community-private-partnership model that will leverage community finance as a means to increase benefits for communities, enhance system performance, and accelerate deployment of minigrids.

If you would like to partner or learn more about Sharing the Power and the Africa Energy Program, please contact SharingThePower@RMI.org.