Billionaire investor, Richard Branson seems to be enthusiastic about Nigeria again. In a recent post on his blog, Branson revealed that off grid power solutions in Nigeria could yield an estimated $9.2 billion annually.
How did he arrive at the figures ?
Branson, quoting a report by the Rocky Mountain insitute revealed that Nigerians spend an estimated $14 billion generating power using petroleum products. Developing off-grid alternatives to complement the grid could create a $9.2B/year market opportunity for mini-grids and solar home systems that will save $4.4B/year for Nigerian homes and businesses.
What are off grid power solutions ?
Offgrid power solutions are alternative power systems that do not rely on the National grid. They may be run using gas or renewable energy such as wind and solar energy.
Nigeria’s power sector is chaotic
Nigeria has struggled with epileptic power supply for decades. The country’s power grid is owned by the government and often breaks down to age and dilapidated equipment. Disribution companies in the country are also weighed down by several factors including low receipts from consumers, energy theft and a struggle. Discos inability to pay cascades along the entire value.
A huge proportion of the country relies on generators powered by petrol. Scarcity of fuel (as was witnessed in December last year) which is a frequent event leads to a shut down of commercial activities. The country’s refineries are old and epileptic, while the government insists on regulating petrol prices.
A few hurdles remain
Despite the wide opportunities, alternative energy solutions have a few hurdles to scale before they become mainstream in Nigeria.. Majority of the components used in their assembly, are imported. This leaves their cost susceptible to foreign exchange rate volatility.
Who is Richard Branson ?
Richard Branson is a British investor and philantrophist. He founded the Virgin group which controls over 400 companies. Virgin Atlantic, in partnership with the Federal Government established Virgin Nigeria. The airline was the successor to Nigerian Airways, the country’s first national carrier.
Virgin however sold its stake after several disagreements with the Ministry of Transportation, and an alleged breach of an agreement by the Federal Government to operate from the international terminal. He also lamented that the country’s politicians were corrupt, and vowed never to do business in Nigeria again.