Nigeria: Feasibility Study: Darway Coast Energy Access Project

The Grantee invites submission of qualifications and proposal data (collectively referred to as the “Proposal”) from interested U.S. firms that are qualified on the basis of experience and capability to execute a feasibility study to assess the technical, environmental, economic, and financial analysis necessary to implement approximately 95 mini-grids primarily in southern Nigeria.

Project Background

Nigeria has an estimated 85 million people who are underserved by or unconnected to the electricity grid. Nationally, those who can afford it use a total 14 gigawatts produced by small gasoline and diesel generator sets, at a cost of $0.40 cents a kilowatt hour or more. Not only is this power generation expensive, but it is generally unreliable and heavily polluting. Solar mini-grid and home systems can provide a less expensive, cleaner, and more reliable alternative to the millions of people who cannot afford gasoline or diesel-based power. It is estimated that solar mini-grid and home systems could create an over $9 billion/year market that could save Nigerian families and businesses $4.4 billion/year. The Nigerian government has worked with development finance institutions over the last few years to create a financial and regulatory environment that will enable the rapid development of the solar mini-grid market. The mini-grid sector is built upon the Nigerian Electricity Regulatory Commission Mini Grid Regulation of 2017, which provides a well-defined regulatory environment for mini-grids. This regulation allows developers to reserve a site for 12 months through an exclusivity agreement with a community while the project is developed, shielding it from competitors. In addition, the regulation outlines the financial and operational terms in the event of grid entry and provides for compensation.

The Project aims to build, own, and operate 80 mini-grids in rural or peri-urban communities currently not connected to the grid or not receiving reliable energy (“Mini-grids”), and 15 distributed generation units for clusters of commercial, industrial, and institutional (“CI&I”) customers, such as markets, hospitals, and agricultural operations. The Mini-grids are primarily expected to be built in communities across six states in southern Nigeria, including: Rivers, Anambra, Imo, Abia, Ebonyi, Akwa Ibom, and Enugu States. Of the 80 Mini-grids sites, Darway has already signed exclusivity agreements with 20 communities. These communities were chosen in large part because they have a strong mix of residential and commercial energy demand. The CI&I units, and some of the Mini-grids, are expected to be located within the AEDC (Abuja), Port Harcourt (Rivers), Eko (Lagos), and Enugu distribution company (“DISCO”) concessions. Darway has agreements in place with AEDC, Port Harcourt DISCO, Eko DISCOs and Enugu DISCO to help serve both CI&I entities and communities within their concessions that have been cut off from power for many years or experiencing unreliable supply. Darway is exploring other CI&I sites, including sites that would support greater resiliency for communities and businesses, such as hospitals and small-scale agricultural manufacturing.

All of the Mini-grids and CI&I units will use Tier 1 solar photovoltaic (“PV”) panels with lithium batteries. Sites that require a reliable 24/7 power supply will also be built
with diesel engine generators for back-up. The PV and storage inverters will be modular so that each site can be built with optimal minimal generation and storage that can be scaled up or down as load demand increases or decreases.

About the Grantee

Darway Coast Nig. Ltd provides affordable and reliable electricity to off-grid households and commercial customers in Nigeria. It specializes in providing scalable renewable energy systems – solar PV and lithium batteries with advanced management and monitoring technologies – for off-grid and underserved residential and commercial customers. The company was founded in 2015 and started operations in 2017. To date, it has four operational mini-grids, including a pilot mini-grid in Imo State, two mini-grids in Rivers State that serve a combination of roughly 150 residential and commercial customers, and a mini-grid in Lagos State that serves approximately 50 commercial customers.

About the Study

The Study includes initial site screening and final site selection, as well as in-person site assessments to conduct energy audits, willingness to pay surveys, preliminary engineering, and environmental and social impact assessments according to NERC regulations. This work would be conducted in close coordination with the Grantee, who would simultaneously be organizing community meetings and finalizing exclusivity and other agreements. The Study would also include a regulatory and legal analysis, an economic and financial analysis, a U.S. source of supply analysis, a development impact assessment, and an implementation plan.

The U.S. firm selected will be paid in U.S. dollars from a US$ 952,383 grant to the Grantee from the U.S. Trade and Development Agency.

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Nigeria: Feasibility Study: Darway Coast Energy Access Project

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