Dr Sanusi Ohiare
Dr Sanusi Ohiare is the Executive Director, Rural Electrification Fund, Rural Electrification Agency, REA.
In this exclusive interview with Francis Kadiri, the youngest Executive Director in Nigeria discusses how the operationalization of the Rural Electrification Fund, REF has rebranded the REA, adding that the inability of previous administrations to activate and mobilize the Rural Electrification Fund was responsible for the poor performance of the Agency in the past.
Your team has been in office for the past twenty seven months. To what extent would you say the REA has been able to provide electricity to Nigerians?
The new Management of the Rural Electrification Agency (REA), headed by the Managing Director/CEO, Mrs. Damilola Ogunbiyi was appointed in April 2017, thus, we have spent about twenty-seven months in office. Before we came on board, the REA was always in the news for the wrong reasons such as corruption allegations, calls for various probe, abandoned projects, owing huge debts to contractors etc. The agency only focused on grid extension without proper planning for electricity supply, it also had funding challenges as only government funding was relied on, there were no enabling environment for private sector participation, therefore, it was difficult for the agency to deliver its mandate of providing electricity to rural dwellers.
Additionally, given the pivotal role of renewables in providing sustainable electricity to rural communities, we observed upon resumption that little to nothing was done in promoting its use at an agency such as ours. We also realized the lack of effective policies and plans to guide rural renewable energy deployment in the country, and there was also the lack of a Mini-Grid Regulation, to allow for the acceleration of access to electricity in rural communities.
Such were the challenges we met when we came on board. But we are happy that we have changed the narrative within twenty-seven months. We are even happier because we have the next three years to achieve a lot more for Nigerians.
What policies and frameworks are you therefore able to put in place to address the challenges?
To the glory of God, His Excellency, President Muhammadu Buhari has given us all the support we need to succeed, and we are succeeding. The success of the REA under President Buhari is also tied to the sagacity and patriotic disposition of the our very hard-working former Minister of Power, Works and Housing, Babatunde Raji Fashola who knows how to work with people, and our creative and equally hardworking Managing Director, Mrs. Damilola Ogunbiyi.
The Minister ensured that all our memos reached the president and got his approvals. As a result, we scored the first major goals in the area of policy and regulations that have led to the orderly realization of other set goals. For example, the Rural Electrification Strategy and Implementation Plan, RESIP and the Mini Grid Regulations are major policy milestones approved by the President that laid the foundation for further mandate successes of the REA.
These policies gave the REA the platform needed to attract private sector investments to the power sector. In addition to that, the REA has put in place some programs aimed at providing renewable energy solutions like solar power to communities that are off-grid, Universities, Markets etc. using Hybrid Mini-Grids, as well as the provision of Solar Home Systems.
How is the REA addressing the challenge of poor funding, a problem that was reported as responsible for the non-performance of the agency before your team came on board?
Poor funding was indeed a problem, but the present administration has the political will needed to solve the problem, and we are.
The Act that established the Rural Electrification Agency in 2005 also created the Rural Electrification Fund through which the agency can source for funds in an innovative and sustainable way. What we did was to operationalize the Rural Electrification Fund which was in comatose for twelve years before we came on board.
To be frank, I acknowledge that apart from data and planning, paucity of funds is a major challenge of the power sector, but we are tackling that challenge having activated the Rural Electrification Fund.
Within six months of our resumption of office, we developed operational guidelines and presented it to the Board and our parent Ministry for approval, and we got the approvals. In all cases, we adhered strictly to due process, we further presented the operational guidelines to the World Bank and the DFIs and the African Development Bank among others, and we also got their nod. This done, we went ahead to operationalize the Fund.
What difference did the operationalization of the Rural Electrification Fund make in your ability to achieve mandate success?
Great difference! We were able to liquidate a seed fund of about two billion naira which had been there since about 2005/2006. With this, we executed electrification projects that affected some twenty-five thousand households.
With the seed fund, the REA executed twelve mini-grid projects, some of which have been completed. We are also deploying about 19,130 Solar Home Systems.
What do you think the administration is doing differently, and how is it paying off?
This administration has demonstrated the fact that the Rural Electrification Fund can work by operationalizing it. The Fund is not totally based on grants, rather it is a capital subsidy. Only a portion of the required capital is released to qualified bidders who have satisfied the requirements of the procurement process. The executors of the projects are also required to bring-in their monies as equity. As a result, the success of the projects are guaranteed because investors would not want their funds to go down the drain.
By so doing, we are able to prevent the pitfalls of the past administrations where government provides all the money needed for projects. Our strategy is to ensure that project developers also have something to lose if a project fails. As such, they would not let the project fail because they don’t want to lose their investments. This is one of the strategies of the government that is different from past administrations.
We were also given marching orders to complete all ongoing projects and pay all outstanding debts. I am pleased to share the good news that the MD having embarked on painstaking job of verifying every claim and ongoing project over the last few months, has approved the payment of all verified outstanding debts from 1993 to 2016. This had never been done before.
We have also attracted a lot of interests from international development partners and investors such as the World Bank, African Development Bank, GIZ and a host of others, who we are jointly developing projects and programmes with. In the past, the agency only relied on government funding for projects and had no programmes.
Would you say the PPP is effective in the power sector?
Yes. We had always known this is the only sustainable way to go. We have tried it, and we will sustain the model for future programmes.
What volume of funds has the REA under your administration received so far?
Due to the tremendous amount of work we have put in, and the transparency in fund management and processes guaranteed by the various policies and regulations in place, the REA has created a credible brand that earned the confidence of the World Bank, African Development Bank, GIZ, DFID, USAID and other lenders. We have attracted over $560 million so far for some of our programmes. We are in discussion with a few more partners to unlock more funding,
Can you be more explicit on the particular projects for which the World Bank is providing the funds?
We initiated a new programme called the Energizing Education Programme, where Thirty-seven Universities and seven University Teaching Hospitals will benefit from REA’s Solar Hybrid and Gas fired projects, towards 24 hours electricity supply.
The REA is also building training centers for female engineers in order to give them hands-on experience in the renewable energy sector. In addition to that, we are also providing streetlights to illuminate the universities to improve safety at night.
A point of note is that this is made possible because the President is committed, and he did not pay lip service to the sector. He is committed to youth development. REA’s “Energizing Education” is a program of the agency that targets the youth.
What strategies are in place to exploit the potentials of the power sector for economic development?
Apart from “Energizing Education,” there is also “Energizing Economies,” a programme that targets the large markets. REA is providing between eight to ten megawatts of thermal projects to the Ariaria market in Aba, and we are also metering about 37,000 shops in the market. That would be the largest in Africa, and I would say it is highly commendable.
We are providing sustainable electricity to Ariaria market through partnership with the private sector. A point of note is that private sector operators have become confident because the rules of the game have been clearly spelt out, and the investment climate is friendly and the policies protect their investments.
REA’s “Energizing Economies” will impact over eighty market communities in Nigeria. The Sabon-Gari market in Kano has been electrified and the progress continues. Wuse market, Abuja is also one of the large markets that will benefit from REA’s “Energizing Economies” programme, among others.