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Sanusi Ohiare

Executive Director

Rural Electrification Fund

June 10, 2021
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Ep 28: Sanusi Ohiare - Executive Director, Rural Electrification Fund
00:00 / 01:04

Adam Zuckerman
Welcome back to the next episode of the Energy Impact Podcast. Today we are here with the Executive Director of Nigeria's Rural Electrification Fund. Sanusi, Dr. Sanusi, it is fantastic to have you here. Over 10 years of experience advising public and private entities on electricity access planning, mini grid regulations, renewable energy policies and data management systems for the unelectrified communities in Nigeria. It's great to have you here today.

Sanusi Ohiare
Thank you very much, Adam. It's good to be here.

Adam Zuckerman
You're the youngest executive director of Nigeria's rural electrification fund. It's a position that you were appointed to by President Buhari in 2017 and your work has helped to increase private sector participation and involvement in rural electrification and renewable energy. You're a 2017 Mandela Washington fellow. In 2020, you were named the Young Leader of the Year award at the African Power, Water and Energy Industry Awards. It's fantastic to have you here. How did you get your start in energy? Is this a passion that you've always had?

Sanusi Ohiare
Yeah, Adam. Most Nigerians grew up in a community where there's just a lack of access to electricity for most parts of the country. I think every Nigerian basically has passion for that sector, because we keep - I mean, right from when you're in primary, secondary school - we keep hearing from our teachers that for the country to move forward and for the economy to improve and for manufacturing and industries to rise up, you need steady, affordable electricity supply. We all grew up just wondering why it's so difficult for us to achieve this. I took it a notch higher, to not just wonder, but look for solutions as to how we can actually solve the energy access challenge. That led me to walk within the space, as well as carry out various kinds of research, from my BSc to my Master’s to my PhD levels, just wondering and researching, looking for solutions. And then I've been lucky enough to not just end up research level, but also work with various stakeholders in terms of putting policies or regulations in place. Now, being lucky and privileged to be appointed here to implement the trajectory has been a foolproof one, from research all the way to implementing it now, which is what I'm currently doing anyways. I think it isn't everybody that has that luck, to have that kind of trajectory, to work in areas that they are passionate about, and across the sphere of the sector. So, I think I count myself lucky to be able to grow in this sector from that level, to where I am now,

Adam Zuckerman
Has it always been a goal of yours to focus on rural electrification? Did you ever consider other avenues like being an engineer or something else? An architect? Or was a PhD in economics always what was on your target list?

Sanusi Ohiare
To be honest, right from when I was in secondary school - that's high school - I had always known that I, at some point, would want to reach the pinnacle of my education. That's gaining a PhD. I don't know why that was in my head for some weird reason. But right from secondary school, my friends had already started calling me doctor and that's from the kind of goals I used to share with them that, Oh, I'm gonna have my PhD. But in terms of what I wanted it to be in, I wasn't sure until I got to university. Although, while I was in secondary school, my dad wanted me to study engineering because he had a construction company, so he wanted me to come work for him. But I wasn't very good at the sciences. After my first term, my Senior Secondary One class, so I had to leave. I went to the social sciences class. I mean, there's a way to divide all of the classes based on what you hope to study. I was doing fairly well and I loved the economics. I knew I was going to study economics at my undergrad. But while studying economics, I did a course in energy, economics that really sparked my interest in the sector. So, I started to look at the sector deeper and I realized that though, generally, the sector in Nigeria had challenges where a lot of work was already being done on the on-grid side - so, those on the national grid and all of the activities from generation of power to transmission to distribution to households, - we already had a lot of people focusing on that. But what was lacking then was almost half of the population of Nigeria, who were under the Rural Electrification, or if you like, on the South. Totally close to, we looked at it then, close to 50%, which is translating to about 80 million Nigerians, were not having as much attention as those that were on the grid. And I felt that was challenging, because if you had almost equal numbers of citizens, one gaining all of the attention and all of the funding, and the other not really getting much attention, I felt there was a problem. So, I needed to probe deeper and see why people were not interested in going to the area and see what we could do, to get not just government interested in in the area, because it was very important as a large chunk of those are the bottom of the pyramid population of Nigeria fell under that category. So, I was interested for that reason. Yeah, I had to do my Master's in Energy Finance. And of course, while doing my research, I realized that financing was the major challenge, alongside other issues of planning policies, regulations - which I knew was within the purview of government to quickly put together - but financing wasn't only going to fall on the government because we needed all stakeholders to come together to look at how we could solve this energy access challenge, especially in the rural communities. At that point, I knew at that point in my university, I knew I wanted to do rural electrification. And I tell you what, Adam, while I was applying for universities to do my Master's, for instance, while I was applying to do my BSc at my undergrad level, I applied to universities - and I mean, economics is everywhere - I applied to universities in the US, I got admitted in a couple, but I wasn't able to resume because I didn't get this then. So, I stayed back in Nigeria to do my BSc. For the choice of my MSc, it was a very deliberate one. It was driven by the course I wanted to study. I needed to go to an energy school, a multidisciplinary energy school that had everything from policy to law, energy, generally, to financing, all of those things for relative education. And when I searched, there was only one university I found at that at that time, which was in Scotland, University of Dundee. I went there, even though it was very cold. Well, I had to go there, because I was really interested in that course and then I got admitted, and the rest is history.

Adam Zuckerman
Let's put that into context. The country of Nigeria itself is located in West Africa and has several countries that border from Niger to Chad, Cameroon, Benin. It's the Southern coast of the Gulf of Guinea and the country itself is the seventh most populous in the world. It has just over 200 million people. It's the largest economy in Africa, the 26th largest in the world, and it even has the largest city in Africa, which is Lagos. So, you went away. You went to Scotland for school, you came back. Did you just jump immediately into the Nigerian Rural Electrification Agency? Or was there a journey after your PhD that led you to where you are today?

Sanusi Ohiare
There was a bit of journey and this is a good question, Adam. This would speak to especially those that are in diaspora, Nigerians in diaspora, that are looking to come back to Nigeria. It's not automatic, right, you have to make a conscious decision to want to come back to make an impact somewhere. It doesn't necessarily have to be my sector. I mean, I chose my sector because that's where I have capacity. You need to be ready to understand the system. You need to be able to grow within the system and eventually, maybe you would prosper. So, I was driven by that passion to come back. Even before I finished my PhD, I had to take a field study for my research. I went to Ghana to do my field work. I had to learn how to use some software for the modeling that I was doing for my research, my PhD this time, and upon rounding out that, I had to come back to Nigeria. Then I got an internship position with the Nigerian Bulk Electricity Trading. I had to do that because I needed to be within the space, practically on ground, because my topic was looking at Nigeria, so I could also interview a couple of stakeholders, which was part of my work, and then finish up writing and submit. I was given that permission to stay back. And then even before the advent of COVID, we're doing a lot of video calls, virtual meetings with my supervisors, and the rest of them. It's helped me to really understand the sector. So, I stayed here for one year, until I finished my PhD and defended. And when I came back, I got a job with with the German International Cooperation Agency called the GIZ. It's similar to the USAID of America or the DFID of UK. I worked on the Nigerian Energy Support Programme and this program was providing technical support to the Nigerian government, especially the power sector, various agencies within the power sector, where they basically tried to put all of the frameworks in place, so the policies and regulations and all of those that had to do with rural electrification. In my case, I was in charge of rural electrication planning, and then database management. We needed to understand - which is something else we did on my PhD level - we needed to understand where within Nigeria are those communities that don't have access to electricity. Before the research, there was no such thing. We needed to know where the grid, I mean where the national grid stopped, and where it would make sense for us to extend the national grid to other villages, or where it makes sense for us to extend standalone systems like mini grids and solar systems for hard to reach communities. All of this database, in a way, we were able to fine tune with the GIZ were I worked, and then we provided a platform - which the country still uses to date, although we are trying to update it - in terms of how to move and plan for rural electrification. It was a lot of work. I was appointed from that program to come to the Rural Electrification Fund here to operationalize the fund. The Rural Electrification Fund is under the Rural Electrification Agency, which has the mandate to provide and promote coordinated electrification across Nigeria.

Adam Zuckerman
Let's talk about that for a bit. The country itself is fairly sizable. There are just over 920,000 square kilometers, which makes it the 33rd largest country in the world. And if the vast majority of people are living in urban settings, there's a great swath of land that the REA, the Rural Electrification Agency, actually focuses on. Can you give us a bit of context of what REA is, what it's focusing on, where people are located, how spread out they are? What's the challenge that the organization is really trying to tackle?

Sanusi Ohiare
Let me just give you a bit of background. In 2005, the Electric Power Sector Reform Act of Nigeria was signed into law. It's an act that sought to restructure the power sector. The power sector used to be a vertically integrated power sector where government was in charge of electricity generation, transmission, distribution on the big body called Nigerian Electric Power Authority. But obviously, for so many reasons, inefficiency, corruption, the fact that we were just not meeting our goals, so that body wasn't meeting the the requisite targets of government in terms of scaling up access to electricity, and then it was realized that the sector needed to be decentralized and unbundled, and also moved towards the regulated economy, because it was under a complete monopoly before. So, this act of 2005 created all the necessary sort of agencies and guide towards moving into a private sector led or driven and regulated economy. Now we now have generation companies who are regulated and been unbundled, several of them. We have a transmission company, which is still one single body under government. Generation is now under private sector hands. Then we have the distribution companies as well, who are also were unbundled and sold to private individuals. So, Rural Electrification was still a big question mark, because you couldn't leave the rural people at the mercy of the distribution companies, because obviously, it will take them a long time before they would even consider doing that because their motive is profit. So, the government needed to take care of rural electrification. That's what the structure is like now. For me, the Rural Electrification Agency was created to move away from that government providing EPC 100% without having a sustainability plan, to more of working with private developers. That's why we have the fund, because the fund is there to support private public partnerships, towards achieving goals, and this solves two problems. One, you have value for money. Two, you're sure that the projects will be sustained, because the private guys also bring it in, you could see too much whatever fund you bring in. They implemented projects under your supervision and they operate and maintain it over a long term, say 10, 15, 20 years. For us, this is a more sustainable way to go, so that's what the agency is there to do. However, you'll notice that even within areas where the grid serves, they're still epileptic supply. We're not just dealing with unelectrified communities, or unserved communities. We're also dealing now having to deal with underserved communities. In the true sense of the Rural Electrification Agency, we're not just focusing on the rural, because of the huge problems we still have within even the urban areas. For instance, we're intervening in the universities, because universities, especially government universities, are big. For government universities, we are providing solar electricity to about seven or eight universities and several university teaching hospitals at the moment. These are huge universities that we're providing megawatt-scale projects for. This has been also been supported by the African Development Bank and then, yeah, we're still doing a lot of the rural electrification projects that we need to do, and we do this more through clean energy. I'm talking about renewable energy, such as solar, largely solar, because Nigeria, as you know, Sub Saharan Africa, we are very prolific when it comes to solar technology and resources. It's easy for us to deploy solar, but we are also open and exploring other technologies that has to do biomass and small hydro and all those. It's limitless in terms of what is possible for us to provide electricity to our people. The scale of the challenge is huge. The scale is huge, but we have been really pushing because we know we can't do it alone as government pushes for private sector involvement. And while the rest goes so fast, it's very good as well. It's just a matter of time before we're able to achieve the target of electrifying all those that currently don't have access to electricity in Nigeria.

Adam Zuckerman
It's almost as if the fund should be the under electrified fund instead of just the rural.

Sanusi Ohiare
Exactly.

Adam Zuckerman
So, two weeks ago, there was a post that shared that you signed another grant agreement with another private developer, which brought the performance-based grants to 12 developers with signed agreements covering 87 grids,, or 87 sites, rather, How do these grids improve energy access across the nation? What are they actually funding? Can you describe the mechanism and the projects?

Sanusi Ohiare
Okay, so if you have capital subsidies. As you know, the initial outlay, capital outlay for especially projects that has to do with renewable energy are usually huge, the upfront costs. If you allow the private sector to go outsource money at competing rates from commercial bonds or bring in the equity to 100% to develop these projects, you immediately face some challenges. One, they need to cover their cost over the shortest period of time. If the money is coming from this source, as I just mentioned, it's difficult for them to do that, and nobody's going to do that, that's fine. Two, the tariffs would be high and it would not be affordable for rural people to consume this electricity generator. So, this is where the grant comes. It's called capital subsidies because you are subsidizing the initial capital outlay of the project in such a way that it makes it flexible for the developer to come in and still see it as a profitable venture, while also providing this electricity to the rural people at a reasonable and affordable cost, based on these grants that has been provided. If you take away the grants, then you see that the tariffs will be very high and they will not be able to recoup their investments within this short time. For us, we are there to balance things and make it a win-win situation, allow the developer to still have a fair return, and then protect the consumers from paying exorbitant prices. That's what the grants help with. And it's important at this stage of our development to have this sort of fund blend, research and just generally stakeholders, concentration, even with World Bank, you know that you need to blend funds for rural electrification, because it's a very delicate sector, where if you do not get the the blending of the fund right, then you tend to not achieve what you need to achieve. There's a role for government to come in and we want international development agencies to come in and provide some sort of concessionary loans or even grants. Then there's the role for the private sector to come in as well. Maybe through equity, or getting debt resources from banks, to also blend what we have selected projects on the ground. For us in government, we see this as a good situation because we are not spending 100% of the funds to implement the project, we're probably spending half of it. And then we are not burdened with the responsibility of staying there on-site to operate and maintain. We have our private sector guys that help us to do that. It allows us to quickly move to other places, so we restrict ourselves to just regulation and more supervision and monitoring to ensure that things are going well. We also won't overstretch our resources. So, this is just a general idea of how we hope to move. If you know Nigeria, we are looking at thousands of sites that we need to electrify. These are huge, we cannot be in every place all the time. This is a good way for us to move. It also helps to generate employment and improve incomes within rural communities, because the more of these smaller electrification companies or developers we have, the more jobs you are creating. The more communities they go into, by providing electricity for productive users and also for households. You see that businesses are booming and their incomes are enhanced. For us, it's an overall development target that needs to be met to this model and it's been working very well for us.

Adam Zuckerman
Is it more challenging to develop in certain areas of the country than others? The country's a federal republic. It has 36 various states, I imagine that there are local jurisdictions and regulations within those jurisdictions that can pose interesting and unique challenges. Have you found that some areas are rapid to deploy in versus very slow for others? And if so why?

Sanusi Ohiare
In terms of the regulations, local regulations, I think we're all aligned. As you know, Nigeria has a three-tiered government. We have the federal, state and local governments. And then we have various kinds of lists when it comes to those words. We have the exclusive list, we have the concurrent list, electricity happens to be under the residual list. I think electricity generation has to be on the concurrent or residual list, which means that everybody can actually generate electricity and distribute However, there's a clause by the regulator that if there is no local regulation, then the federal one would automatically supersede or would be adopted. If the local one is clashing with the federal, that's also a problem. I think the federal would subsist. So, in terms of deployment, we don't have a problem. When it comes to regulation at that defendable to slow things down. If anything, everyone is welcoming and embraces any project that has to do with electrification all across the country. Once you would see challenges that has to do with topography. For instance, if you go to the south outer parts, you have a lot of water bodies. It is difficult to move your equipment to the rural communities, because you need to go by boats and sometimes it's raining throughout the year. You don't get as much energy yield as you will get in the northern part. And one of that is maybe land issues. Yeah, land issues. In some states, it's more organized, this is a one stop shop where you were just get all the necessary permits and title deeds, and all of this that you need. In other places, you need to go to individual offices for you to get this. But ultimately, I think we are all aligned when it comes to electrifying our communities, at the federal, state and local level. So, all this deviation, I think I just lead to things that has to do with actual implementation on ground, but not in deliberate in terms of having different regulations. That tends to slow things down.

Adam Zuckerman
What is eligible for a grant then? Is it companies that are focused on generation? Is it mini grids or hybrid mini grids? Is it everything under the sun and you choose on a case by case basis? Who can apply? And what's the process?

Sanusi Ohiare
Well, we have our criteria. Usually, we would announce what the grant is about, if it's for mini grids and solar home systems, or grid essential with states. With states, it's outrightly, because that's what the Procurement Law of Nigeria provides for. It should be expressly stated what sort of technologies are encouraged and which ones are not and what you need to do. We have statutory requirements. So, for instance, you need to pay your taxes, you need to be registered with the Corporate Affairs Commission of Nigeria. You need to be paying all the necessary, just some little funds that you need to be paying to update your company and your papers and have already years of experience. Most importantly, you need to have demonstrated this experience by showing us some of the projects that you've done, which of course, we're gonna take a look and see if it fits in, and then you're shortlisted. So, anybody that meets the criteria, really, can apply and then we do our evaluation. Based on our scoring matrixes, we're able to pick those common tops and actually get approval from the board to give them the grants.

Adam Zuckerman
In terms of generation projects. What size are we talking about? Is this kilowatt? Is this multi megawatt? Are there any areas of the country that need more than 10 megawatts at once that you guys are focused on?

Sanusi Ohiare
We have various programs, but ultimately, anything below one megawatt for rural communities is a space that we typically play. But you look at our university projects. Those were on the megawatt scale, because the universities are huge. I think we have one that is almost eight point something megawatts, that's about the biggest. We have programs, local areas, the coordinating agency, and look at different targeted programs on the area for different programs right. And if you look at the way we are structured, we are we are supposed to coordinate the space, so we don't limit ourselves to those doing- although you see that anything typically below one megawatt is where we play. However, there are special interventional programs that may be based on the interest of the government they can access to implement, like the university program. If you look at the university projects, most of them are typically megawatts, too. We have up to eight megawatts, but these are for… So, depending on which program, we could have many great people have given us smaller solar home systems of 30 watts, 50 watts, 150 watts, and then we have kilowatts program projects for mini grids, so 100 kilowatts, 150, and then we have megawatt-scale as well for universities and markets. So, it depends on the program. We can go as high as megawatts scale.

Adam Zuckerman
Is the government setting metrics and goals that state, We want the entire country to be electricity accessible by "x" date? Or is a point? What is that scale right now?

Sanusi Ohiare
We're looking at 2030, in line with the UN, United Nations, Sustainable Energy For All, goal. I think we're all looking at 2030 to see how we can provide 100% access to electricity for all of our rural communities. That's what we are working towards.

Adam Zuckerman
What is the biggest challenge to reaching the goal? Is it time? Is it human capital and human resources? What is the one thing if you said, this can be my silver bullet to make sure that we hit 2030?

Sanusi Ohiare
Resources, resources. We need capital, we don't have enough. Because of the scale of the problem, we don't have enough funds. To be honest, it's been a long time coming for us in Nigeria, because we've demonstrated various kinds of pilots. We've tried various technologies. We have various kinds of plans and policies and regulations in place. We've built capacity over the years. What we need now is, and we're implementing already, so force implements at a faster rate. We need more money to spread across the country, because whatever we have now is, if you look at it compared to what we need to achieve, it's high enough. For me, if I would mention one thing, I would say capital, we need more capital.

Adam Zuckerman
Oftentimes, when we have conversations like these, it's very high level of granularity. We're trying to do this to electrify a country. Let's focus on the really nitty gritty specifics. Do you have any stories of successes that are "yay" you've had, that you go, this is the direct impact of what we've done and this is what makes me smile at night when I'm going to sleep.

Sanusi Ohiare
What keeps me awake at night is constantly looking out, because my job is responsible for the agency to do its job, right? So, how do I get more money for us to achieve our goals? Because every day, we get requests from communities saying, Oh, please, we heard you've done this for this community, when are you going to come do this for us? A lot of requests. We have an idea where all of these communities are from our plants. Now, what makes me happy is, anytime we connect a community, most of these communities - you'll be surprised, maybe when you come to Nigeria I'll take you to a few of them-

Adam Zuckerman
Yeah, please.

Sanusi Ohiare
-tens and tens of kilometers away from- So, you're looking at- Okay, let me give you a typical example. There are the states in the southwest of Nigeria, urban states, and there are states, just the forest reserves, where you have to drive like 60 kilometers into the forest reserve. So, you're driving in - I don't know if you've been to very typical forests with bad roads. The roads are hard. It's just, you're going on down very, very bad roads and you have to cross terrible bridges. Then you drive for that long, and you get to a community where you see people have been living for upwards of 100 years, and they've never had electricity. You can just imagine the day you connect power to this community and then you come in, and you bring in the entire world to come and commission this project, you're bringing in the state governments, you're bringing in federal governments, you're bringing in international observers, and they are seeing these people for the first time. You can imagine the kind of the excitement. Usually, they come out with the drums and the sing and dance, and everyone is happy. We commission and we leave them with the private developers to continue. We have our contacts, anytime they have issues, they reach out to us. We have so many, and those are the typical villages that we go to. You see women who are now happy because they don't need to travel miles or kilometers to go get water, clean water, because with this power coming, they now have… They can just pump water and have water. You see students are happy because they don't need to suffer at night using candles, candlelight to study. They now have lights in their schools, they can stay longer hours. You see businesses are happy because they don't need to use diesel generators, or the gasoline generators in order to power their businesses. They now have clean energy. They don't need to worry about the sound pollution and the air pollution coming out from all this unclean energy. It's just, for me, it's not just a job, it's a passion. Because there is no amount of salary that justifies the fulfillment that you get when you go to give electricity to these communities, and they're truly happy and you can feel it. You know that the work that you do is important. It's an impact, social impact, but the impact is really high, has very high impact in terms of delivery, and what you do. This example is just all over the country. You go to my state, Kogi state, where for 100 years, my ancestral home, they've never had electricity until we provided them mini grids, as well. And these mini grids are very easy to deploy, especially for hard to reach communities, like I've mentioned. You go to Gombe state in the northeast, some of these northeastern states have already been ravaged with terrorist activities, so most communities have moved to IDPs. When you go there, you give them electricity, at least to make the state better and easier. You see the gratitude on the faces of these people. Across Nigeria, from North to South, from East to West, is the same story, honestly, and for me, that's the best part of the job.

Adam Zuckerman
It sounds unbelievably fulfilling and rewarding. I don't think that we can end this on a better note, Dr. Sanusi Ohiare, Executive Director of the Rural Electrification Funds in Nigeria, thank you so much for joining today for the Energy Impact Project.

Sanusi Ohiare
Thank you for having me, Adam.

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