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Lagos seeks alternative to bridge energy supply deficit from National grid

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Lagos State on Tuesday said it is committed to addressing the energy supply deficit from National Grid in the state with consideration for potential solutions, according to the state commissioner for Energy and Mineral Resources, alternative Olalere Odusote.

Odusote, in a remark at a joint conference with the World Bank to discuss the framework for the implementation of DPV in Lagos State, said one of the potential solutions being considered by the state is the use of rooftop solar.

The commissioner noted that Lagos State is committed to addressing the demand – grid supply deficit in the State which is currently estimated at 33-43 TWh (83 per cent of total demand)- and one of the potential solutions being considered by the state is the use of rooftop solar.

The World Bank Acting Regional Director for Infrastructure, West and Central Africa, Ashish Khanna in his remarks stated that “there is a unique opportunity for Lagos to lead the way for solar adoption in Nigeria and Sub-Saharan Africa by demonstrating a model for distributed PV in urban Africa that provides affordable and reliable electricity”.

The discussion centred on the financing structure, operating framework and the institutional arrangement required to achieve the state’s ambition.  

Participants considered LASG’s ambition achievable and confirmed their readiness to work with the state to realize this ambition.

The funding requirement for the deployment of about 500MW of solar DPV in the next five years is estimated at $350 – $700 million. It is envisioned that this would be financed through a mix of grants, equity, and concessionary debt designed specifically for various consumer segments. Additionally, various risk mitigation instruments will also be explored.

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The financing would be provided by international development finance institutions, equity investors and commercial lenders.

The program will adopt two business models – a developer-owned model for commercial and industrial customers and user-owned model for the residential, MSME and public sector customers.

To address the current challenge of fragmented demand in the solar ecosystem, a number of aggregation mechanisms would be introduced by demand aggregators to create scale within the industry.

Technical assistance would also be provided for capacity development for stakeholders across the ecosystem as well as targeted consumer awareness campaigns to enable effective roll-out for end-users.

The objective of the session was to discuss the pathways for realizing the Lagos state ambition of achieving 1GW of installed PV capacity by 2030 with a proposed mix of 60% commercial and industrial, 20% residential and 20% government owned buildings.

The event was attended by key actors across the industry value chain comprising over 70 participants including PV developers, solar aggregators, commercial banks, development finance institutions, and Fintechs among others.  

In his closing remark, Odusote noted that the ministry would incorporate the feedback from the stakeholders and leverage the same in developing a detailed project design document to guide the project implementation.

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