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Senegal | Aug-16 | Consistent Energy : Water, Food & Energy Nexus
1. Water, Food & Energy Nexus
Lessons from West Africa
Segun Adaju
CEO, Consistent Energy
Lagos Nigeria
2. Introduction
• Company started operations in 2012 as BlueOcean Energy
distributing pico solar technologies
• Refocused and restructured in 2015 to provide stand-alone, roof
top solar energy for productive uses
• Vision is to be the topmost solar finance and leasing company for
productive use in the region
• Business model is providing energy form SMEs on a rent-to-own or
Pay-As-You-Go basis for productive uses
• Strategic intent is creating access to clean energy for 1 million
small businesses by year 2030 in contribution to Goal 7 of the SDGs
• Provided solar energy for barber shops, mobile phone charging,
solar drying, solar irrigation for agriculture etc
3. The Problem
• 55% of the population in Nigeria have no access
to the grid
• 96% of businesses are micro, small and medium
enterprises yet account for only 46% of
National GDP due to energy challenges
• Small businesses are the worse hit. Spend 40%
of expenditure on energy
• SMEs resort to inefficient, expensive and
polluting generators to power business
• Cost of inefficient fossil fuel on the increase
with removal of subsidy
• Low capacity to finance initial capital outlay of
adopting solar
• Limited access to finance and high cost of solar
energy technologies are the leading constraint
to adoption
4. MSMEs In Nigeria
At 96%
More than 9 out of 10
Nigerian Businesses are
MSMEs
MSMEs make up
90%
of Manufacturing and
Industrial Sectors
98%
of MSMEs are
Micro
MSMEs make up
46%
of National GDP
5. Energy Access and MSMEs
Percentage of MSMEs Utilising Alternative Sources of Power – in the form
of diesel and petrol electricity generators
(NBS & SMEDAN, 2010: Survey Report on MSMEs in Nigeria)
13.00%
40.00%
35.00%
12.00%
Alternative Power Usage by MSMEs
(in hours per day)
n/a
1-5 hrs
6-10 hrs
16-20 hrs
6. Energy Access and
MSMEs
‘I beta pass my neighbour’ – a necessary evil
Courtesy of: Oluwatobi Bolashodun
N796.4b
spent on
fuelling
generators
annually as of
2012
As of 2014 that
figure could be as
high as
N3.5trillion
9. The Solutions
• Distributed Renewable Energy (DRE)
approach through stand-alone, roof top
Pay-As-You-Go Solar PV
• Creating access to energy for productive
use through rent-to-own or leasing
mechanism
• This allows rapid uptake of solar as
beneficiaries can adopt with a low entry
down payment and instalmental payments
• Adopting digital finance via mobile money
to de-risk investments with over 100%
mobile penetration
• Increases productivity, creates more
employment and reduces negative impact
on climate change
• Pay-As-You-Go solar creates more
opportunity for small businesses as data
collection aids further opportunities
MSMEs IN NIGERIA
MSMEs play a crucial role in supporting the growth of the Nigerian economy
More than 9 out of 10 businesses in Nigeria are MSMEs
MSMEs account for 96% of Nigerian businesses (appx 90% of the manufacturing and industrial sectors)
As of 2012, 98% of MSMEs are Micro
MSMEs contribute to appx 46% of the (GDP)
ENERGY ACCESS AND MSMEs
Main Challenges facing MSMEs: - Poor financial and investment support - High cost of entry into the formal sector (primarily for Micro enterprises) - Poor access to skilled workforce
- Poor infrastructure
Efforts have been devoted to Financial Support and the issue of MSMEs economic growth is almost treated in isolation but businesses exist in the context of grossly inadequate which still remains a key challenge
Energy access stats from National Bureau of Statistics and SME Development Agency of Nigeria Survey Report on MSMEs in Nigeria
ENERGY ACCESS AND MSMEs
Use of I betta pass my neighbour – Noise and Air pollution
Nigerians spend approximately N796.4billion fuelling generator sets annually (NERC, 2012), this figure is equivalent to the entire federal capital works budget for 2009
More recent studies by the GIZ place that figure at N3.5trillion per year (GIZ, 2014).
RENEWABLES IN NIGERIA
Barriers to uptake
INTRODUCTION
The point to be made is that energy is simply a means and not an end in itself
In the context of the commercial use of energy, expenses towards energy access are an investment
Aim of the Group: Focus on MSMEs, a group that would benefit from insular renewable energy solutions but often do not have substantial amounts of funding to invest in their own installations.
CASE STUDY 1
Image from Solar Powered Salon in Kenya : “Elizabeth and her first customer with the new power are both overjoyed to be using clean solar energy rather than the noisy generator pictured in the back corner”