Ajibola Akindele: Nigeria Must Leverage Energy Mix to Solve Its Energy Deficit

Ajibola Akindele, MFR, is the Country President of Schneider Electric West Africa. With over a decade of experience in Africa’s energy sector, Ajibola is deploying best-in-class technology solutions to advance the region’s energy, specializing in renewable energy, oil and gas, infrastructure development, and utilities.

As Country President of Schneider Electric West Africa, he drives transformative initiatives, focusing on electrification, automation and control, and sustainable development. With expertise in power transmission, distribution, and solar energy, Ajibola has been instrumental in expanding electricity access in rural Nigeria.

His expertise extends to business development, government relations, and mergers & acquisitions, enhancing Schneider Electric’s regional impact. Committed to technological innovation and collaboration, Ajibola champions socio-economic progress and environmental sustainability in West Africa, positioning Schneider Electric as a key player in Africa’s energy transition.

In this report, he highlights the need why Nigeria must embrace energy mix to reduce wastage of energy transmission in the sector, while increasing investment in the sector by $3m in the next 15 years to become an industrialized nation. Oluchi Chibuzor present excerpt.

Nigeria is still grappling with poor and inconsistent electricity supply despite billions of dollars invested in the sector, how do you think this can be addressed?

Yes, a few billions have been invested in the sector but if you look at the history of the power sector in Nigeria, what you find out is that we had a 20-year period where there was very limited investment in the sector. From the mid-80s literally to the early 2000s, there was very little investment in the sector, and this is why we are grappling with a lack of adequate power supply because we had so many years where we under-invested in the sector, and we are now just beginning to invest.

Now, if you look at the context of where we are now, we will need about $3 billion of investment annually over the next 15 years to have what will be required to call Nigeria an industrialized nation. So yes, we have invested billions of dollars, but what we have done is certainly not enough, and a lot more investment needs to come into the sector.

Secondly, we must look at regulation. We must look at governance. We must look at developing people and developing skills acquisition within the sector because it’s not about throwing money. These are long-term projects that need to be viewed from a holistic perspective. Let’s look at the risk. How do you mitigate against the risk? What kind of controls do you have, and what kind of instruments can you use to mitigate the risk in the long term?

A lot of regulatory and advisory work still needs to be done and obviously, it must be a collaboration between the public sector, the private sector, and financing institutions.

The country faces daily Rural-urban migration, do you think electrification of the rural areas can curtail it?

Without a doubt, it will curtail it. If you look at any country or any city within countries, the level of development is directly proportional to the amount of power generation they have. It’s linear. The more electricity you have, the more power you generate, the increase in the development rate of your city.

Why are people moving from rural areas to urban areas? They are in search of a better life. They are in search of more job opportunities. They are in search of better healthcare and education. And one of the fundamental reasons why they don’t have that in the rural areas is lack of power. When there is no power, it kills economic life. People in rural areas don’t even have what is required to have economic activities and sustain themselves, which is the reason for their migration into urban areas.

Although, the urban areas are not particularly juicy as things are a lot more expensive: the cost of living is higher, amongst other social and economic challenges. But if we can empower people in rural areas, give them the right amount of power, and create economic activities, we will see a decrease in urban migration.

This is what you find in developed countries. Where there is access to power, there is a balance between the rural and the urban areas, because wherever they are, they can make a livelihood.

Do you think an energy-mix can be a solution to Nigeria’s rural electrification problem?

Absolutely. What we have today is not enough. We have a situation where 75% to 80% of all the power is generated in a certain part of the country, Niger Delta.

The power is transmitted over long transmission lines to other areas of the country, the Northwest, and the Northeast, where a lot of it is lost in transmission. Technically, we are wasting energy generating power from one side of the country and transporting it to other parts of the country.

There is a lot of waste. Sometimes, there is theft, as we know. What we should be looking to do is bring power nearer to the areas of consumption and one of the ways we can achieve this is through the energy-mix. Now, 75% of our generation is by gas, 25% is by hydro, and most of our hydro, practically all of it is in one state, in Niger state. What happens to the rest of the country?

We have other areas or other energy sources that we can look at, principally solar. For areas, especially in the north, where it’s far from the areas of generation, solar could be an alternative where we can then bring in the generating stations closer to the point of use, which helps to reduce wastages and loses in transmission.

Yes, an energy mix can be an effective solution to this.

Is Schneider Electric playing any role in accelerating rural electrification in Nigeria? Who are you partnering with?

Schneider Electric is playing a very major role in accelerating rural electrification in Nigeria. In Nigeria, first, I would say we have over 200 employees in this country, and a lot of these employees work specifically in the energy sector, particularly the power side of the energy sector. We work across the entire value chain from generation to transmission to even distribution. But when you are talking specifically about rural electrification, I would say that the first microgrid project done in Nigeria had Schneider products in it.

We have been in this business for a long time, working on microgrids, working on mini grids, partnering with the likes of rural electrification agencies, donor financiers like the AFD and the French treasury, NGOs, and even local organizations. We have invested in an Australian Cambodian company called Okra Solar.

Okra closed new fundraising in 2023, confirming the feasibility of the business model and establishing a strong deployment in Nigeria and Haiti. Their mesh grid technology drastically reduces installation costs and enables access to electricity in off-grid communities.

Schneider Electric is providing access to the deployment of energy-efficient solutions and technologies. For example, the Mobiya Lite solution was distributed in partnership with ADEME and Solar Sister to invest in local women entrepreneurs in the last mile communities to help start, grow, and sustain successful clean energy businesses.

Recently, we worked with the Federal Nigeria Society for the Blind (FNSB), where we installed Schneider Electric’s solar solutions to take care of their power requirements.

We have many partners we are working with, and we are proud of our achievements particularly in the rural electrification space.

What strategies are you currently deploying to ensure rural electrification in Nigeria?

When you think of strategy, again, you must think of who we are. We are an Original Equipment Manufacturer (OEM). We are deploying both upgrade and mini-grid solutions powered by renewable energy sources such as solar and a hybrid system of these solutions.

One of it is the Villaya Flex. The Villaya Flex is a packaged microgrid that can be deployed off-grid, specifically for off-grid solutions in modules of 50 kilowatts. A module is 50 kilowatts and then this can be scaled in multiples, and you can have it up to one megawatt.

We have carried out a few CSR projects with some NGOs where we deploy these lights and smaller solutions, for the benefit of individuals and homes.

From what Schneider Electric is doing currently in Nigeria, what projections do you have on when Nigeria’s rural communities will be electrified?

There is no right answer to that. It’s all about how desperate you are to want to see this happen. Some countries have done it in record time. I always talk about Egypt. In Egypt, there is a combination of rural and urban, but we can deploy tons of gigawatts on the grid in a very short time. Now, the question is, how quickly do we want to do it and what instruments are available for use?

Unfortunately, we are not moving fast enough. A lot of work needs to be done. We need to bring everybody to the table, all the various stakeholders: the financiers, technology providers, and the government. We all need to sit at the table and have a collaboration.

There are currency rates, and the rates of return on some of these investments are lower. You need people who understand the instruments you can use to de-risk some of these projects and have investors coming. We also need to look at social impact programmes because they have a role to play.For electrification in rural communities, it is possible over the next 10 to 15 years.

Don’t you think it is high time Schneider Electric considers manufacturing and assembling products in Nigeria?

We have about 200 people in Nigeria, 98 percent of whom are Nigerians. The MD and the leadership team of Schneider Electric in Nigeria comprises a hundred Nigerians.

We are a global company but with a lot of local knowledge and that’s our philosophy. Schneider Electric is already doing a lot of work in Nigeria in engineering. Yes, there are still a few supply chain issues that we are having with the availability of raw materials and that’s a general problem given the kind of industry we play in. The industry we play in is high-precision engineering and your supply chain process must be precise. We have already started working in that direction. More than half of the engineering solutions are done in Nigeria.

We play in different spaces within the sector and within the spaces that we play in, where local content requirement is essential, we oftentimes have the highest certification for local content. However, manufacturing will be more of a long-term goal, and we are already in conversation with some of our partners.