A one-day workshop was held by the Lagos State Ministry of Energy and Mineral Resources in collaboration with the World Bank to examine the framework for DPV implementation in Lagos State.
The session’s goal was to talk about how to get to the Lagos state goal of 1GW of installed PV capacity by 2030, with a recommended mix of 60 percent commercial and industrial, 20 percent residential, and 20 percent government-owned structures. The event drew over 70 participants from across the industry value chain, including PV developers, solar aggregators, commercial banks, development financing institutions, and Fintechs, among others.
In his opening remarks, Lagos State’s Honorable Commissioner for Energy and Mineral Resources, Engr. Olalere Odusote, stated that the state is committed to addressing the demand—a grid supply deficit estimated at 33-43 TWh (83 percent of total demand)—and that rooftop solar is one of the potential solutions being considered.
“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,” said Ashish Khanna, World Bank Acting Regional Director for Infrastructure, West and Central Africa.
The discussion centered on the financing structure, operating framework and the institutional arrangement required to achieve the state ambition.
Participants considered LASG’s ambition achievable and confirmed their readiness to work with the state to realize this ambition.
The funding requirement for deployment of about 500MW of solar DPV in the next five years is estimated at US$350 – US$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. The financing would be provided by international development finance institutions, equity investors and commercial lenders.
The program will adopt two business models – 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.
In his closing remark, Honorable commissioner Odusote noted that the ministry would incorporate the feedback from the stakeholders and leverage same in developing a detailed project design document to guide the project implementation.