Sabon Gari: Despite FG’s multi-billion investment on solar project, SMEs spend over N36m yearly on generators (Part one)

The Federal Government through the Rural Electrification Agency (REA) under the Nigeria Electrification Project (NEP) resolved to provide a cheap, stable, and efficient off-grid power to support Small and Medium Scale Enterprises (SMEs) at the Sabon Gari Market, Kano. The market is among the top prominent commercial hubs in the state with over 13, 000 shops. Traders in similar markets such as Ariaria in Abia, Iponri in Lagos States were also listed as beneficiaries. The intent was to provide electricity to over 340 economic clusters in the country. Olugbenga ADANIKIN who visited the markets in three states report about gaps in the project implementation and how it is frustrating most small businesses four years after flag-off.

IT was on a Tuesday noon of November 30, at about 2:47 pm. Mrs. Safiya Bello, a middle-aged woman stands on the balcony of a salon complex within the Sabon Gari Market, Kano, scouting for potential customers.

Her shop is strategically located in the market ranked Nigeria’s largest with solar-based decentralised power grid.

“Oga! You wan make your hair?” Safiya queried in a seemingly customary phrase.

“No, I just came to find out if the Federal Government’s solar energy project is servings its purpose.”

Safiya spared no time expressing her disappointments. “No! It is a failure!!”

“It is not serving any purpose. It cannot power a simple hairdryer. In fact, most traders have shifted to Maja.”

‘Maja’, this reporter would later find out, is the high-capacity power generating sets serving shop owners in Abubakar Rimi Market. It has at least 13, 000 shops.

This is despite the ban on the use of generators and privately installed solar panels since the FG launched the Energizing Economies Initiative (EEI) of the Rural Electrification Agency (REA).

“How can you plug two customers’ phones and your power will just trip off…” Safiya who was obviously furious, asked.

“See my shop. I am no longer connected to it (solar) because the amount demanded from us before we can use our hairdryer is N10, 000 weekly. Where will I get the money?”

She belongs to the Igbo Road Hairdressers Association comprising over 250 members. This implies that if each salon operator contributes N10, 000 weekly for energy consumption, as demanded, it means each salon owner would require at least N40, 000 monthly to use their appliances.

The amount will cost N480, 000 in a year, per hairstylist and N120m annually for 250 hairdressers.

Mrs. Victoria George runs a salon at Shop PBA N/45 within the same market. Her story is similar to Safiya’s. All her tools such as dryer, hair stretchers, and the likes have become useless, except she uses her power generating set.

Victoria who subscribed to the N4, 000 monthly tier removed a device from its case.

“Look at this small hand dryer,” she said displaying it to this reporter.

The solar energy cannot power this equipment as little as it is, she adds, picking up a stretcher to re-emphasise her argument.

One of the customers was quick to ask, “what about your big hairdryer?”

She walked up to it, pulled the equipment hung on the wall with adjustable hinges, and tried switching the knob. It is now dusty due to irregular use.

“Even when we pay for the solar, we still have to switch on our generators and the governor of Kano has banned the use of generators in the market.”

Another shop owner, Mrs. Aishat Musa is subscribed to N2, 000 solar power weekly. That is, N8, 000 in a month, yet spends N12, 000 monthly on her private generator to meet the energy demand of her business.

She has also resolved to forgo the solar power source as it hurts her business.

How EEI came to play

During the first term of President Muhammadu Buhari, the FG through the REA energizing economies initiative rolled out the energy transition programme.

It is decarbonisation of the energy sector – the use of solar technology or clean energy to power businesses, majorly Micro, Small, and Medium Scale Enterprises (MSME). The project doubles as part of Nigeria’s Intended Nationally Determined Contributions (INDC) also known as the National Climate Action Plan designed to reduce climate change impacts including severe weather conditions such as flooding, desertification, rising sea level to mention but few.

Nigeria is a signatory to the historic 2015 Paris Agreement, and it pledged to reduce Green House Gas (GHG) emissions in the country unconditionally by 20 per cent and conditionally by 45 per cent. Emission of the GHG causes climate change.

The FG further submitted an updated INDC to the United Nations (UN) on 27 May 2021 to renew its commitment to clean energy.

Hence, launched in September 2017, the EEI was to increase energy access, provide clean, affordable energy and off-grid power solutions for traders. The solar power intervention, however, phases out the controversies around epileptic supply and estimated billings.

Specifically, over 340 economic clusters were identified, with an initial 16 clusters and these clusters were to enjoy constant, affordable, and reliable supply from clean energy.

Though it is in phases, part of the first phase was executed at Ariaria market in Abia State; Sabon Gari market in Kano; Sura in Lagos Island, Eti-Osa LGA, and Iponri market, Surulere LGA, both in Lagos State.

“We are now also implementing, a policy that no government before us committed to, developing energy through mini-grids. Iponri market is now being powered by solar,” Babatunde Fashola, the former Minister of Power, Works and Housing stated during the project inspection.

“This solution is also in Sabon Gari market, Kano state and it is coming up in many other markets.”

A firm recognised as Special Purpose Vehicle (SPV) was created to manage the solar facilities in each of the markets.

The SPV at the Sabon Gari market, Kano – Sabon Gari Market Energy Solutions Limited (SGESL), for instance, signed a 20-year renewable contract with the Kano State government. It was registered in August 2017 but listed as inactive because it has defaulted in its obligation to the CAC.

The Iponri market SPV is referred to as Iponri Market Energy Solution Limited (IMESL). The firms are managed by the parent company Resource Energy Limited with the company representatives across the markets as well as growing foreign investments.

Nevertheless, on-ground findings reveal most traders in the benefitting markets are dissatisfied with the high tariff.

READ MORE HERE: https://www.icirnigeria.org/sabon-gari-despite-fgs-multi-billion-investment-on-solar-project-smes-spend-over-n36m-yearly-on-generators-part-1/