In Nigeria, a young entrepreneur sees mini-grids as rural energy’s future

Thursday July 14th, 2016 - Smart Villages

Interview with Ifeanyi B. Orajaka Managing Director / CEO

Green Village Electricity Projects Ltd.

Location: Nigeria

“When everything else crumbles, it’s your integrity that will be able to pull you up again”

Ifeanyi B. Orajaka holds a Bachelor’s degree in Electrical / Electronics Engineering from the Federal University of Technology Owerri, Nigeria. He has vast experience in renewable energy systems design and installation, which includes the Design of an Efficient PV Solar Electricity System (undergraduate project). He founded the company with the other Executive Board members while still an undergraduate student, has attracted several awards to the company, including being awarded the honour of African Energy Leader of the Year 2016 by Terrapin. He has groomed the company to become a major player in the nation’s renewable energy industry. In terms of Green Village Electricity Projects Ltd.’s achievements, US$1.4 million has been raised and committed to six pilot projects to date. GVE-P™ Ltd. has been listed in the Sankalp Forum’s top 60 most promising SMEs in sub-Saharan Africa in 2015. Our model is scalable to meet specific community needs, and it has a directly measurable environmental and socio-economic impact.

DSC_2092Ifeanyi B. Orajaka and his co-founders, Chuka P. Eze and Ikechukwu O. Onyekwelu, are all in their 20s. Like many other young people—in Silicon Valley, London, Shanghai, and beyond—they decided to start their own company immediately after their undergraduate studies. Six years ago, they were doing an internship with a leading oil and gas multinational. During this internship, they went on facility inspection visits in remote communities in the Niger-Delta region of Nigeria. In the process, they found “abject energy poverty and started to brainstorm on how best to bring electricity to these communities.” Starting initially as more of a “CSR” (corporate social responsibility) project, they soon decided that it could also be a business.

Thanks to several awards from the Institute of Electrical and Electronics Engineers (IEEE), the United Nations Development Program (UNDP) and the Bank of Industry Nigeria, they were able to carry out a feasibility study with Deloitte. They soon began “to appreciate the development opportunity and potential that the project had” in addition to its strong business case. As Orajaka puts it, “my motivation comes not only from profit but also from social development and the impacts on the lives of people”. Following this study, the three founders went “all in” and started Green Village Electricity Projects Ltd. (GVE-P™ Ltd.) in September 2012.

Local impacts

Thus far, GVE-P™ Ltd. has carried out six pilot projects whose budgets have ranged from US$60,000 to US$220,000. The majority of these pilots (five) have focused on creating mini-grids to power productive uses of energy, such as small businesses and agro-processing. In total, their pilot projects have reached 1,010 households (12,240 people) and have created 145 street lighting points along the main streets of four beneficiary communities. This means that people have enhanced security at night and extended business operating hours: “I’ve witnessed children gathering around street lights to study and play after dark”, Orajaka added.

Moreover, 420 jobs were created during and after the implementation of these pilot projects. US$54,000 of wealth was created in the pilot communities during implementation, and local people have benefited from knowledge transfer. All the communities experienced a 40% reduction in energy-related expenditure, and the cumulative annual CO2 emissions have been reduced by 880.32 metric tonnes.

In two of these pilots, agro-processing has been one of the main uses of energy. These agro-processing facilities allow farmers to process their grains—whether maize, rice, sweet sorghum, or millet—closer to home rather than traveling 5-20 kilometres. GVE-P™ Ltd. is also strongly focused on involving local communities in their work and creating jobs. In fact, they have a company policy that requires them to hire local people for 80-90% of implementation. In addition, local people are trained in technical and electrical work that provides employment even once the project has been implemented. Orajaka pointed out that indirect jobs are also impacted through energy access—one woman who runs a business selling groceries and drinks saw her business expand tenfold once she was able to chill the drinks and food.

The “double bottom line”

While GVE-P™ Ltd. has implemented solar homes systems in one pilot, he finds that mini-grids have unique opportunities—they can help to scale up economic activities while also providing lighting for homes and communities. Challenges, on the other hand, include the need for patient capital that can wait 5-15 years for repayment. That means GVE’s investor profile tends to be those who are looking for a “double bottom line” that includes development impacts alongside profit. According to Orajaka, mini-grids can be good for business if investors can be patient and share the company’s social aims. And even if electricity from mini-grids and solar home systems will always cost more than the grid for users, they gain access to reliable sources of electricity.

The future for GVE-P™ Ltd.

GVE-P™ Ltd. will target 1 million new customers in Nigeria over the next six years, according to Orajaka. They have a bankable business plan and want to see things change for Nigeria’s 92 million rural residents without access to electricity. As an entrepreneur, Orajaka advises new entrepreneurs to do as he has done: “have your ears on the ground, pay attention to detail, and most importantly, hold your integrity to a very high regard. When everything else crumbles, it’s your integrity that will be able to pull you up again”.

—Molly Hurley-Dépret, Storyteller, Smart Villages Initiative

Banner Image: The road ends here by Melvin “Buddy” Baker (https://flic.kr/p/87vzKG), CC BY 2.0