Africa, Decentralized Energy, Gas & Oil Fired, Renewables, Strategic Development, T&D Infrastructure

Public-private synergy vital for Nigeria’s on-grid market growth

In this exclusive interview with Dolapo Kukoyi, partner at Detail Commercial Solicitors in Lagos, we learn more about what is needed to bridge Nigeria’s energy access gap, as well as the region’s promising off grid future.

Ms Kukoyi will be sharing her insights at the upcoming Future Energy Nigeria conference, taking place 12-13 November, in Lagos.

Let’s start with some background on Detail Solicitors and the work that you do in the power sector.
DETAIL is distinct as Nigeria’s first commercial solicitor firm to specialize exclusively in non-court room practice. The firm’s areas of practice are Energy (Power, Oil & Gas), Infrastructure & Public Private Partnerships (PPPs), Finance, Private Equity, Capital Markets, Corporate & Commercial, Real Estate & Construction and Technology & IP.

DETAIL has a robust Power practice, reputed for its thorough understanding of the legal, contractual and regulatory framework of the Nigerian Power sector. The firm has worked on both the Government/Regulatory side, the Central Bank of Nigeria on its intervention in the power sector and the private side with power developers, financiers and investors. DETAIL’s capabilities include advising clients on power asset privatizations; regulatory compliance; independent power producer start-up, development, due diligence, licensing and financing as well as providing advice on gas supply and purchase agreements.

We also have strong experience advising clients on the legal, regulatory and commercial framework for structuring off grid projects (commercial, industrial and residential) as well as mini grids.

What does your role entail and what do you find most challenging right now?
I lead the power practice of the firm and also supervise on other practice areas including our infrastructure, technology and corporate commercial practice. I do a lot of client service and management, staff supervision, mentoring and management of the firm as a business as well.

My role also entails thought leadership in the power (including renewables), gas and infrastructure sectors generally.

What I find most challenging right now is maintaining our standards of client service and delivery during the current economic downturn in the power sector and in the country generally. Clients want to pay much less for a lot more. We need to keep being proactive, innovative and relevant in the sectors that we operate to keep attracting the right clientele who value our services and the expertise we bring to their transactions.

Don’t miss Nigeria’s biggest energy event,
endorsed by the Federal Ministry of Power.
13-14 Nov 2019, Eko Hotel, Lagos

Any energy projects that Detail Solicitors is involved in in the region currently that you are particularly excited about at the moment?
Over the past year, we have been involved in the off grid space where we have a lot of clients interested in investing in off grid projects (residential and commercial) from renewable and thermal fuel sources. We have also had a lot of clients interested in the mini-grid space who have set up similar projects in other African countries and in Asia. Such clients are now looking at developing similar projects in Nigeria and setting up structures that would make them eligible for development funding from development finance institutions. We also note a lot of keen interest by impact investors in the off grid space.

In the past year we advised on a $7.5m Investment by Breakthrough Ventures in Arnergy Solar Nigeria Limited a renewable energy solutions provider in the commercial off-grid space.

In the past year we advised on a $9m investment by Breakthrough Ventures and a consortium of investors; Allon, EDFI and Norfund in Arnergy Solar Nigeria Limited a renewable energy solutions provider in the commercial off-grid space.

More on investment opportunities within Nigeria’s energy sector
CEO of Nigeria’s Rural Electrification Agency talks investment opportunities
Nigeria’s Egbin Power highlights thermal power

In the off-grid space we have supported GIZ on two mini grid acceleration programs currently ongoing for Isolated and Interconnected mini grids in collaboration with the Rural Electrification Agency (REA).

We are also currently advising on a number of ongoing divestments and acquisitions in the energy space and on the development of an interesting project around LPG distribution and storage.

In the on grid space a number of project developers and Distribution Companies are reassessing their projects and looking to take advantage of the eligible customer and franchising regulations.

Any specific success stories you can share?
I did mention the BEV (Breakthrough Energy Ventures) acquisition of shares in Arnergy earlier this year. A number of projects are still confidential and are at development stage and we would only be able to make announcements when our clients do.

What in your view are the challenges to the energy sector in Nigeria and the region? And the renewable sector in particular?
The biggest challenge currently is getting Nigeria’s on grid market (generation, distribution and transmission) on the path to viability and sustainability. It is a huge challenge; however, it is not insurmountable but just requires commitment, a concerted effort and a holistic approach by government with the collaboration of all stakeholders.

How optimistic are you about business opportunities in Nigeria’s energy future?
I am quite optimistic about the potential for growth in Nigeria’s energy sector. Nigeria has over 180 million people and over 50% lack access to grid electricity and for those who do have access, the electricity is limited to less than 4 hours of supply per day. The dampener is that despite the massive opportunities that exist, there are multiple hurdles for projects (big and small) to scale which reduces our competitiveness as a nation and our ability to attract the right kind of private investment and development finance that would deepen our market.

What is your vision for the power sector in Nigeria?
My vision for the Nigerian power sector on the on grid side is one in which we have a viable and profitable on grid market with effective contractual arrangements across the power value chain and an enabling environment that incentivizes investment in future on grid projects.

On the off grid side my vision is for increased energy access (in terms of connections) for households, communities and businesses on the strength of private investments, collaboration of all stakeholders in the market.

At the upcoming Future Energy Nigeria conference, you are moderating a session on “Bridging Nigeria’s energy access gap, shining a light on REA’s off-grid projects” – what are you hoping for during this session?
I am hoping that this session would be one that identifies the existing hurdles to bridging the energy access gap and motivates more pragmatic and substantive action by stakeholders.

What are you most looking forward to at Future Energy Nigeria?
Engaging, pragmatic and solution-oriented discussions and great networking opportunity.