All On, a Nigerian impact investment company, Odyssey Energy Solutions, and the Alliance for People and Planet (The Alliance) have announced the launch of a global aggregated procurement program for renewable energy companies in Nigeria, backed by a $10 million financing facility.
The new Demand Aggregation for Renewable Technology (DART) program will ensure that affordable, high-quality solar products reach the communities most in need in Nigeria, before piloting the program in four additional countries in Africa.
The DART program aims to boost the growth of the renewable energy sector in Nigeria and beyond by combining demand pooling and aggregated solar equipment purchases, affordable financing, and well-coordinated logistics processes to help solar companies achieve economies of scale and cost savings for end-users.
What they are saying
Eric Wanless, Managing Director of Innovation for The Alliance said “We are excited to launch the DART program in Nigeria as an important part of the Global Energy Alliance for People and Planet, which is accelerating the transition to renewable energy access for all, reducing emissions and creating jobs. Aggregating the procurement of standardized DRE products will ensure low-cost, reliable, and clean energy is empowering people and businesses in Nigeria.”
Wiebe Boer, All On CEO said, “We are particularly excited about this deal which will inject much-needed capital into the renewable energy sector in Nigeria. This innovative partnership provides a solution to industry challenges such as high finance costs and lack of scale, by ensuring price competitiveness, supply chain optimization and unlocking local currency financing.”
The DART mechanism is “a huge win for Nigeria,” said Damilola Ogunbiyi, CEO and Special Representative of the UN Secretary-General for Sustainable Energy for All and Co-Chair of UN-Energy.
She remarked, “It would go a long way in achieving the much-needed economies of scale by bringing together finance providers, aggregated procurement agents, and specialized logistics. This is an example of the kind of innovation and collaboration needed to close the energy access gap, enable a just and inclusive energy transition, and unlock a sustainable future for all.”
“We are excited about the potential for demand aggregation and centralization of procurement and logistics services to dramatically drive down the cost of key distributed renewables equipment, and accelerate project deployment,” said Emily McAteer, Odyssey CEO.
Ahmad Salihijo, Rural Electrification Agency MD said, “I am particularly impressed by this collaboration between All On, Odyssey, and the Global Energy Alliance for People and Planet, and that Nigeria has been selected as the country to kickstart this initiative. This could be a breakthrough in bridging the finance gap that hinders the growth of small and medium-sized enterprises in the nascent renewable energy sector in Nigeria.”
The All On-managed finance facility will provide debt funding for solar companies already approved by the Rural Electrification Agency (REA) for the Nigeria Electrification Program (NEP) to purchase lower-cost solar equipment through the DART.
The Equipment Finance Facility for Nigeria is seeded by matching investments of $5 million from All On and The Alliance respectively.
Odyssey Energy Solutions will provide aggregated procurement services in five pilot countries in Africa, starting in Nigeria. They will manage the global platform to standardize equipment, process solar company orders, manage supplier relationships, and link developers with finance partners.
According to a 2020 Sustainable Energy for All (SEforAll) Report on the solar sector in Nigeria commissioned by All On, aggregated procurement and logistics for solar equipment can significantly lower costs and unlock bottlenecks in the supply chain.
This is what DART aims to achieve to make affordable, high-quality solar products reach the most marginalized communities.
The DART Program aims to improve the overall investment case of the renewable energy sector and attract more international and local investors, particularly commercial banks as lenders to the sector.