Nigeria Electrification Project

using Odyssey to implement big data solutions for one the most ambitious off-grid rural electrification programs in history

The World Bank and the Nigerian Rural Electrification Agency are using Odyssey to implement big data solutions for one the sector’s most ambitious off-grid rural electrification programs in history.

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Nigeria’s Ambitions

Odyssey, in partnership with the Nigerian Rural Electrification Agency (REA) and the World Bank, is transforming off-grid energy financing through the Nigeria Electrification Project (NEP) and is unlocking new opportunities to design large-scale financing programs that are directly tied to electrification results.

December 7th, 2019 marked one of the sector’s biggest milestones; the NEP celebrated the commissioning of its first mini-grid site to be financed by results-based financing (RBF), through its Performance-Based Grant program.

Powered by the Odyssey platform, NEP is proving that new technologies and big data solutions can enable efficient results-based financing, with per-connection subsidies deployed only after established proof that customers have been connected to reliable power.

The Nigeria Electrification Project (NEP) is one of the most ambitious off-grid rural electrification projects in history.

With $350M committed from the World Bank, REA is targeting to electrify over 1 million households, 250,000 businesses, and 37 universities across Nigeria.

This number is expected to significantly increase with $200M of follow-on funding recently committed by the African Development Bank.

NEP is proving that new technologies and big data solutions can enable efficient results-based financing.

In addition to funding for technical assistance and electrification of universities, NEP includes three key project funding components: a minigrid Minimum Subsidy Tender, a mini-grid Performance Based Grants (PBG) facility, and a Solar Home System Output-Based Fund (OBF).

All three of these funding components are results-based; funds are disbursed once the recipient has proven to have provided reliable electricity to its customers.

NEP is significant not only in the enormous impact the program is expected to have on Nigeria’s rural populations, but it also provides a unique opportunity to demonstrate how technology can help enable efficient results-based financing programs.

As a case in point, REA was able to celebrate the commissioning of its first mini-grid just three months after the project’s application was submitted to PBG program.

This is one of the fastest financing implementations to date.

REA celebrated the commissioning of its first mini-grid just three months after the project’s PBG application was – one of the fastest financing implementations to date.

With numerous other countries and donors gearing up to support RBF schemes, the entire sector is watching NEP with great expectations and anticipation.

Odyssey’s partnership with REA and the World Bank is proving that advanced technology can facilitate efficient, low cost, results-focused financing at scale.

The Challenge

Traditional approaches to administering such a financing program were insufficient at the scale of NEP. The path to designing a program that could achieve REA and the World Bank’s lofty ambitions presented challenges on several dimensions.

Minimum Subsidy Tender: The first set of challenges were related to the mini-grid Minimum Subsidy Tender, whereby bidders will be awarded a portfolio of pre-selected mini-grid sites (called “lots”) on the basis of the merits of the bidder’s business plan and the amount of the firm’s subsidy request.

In addition to funding for technical assistance and electrification of universities, NEP includes three key project funding components: a minigrid Minimum Subsidy Tender, a mini-grid Performance Based Grants (PBG) facility, and a Solar Home System Output-Based Fund (OBF).

All three of these funding components are results-based; funds are disbursed once the recipient has proven to have provided reliable electricity to its customers.

In order to conduct multiple large-scale tendering rounds, REA needed a way to rapidly assess the potential of hundreds – and even thousands – of communities for mini-grid development, and to develop baseline metrics that could be provided to the private sector to attract interest in the tender.

Furthermore, they needed an efficient way to compare complex technical and financial plans for project development by bidders, evaluating detailed site plans as well as considering firms’ approaches to leverage efficiencies across an entire lot of sites.

Without solutions to these challenges, administering the tender would be extremely costly, reducing the amount of funding directed into electrification efforts.

“The transparency and speed of the NEP process is due to the Odyssey e-procurement method we utilized. We could not have achieved this through traditional manual methods. We have seen firsthand that data is absolutely essential to catalyzing the mini-grid sector in Nigeria.”

Damilola Ogunbiyi, MD/CEO, REA

Results-Based Financing: The second challenge was how REA would actually measure the results they planned to fund. While results-based funding ensures that subsidies are tied directly to the program’s targeted outcomes, implementation is difficult.

How would REA verify millions of connections? Traveling to thousands of minigrid and solar home system (SHS) sites to verify connections in person would be logistically infeasible and prohibitively costly.

Furthermore, how would verification agents process documentation across numerous different on-site technologies to evaluate consumers’ level of service?

The Solution

Odyssey’s suite of digital technologies provided the solution for NEP. Odyssey, REA and the World Bank collaborated closely to develop a central software platform that would enable the sector’s first large-scale, results-based financing scheme.

At its core, Odyssey is a big data platform that processes and analyzes billions of data points across varied data streams – mobile applications, live feeds from smart meters, solar home system platforms, and more – and across varied organizations, technologies, and geographies.

The platform makes large volumes of data accessible and useable for the purposes of participating or administrating a financing program – particularly one focused on directly tracking granular results. REA leveraged this technology in several ways.

Odyssey, REA and the World Bank collaborated closely to develop a central software platform that would enable the sector’s first large-scale, results-based financing scheme.

To determine the viability of mini-grid sites across the country, and develop a portfolio of sites for multiple rounds of tendering, REA first deployed numerous enumerators into the field to collect detailed geo-tagged surveys of commercial, industrial and residential energy consumers.

The result was one of the sector’s largest data sets on off-grid communities, with thousands of customer responses indicating availability of power, energy usage patterns, willingness to pay, and other key parameters for the site.

These data sets feed directly into Odyssey’s feasibility analytics platform, automating the demand forecasts, system design and financial modeling required to assess the viability of each site.

Using the Odyssey platform, REA was able to rapidly generate complete feasibility profiles for hundreds of sites at once, replacing labor-intensive, manual analysis.

These analytics provide a baseline by which REA will evaluate incoming tender bids. In addition, sub-sets of these feasibility analyses are presented to bidders in a structured template within the Odyssey platform, enabling bidders to use the survey data to develop standardized, comprehensive proposals.

By collecting proposal information in this manner, REA is able to run comparative analytics on each proposal, at the level of an individual site or across an entire lot.

To tackle the challenges of verifying connections for results-based financing, Odyssey has developed a set of tools to rapidly collect and process documentation of project deployment and customer connections.

Verification agents may track projects from pre-development through operations, and batch-process documentation of customer connections to mini-grids or solar home systems.

With all data submitted by participating firms entered into the platform – spanning technical designs, community engagement documentation, and connections data – Odyssey can build automated dashboards to display Key Performance Metrics across all organizations affiliated with the financing program.

The result is a transparent way to monitor the program’s effectiveness and key results.

Furthermore, with the advancement of smart metering technologies, the Odyssey platform verifies customer connections through remote monitoring of mini-grids and solar home systems.

Odyssey integrates with various smart meter and SHS application programming interfaces (APIs) to collect granular data on customer consumption and payments, enabling the platform to automatically confirm if a customer is receiving power at specified reliability levels.

This technology limits the number of in-person site verification visits to a small sample of random audits, and obviates manual processing of documentation. With the Odyssey platform, NEP is able to rapidly verify connections and disburse funds accordingly.

Nigeria Electrification Project is paving the way for governments around the globe to implement innovative, data-driven approaches to rural electrification.

Looking Forward

NEP is now live, with mini-grid and solar home system companies gearing up operations to take advantage of the program’s subsidies.

As the program expands, the NEP team will continue to experiment and adapt to some of the most salient and challenging questions.

As it pioneers solutions to these questions, the Nigeria Electrification Project is paving the way for governments around the globe to implement innovative, data-driven approaches to rural electrification.

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