Mobile money technology led by the telecommunications companies has enabled full take-off of pay-as-you-go (PAYG), an innovative solution that provides means for off-grid power service companies to get paid for energy consumed by millions of Nigerians, especially in rural communities with limited access to the electricity national grid network.
This was confirmed by major stakeholders during the 13th edition of PwC’s Annual Power & Utilities Roundtable themed ‘Setting a New Power Agenda Post-2023 Elections.
Pay-as-you-go (PAYGO) is a financing technology that allows end-users to pay for solar energy in weekly installments.
Data obtained by EnergyDay Nigeria showed the deployment of this innovative payment solution. has positively improved agreements between the Rural Electrification Agency and REA, private developers.
It has also improved the objective of the Nigeria Electrification Project (NEP) programme, funded by a $350-million World Bank loan and $200 million dollars loan from the African Development Bank, AfDB, providing electricity to five million unserved and underserved Nigerians, as about 67 mini-grids have been completed with 995,396 solar home systems deployed.
Stakeholders revealed that most of these interventions have been enabled by the mobile money system which has acted as an engine for financial inclusion for the unbanked Nigerian who subscribed to solar home systems.
Ms. Olamide Abudu, Component Lead, Stand Alone Solar Home System Nigeria Electrification Project, REA, in her remark at the PwC Nigeria’s power round table revealed that the agency has reached out to the last miles with a solar home system adopting innovative payment system enabled by mobile solution system.
She noted that relatively improved financial inclusion in rural areas across Nigeria, has paved the way for a robust payment collection system for off-grid consumers to pay for power used.
Abudu said, “Most off-grid companies, investors, and potential financiers now have a reliable payment system through PAY-Go to recoup their investment revenue. PAYGo has enabled those who want a better system like SHS to be easily connected to off-grid solutions.”
She, therefore, charged the next administration in 2023 to the sustainable financial inclusion policy of President Muhammadu Buhari’s administration by encouraging more Mobile Network Operator (MNO)-driven mobile money platforms to extend their services to the rural communities.
Mr. Edu Okeke, Managing Director, Azura Power West Africa Limited the licensing of mobile money operators in Nigeria has helped improve the delivery of electricity to the underserved.
“In the power space, I have done quite a lot of study using the case of M-Pesa in Kenya and Tanzania, and have seen how Solar Home Systems and other solar power systems have improved energy access due to the level of financial inclusion.
“Payment is made easy as anyone who wants to pay for electricity has a simplified process of paying their bills without necessarily going through the commercial banks.
“I believed that by the time all the telecommunication networks in Nigeria rolled out their mobile money system, this would drive the off-grid system,” the MD of Azura said.
Okeke further commended the Central Bank of Nigeria, CBN for the licenses granted to mobile money operators, according to him, would complement the commercial viability of the Nigerian Electricity Supply Industry(NESI).
He noted that the mobile money development in Nigeria will drive more Foreign Direct Investment(FDI) into the country now that the commercial viability of the off-grid system is guaranteed.
According to him, international investors are excited about the investment opportunities in the Nigerian power industry inspired by the licenses issued to mobile money operators.