102 Yakubu Gowon Crescent Telephone: (+234) 703 583 0641-4
Asokoro District (+234) 708 999 6090-1
P.M.B. 339, Garki Fax: (+234) 9 314 5267
Abuja, FCT Nigeria
December 12, 2024
Ref: FMOFIER-241209-DARES-NEP-G146
Mr. Wale Edun
Honorable Minister of Finance and Coordinating Minister for Economy
Federal Ministry of Finance
Central Business District, Abuja, FCT
ATTENTION: Mr. Stanley Nyeso George, Director, International Economic Relations
Nigeria Distributed Access through Renewable Energy Scale-up (DARES) Project
Nigeria Electrification Project (Credit No. 62910)
Implementation Support Mission (November 4-12, 2024)
Management Letter and Aide Memoire
I would like to thank the Federal Government of Nigeria (FGN) for the cooperation
extended to the World Bank team that carried out the Implementation Support Mission for the
US$750 million Nigeria Distributed Access through Renewable Energy Scale-Up (DARES)
Project and the US$350 million Nigeria Electrification Project (NEP).
The key objectives of the missions were to (i) ensure implementation kicks off for
Nigeria DARES by affirming the readiness of all critical implementation arrangements, (ii)
ensure the completion of all necessary analytical work and facilitate the commencement and
progression of crucial activities including the National Electrification Strategy and
Implementation Plan (NESIP) and the REA business plan, and (iii) commence closure
processes of the NEP, take stock of program achievements, and assess progress to completion
of the Energizing Education Phase II distributed renewable energy plants at the seven federal
universities and two teaching hospitals.
Distributed Access through Renewable Energy Scale-Up (DARES): We would also
like to acknowledge the adoption of the project implementation manual (PIM) by the Rural
Electrification Agency (REA) on November 1, 2024. Furthermore, we are pleased to inform
you that the DARES project achieved effectiveness on the 15 November 2024, following the
countersignature of the letter for the loan reinstatement and declaration of effectiveness of the
Financing Agreement.
The mission discussed key issues related to DARES implementation readiness and to
closure of the NEP, including: (i) the REA business plan focusing on the staffing plan of the
project management unit to ensure sufficient capacity for seamless implementation of the
two (2) key funding windows – Performance Based Grant (PBG) and Minimum Subsidy
Tender (MST); (ii) the preparation and adoption of a national electrification strategy and
implementation plan (NESIP), including clarification on the mandate and role of federal
institutions such as the Federal Ministry of Power (FMoP), the REA and that of State
Governments; and (iii) the closure processes of the NEP program including critical actions
across fiduciary, procurement, environmental and social aspects of the project that need to
be concluded before project closing date of December 31, 2024.
Mr. Wale Edun 2 December 12, 2024
The mission also discussed the preparedness of critical digital and geospatial platforms
and the need to conclude contract arrangements with platform service providers as well as the
urgency of finalizing template agreements for project implementation, such as the grant
agreement and data sharing agreement.
Nigeria Electrification Project (NEP): The NEP has disbursed 85 percent of available
financing, with the remaining financing (US$49.76 million) fully committed. Three (3) of the
four (4) PDO level indicator targets have been exceeded. This performance is linked to
achievements under components 1 and 2 of the project, which are considered to be Highly
Satisfactory. As a result, the Project Development Objective (PDO) and Implementation
Progress (IP) ratings are currently Satisfactory and Moderately Satisfactory, respectively. The
Energizing Education Phase II component is on track to complete all critical aspects of solar
plant construction and installation activities before the revised project closing date of
December 31, 2024. Therefore, a project closing date extension is not envisaged. Further, the
sustainability plan of the Energizing Education Phase II solar plant was discussed, with focus
on operations and maintenance of the plants including spare parts stocking and management,
budgeting and funding post-commissioning, plant governance, life cycle assessments, and end-
of-life activities.
We wish to reiterate the need for deepened efforts by the project implementing agency
to ensure outstanding works across all Energizing Education Phase II sites are completed before
the revised project closing date of December 31, 2024.
I would greatly appreciate your support in facilitating the achievement of these critical
steps. The Aide Memoire, which details the discussions and outcomes of the mission, is
enclosed. Please feel free to reach out to the Task Team Leads, Arsh Sharma
(asharma15@worldbank.org), Collins Chukwuma Obi (cobi2@worldbank.org) and Ashish
Shrestha (ashrestha1@worldbank.org), for any clarification.
We remain committed to supporting the FGN’s universal access target and energy
transition plan through implementation of the DARES project.
Sincerely,
Ndiame Diop
Country Director, Nigeria
Western and Central Africa Region
Attached: Aide Memoire
Mr. Wale Edun 3 December 12, 2024
CC:
Presidency
• Ms. Olu Verheijen, Special Adviser on Energy, Office of the President
Nigeria Electricity Regulatory Commission
• Mr. Sanusi Garba, Chairman, Nigeria Electricity Regulatory Commission
• Mr. Musiliu Oseni, Vice-Chairman, Nigeria Electricity Regulatory Commission
• Mr. Nathan Shatti, Commissioner, Nigeria Electricity Regulatory Commission
• Mr. Yusuf Ali, Commissioner, Nigeria Electricity Regulatory Commission
Rural Electrification Agency
• Abba Aliyu, Managing Director/CEO
• Olufemi Akinyelure, Head, Program Management Unit (NEP)
Lagos State Government
• Mr. Biodun Ogunleye, Honorable Commissioner, Lagos State Ministry of Energy and
Mineral Resources
• Engr (Mrs.) Abiola Kosegbe, Permanent Secretary, Lagos State Ministry of Energy and
Mineral Resources
Federal Ministry of Power
• Chief Adebayo Adelabu, Honourable Minister of Power, Federal Ministry of Power
• Alhaji Mamudah Mamman, Permanent Secretary, Federal Ministry of Power
• Mr. Sule Abdulaziz, Managing Director, Transmission Company of Nigeria
• Engr. Amin Tahir, Program Coordinator, Transmission Company of Nigeria
• Engr. Tukur Musa Bamalli, Project Manager, Transmission Company of Nigeria
Federal Ministry of Finance
• Mrs. Jafiya S. Lydia, Permanent Secretary (Finance)
• Mr. Stephen Ohaeri, Director, IERD, Federal Ministry of Finance
• Mr. Yomi Lawal, Assistant Director, IERD, Federal Ministry of Finance
IDA-IBRD
• Ms. Zainab Ahmed, Executive Director for Nigeria, Angola and South Africa, IDA-IBRD
• Mr. Pedro Fonseca, Alternate Executive Director for Nigeria, Angola and South Africa,
IDA-IBRD
• Ms. Gladys Anthony Ekwere, Senior Advisor to the Executive Director, Nigeria, Angola
and South Africa, IDA-IBRD
NIGERIA
Distributed Access through Renewable Energy Scale-Up
Project (P179687 - DARES) and
Nigeria Electrification Project (P161885 – NEP)
Implementation Support Mission
AIDE MEMOIRE
I. INTRODUCTION
1. A World Bank mission1 was conducted from November 4 - 12, 2024 to provide
implementation support to the Nigeria Distributed Access through Renewable Energy Scale-
Up (DARES) Project and the Nigeria Electrification Project (NEP). The objectives of the
mission were to: kick off the implementation of Nigeria DARES by affirming the readiness
of all critical implementation arrangements; review the status of necessary analytical work;
assess progress towards achievement of performance based conditions comprising of policy
and regulatory actions and process improvements; take stock of NEP achievements, assess
progress to completion of the Energizing Education Phase II distributed renewable energy
plants at the seven federal universities and two teaching hospitals, and commence closure
processes of the NEP.
2. The mission held meetings with the officials of the Rural Electrification Agency (REA) and
NEP/DARES Project Management Unit (PMU), Nigeria Electricity Regulatory Commission
(NERC), Lagos State Government (LASG) – Ministry of Energy and Mineral Resources
(MEMR) and Lagos State Electricity Board (LSEB). In addition to regular mission meetings,
special roundtable meetings, including a pre-application meeting/workshop, were organized
by REA and the World Bank to engage with the private sector and other stakeholder on
DARES program offerings and eligibility, including a detailed walk through of program
application processes, grant claim, and disbursement mechanism. The key participants and
agenda for the two (2) day roundtables/workshops are provided in Annex C.
3. This Aide Memoire summarizes key findings and recommendations of the mission. Annex A
presents the agreed DARES and NEP Action Plan. Annex B presents the list of officials met
and the composition of the Bank team. The final version of this Aide Memoire was endorsed
by World Bank management, and the document will be publicly disclosed.
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The mission members included Arsh Sharma (Senior Energy Specialist, TTL), Ashish Shrestha (Energy Specialist,
co-TTL), Collins Obi (Energy Specialist, co-TTL), Ifunanya Nwandu (Consultant), Arigu Kudu (Financial
Management Specialist), Akeem Bello (Procurement Specialist), Christopher Mays Johnson (Senior Social
Development Specialist), Elijah Abiodun Siakpere (Senior Social Development Specialist), Hadija Kamayo (Senior
Financial Sector Specialist), Lucky Erhaze (Environmental Specialist), Ufang John Ufang (Team Assistant), Olateju
Abimbola (Senior Investment Officer, IFC), Hanning Bi (Investment Officer, IFC), Sarah Afridi (Investment Officer,
IFC).
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II. SUMMARY SNAPSHOT OF NEP AND IMPLEMENTATION STATUS
KEY INDICATOR SUMMARY DATA
• Approved June 2018
• Effective June 2019
Project Age • Closing December 31, 2024
• 99% of the way toward closing date
Status of Financing • $274.22 million disbursed out of $350 million (85%)
• 1.15 million households provided with new or improved
electricity service (target 1.06 million) (105%)
• 1.08 million households and MSMEs electrified with stand-
Results alone solar solutions (verified and paid connections)
• 107,519 households and MSMEs electrified via 173 mini grids.
• Installation of hybrid captive power solutions complete at all
of 100 COVID-19 isolation and treatment centers (100%)
4. Transition of Projects from NEP to DARES. The mini grid Performance Based Grant (PBG)
budget is fully committed and almost fully disbursed, with disbursement prioritized for projects
ready for commissioning and for commissioned projects completing all targeted connections.
There is a much larger pipeline of projects that are partially completed, for which there remain
insufficient budget under the NEP for the grants due to these projects. The mission team
discussed extensively with the REA and the World Bank fiduciary, environmental and social
safeguards teams on modalities for these partly completed projects to receive the remaining
grant due to them under DARES. It was agreed these partially completed projects will need to
be compliant with the new Environmental and Social Framework in order to be eligible for
grants under DARES.
5. Progress update on Energizing Education Programme II component: The mission noted
the disbursements to date for this component is $110.73 million. Procurement of equipment across
all sites has been completed, and all payment requests made for 70% of contract sum, for shipped
equipment have been processed and paid, for Lots 1- 7. Factory Acceptance Test (FAT) of major
equipment has been concluded for Lots 1- 7. Overall progress of construction works (power plant,
streetlights, workshop and training center and rehabilitation of distribution network) is over 74%.
Nonetheless, a key issue noted by the Project Owners Engineers (POE), is the outage management
hurdle with the DISCOs which hinders rehabilitation works on the distribution lines evacuating
power from the solar plant from proceeding at a faster pace. Further, a sustainability plan to ensure
the continued operation of the plant through its life cycle was discussed during the mission.
6. Procurement. The mission team noted that the cleared procurement activities, being carried out
by the PMU, are in line with the approved procurement methods on STEP and procurement
guiding principles. In addition, the procurement performance systems regarding internal controls,
record-keeping, and implementation of the project align with the PAD, PIM, and FA. Overall, the
Procurement Risk Rating following the Implementation Support Mission (ISM) is assessed as
Substantial as a result of the complex nature of the Goods and Services. However, the Procurement
Performance Rating is rated Satisfactory. Further, given project closing date of December 31, 2024,
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the REA was advised to (i) review NEP procurement workplan and provide a post project
procurement report documenting activities completed, activities pending, and lessons learnt and
(ii) ensure that all undocumented activities be documented and entered on the STEP platform.
7. Financial Management. From the discussion held, the FM risk rating (residual) during the
mission is retained as Moderate while the FM performance rating is sustained as Moderately
Satisfactory because of timely submission of interim financial report, quick resolution of critical
FM agreed actions in the last FM supervision mission, and resolution of some of the issues
identified in the FY23 external audit review from the management letter. However, noted, is the
delay in submitting Q2 internal audit report. These ratings will be revised depending on the FM
performance of the project in the next FM review/discussion, and implementation completion
report (ICR). As part of NEP project closure procedure, the REA team was advised to: (i) prepare
a payment/disbursement schedule and submit to the Bank before project closing date; (ii) ensure
that all invoices from consultants and performance guarantee for closure Audit are delivered to the
Bank by December 31, 2024; and (iii) ensure that all expenditure incurred are documented and
reflected on client connection to avoid ineligible expenditures. It was noted that payments to
contractors, consultants, and other project beneficiaries beyond the project closing date is possible
for up to 4 months grace period for only invoices and obligations incurred and submitted to the
Bank prior to project closing date of December 31, 2024. Details of FM discussions during the
Implementation Support Mission (ISM) are captured in Annex D.
8. Environmental & Social Safeguards. The PMU has been constituted with the required E&S staff
with experience in safeguards / ESF implementation. The Bank E&S team will continue to provide
the needed support to expedite implementation of on-going project activities and aid seamless
implementation of closure procedures. The overall safeguards rating is Satisfactory. Transiting to
the DARES project, the required E&S instrument for implementation readiness have been prepared
and disclosed in readiness for implementation. As part of NEP closure procedure, the REA team
were advised to prepare a schedule of outstanding works and projected completion timeline to
enable comprehensive review of E&S aspects of outstanding activities.
III. DARES IMPLEMENTATION READINESS STATUS
Solar Hybrid Mini Grids Component
9. The mission reached agreement with REA on the grant design and delivery mechanism for
the solar hybrid mini grids component. The REA team leveraged the output of detailed
analytical work including sensitivity analysis, cost benchmarks, and technical assessment to
provide a grant framework that fine-tuned and improved upon the PBG and MST mechanisms for
mini grids under the NEP. Key features of the DARES grant framework agreed with REA include
(i) A differentiated PGB grant structure for mini-grid and mesh -grid sites categorized into three
major groups based on a scoring methodology that considers the number of structures in a proposed
mini-grid site, population density, income levels, solar resource potential, proximity to a hub, and
mini-grid penetration. (ii) A one -stage MST process for interconnected mini-grids with two sub-
steps – pre-qualification and RFP issuance. The private sector developers are expected to compete
on the basis of subsidy calibrated in US$ per MW or kW under a fixed entry tariff amount per site
in a portfolio of projects with pre-defined minimum technical and service standards.
3
10. The mission team was informed of the progress made on sites preparatory works for the
MST for interconnected mini grids. 10 out of 11 DISCOs in Nigeria have submitted over 600
sites across 33 States for technical assessment, evidencing significant interest in the DARES
program by DISCOs. REA has executed a memorandum of understanding with participating
DISCOs and has commenced the 1st Phase of site assessment for over 300 sites. 40 sites of the
assessed 300 plus sites were prioritized based on some criteria including demand for electricity,
security and accessibility, distribution network health, cluster metering status, DISCOs interest
level and track record in facilitating DER deployment.
11. The mission noted the need to roll-out the PBG window for interconnected mini-grids swiftly
as highlighted by key stakeholders including NERC. Whilst further assessments and analytical
work will be performed for the pre-identified 40 sites, REA and NERC highlighted the need to
leverage output of the analytical works on the 40 sites to calibrate the grant structure for the PBG
interconnected mini-grids window and enable its roll-out by 2025. This is because (i) some projects
are already negotiated with the DISCOs by developers and will require incentives to reach financial
close and commence construction on the ground (ii) DISCO collaboration with the private sector
is very dynamic and flexibility should be allowed for private sector developers that successfully
secure projects with the DISCOs to participate on the DARES program without road blocks (iii)
Despite the gains of the MST process including its price discovery potential, the MST process
turnaround time could be lengthy even in the absence of delays and may not align with the urgency
required to drive the electrification agenda of the Federal Government of Nigeria.
12. The mission reiterated the need for regulatory waivers and fast-track processes for projects
under the DARES program whilst highlighting key risk areas that should be resolved in
advance with the DISCOs and other stakeholders. As larger projects are deployed under the
DARES program, regulatory waivers including raising the cap for mini-grid permit to 10MW and
agreeing on some potential issues with key stakeholders like the Federal Ministry of Environment
in advance is crucial to enable seamless and swift project roll-out under DARES. Some key areas
amongst others are (i) a clear regulatory guideline to determine and calculate the energy tariff
charge to the project developer for energy wheeled by the DISCOs to the ring-fenced project cluster
(ii) the Distribution Use of System (DUOS) fees payable by the project developer for energy
wheeled through the DISCO network (iii) the legacy debt recovery framework in the project cluster
post DER project commissioning (iv) Requirement of an ESIA for projects above 1MW, attendant
turnaround time, and potential impact on project development timeline as a result of the wet and
dry season assessment expectation.
13. The procurement process for the minimum subsidy tender (MST) for interconnected mini
grid commenced with the issuance of an Initial Selection Document (ISD). The ISD issued on
November 4, 2024 outlines eligibility criteria, technical and financial capability requirement
expected from prospective bidders. The application submission deadline is December 16, 2024.
Pre-qualified developers will be sorted into 2 tiers during initial selection step according to the
ability to execute Embedded Generation projects and larger portfolio of interconnected mini grids.
Embedded generation (EG) projects require additional financial and technical capabilities
compared to interconnected mini grid projects due to larger expected generating capacities.
Requirements have been designed to ensure selected bidders are well capitalized and can execute
the project lots.
4
14. Direct disbursement of grant due to a developer to a designated offshore account of project
developers and/or its third party financiers, investors or agents: Whilst direct disbursement to
offshore account is a practice acceptable to the World Bank and was implemented under the NEP,
it was unclear in the DARES project implementation manual (PIM) if this practice will allow grant
due to a developer to be assigned to a designated third party financiers, OEM, investor or parent
entities. Put differently, it was unclear if grant due to a developer could be disbursed to an offshore
account of a third-party entity designated by the developer to receive payments on its behalf. The
mission clarified the above with REA and guidance was provided that such arrangements are
acceptable to the government of Nigeria provided that relevant documentation were provided
including board resolution and deed of assignment. Thereafter, it was agreed that the clarification
provided will be detailed in the draft grant agreement currently undergoing the final stages of
review.
15. The mission team continued engagement with the Lagos State Ministry of Energy and
Mineral Resources on Solar roof top implementation in life saving critical public hospitals
across Lagos State. The mission team met with the Commissioner of Energy and members of the
Lagos State Electricity Board to discuss the implementation model options for solar roof top
deployment; emphasizing the need to pursue a sustainable delivery option under an “Energy As a
service” (EAAS) arrangement. The mission team assessed the DARES effectiveness preparedness
of the LSEB team and agreed with the LSEB team on timelines for the following critical activities:
(i) execution of the on-granting agreement with REA in two (2) weeks (ii) provision of an
organogram and staffing plan for the project implementation unit (PIU) by December 15, 2024 (iii)
confirm the suitability of the LASG e-procurement platform and possibility to integrate with
Odyssey platform in two (2) weeks. (iv) procurement of technical and transaction advisors for the
project sites tender process, PPA negotiations, project implementation supervision and hands-on
technical support by December 2024. The progression of the on-going technical assessments at the
hospital sites across Lagos State was also discussed.
Stand Alone Solar Component
16. The mission team reached agreement with REA on the grant design and delivery mechanism
for aspects of the Stand Alone Solar (SAS) component. The REA team utilized the output of
detailed analytical work including technical and market assessment to provide a grant framework
that fine-tuned and improved upon the OBF mechanisms under the NEP for standalone solar
system. Key features of the DARES grant framework agreed with REA include (i) a differentiated
OBF grant structure for solar home systems (SHS) with tiers of fixed incentives as a percentage of
retail price discounted uniformly and matched with reduced affordability in remote and more
vulnerable communities based on the SHS index (ii) a premium and incentive for PayGo sales as
compared to cash sales (iii) a proposed restructuring of the component to include solutions for
public sector institutions after first year of implementation.
17. Under the Stand-alone Solar component, the grant delivery mechanism for the Productive
Use of Energy (PUE) is still under further review. While subsidy will be allocated by
categorization based on appliance type, solar and system capacity, and price, with funds distributed
through PUE suppliers, the REA team recommended further analytical work and reviews that will
5
help provide detailed clarity on deployment framework. This deployment framework will guide a
phased and targeted approach with initial focus on demand clusters like markets, agro-processing
centers, and cottage industries whilst seeking synergistic opportunities with other World Bank
funded programs in the agro-processing and mobility sectors. These measures will assist to drive
sustainable energy access and support Federal Government of Nigeria’s economic growth
agenda and job creation. Further, the mission noted REA’s request to (i) consider interventions
in public health institutions under the existing solar-roof top sub-national intervention in
component 1 of the DARES program (ii) proceed with reverse auction for PUE equipment
focusing on matured technologies like solar water pumps, irrigation, and cold storage (iii)
mainstream Solar Business System (SBS) solutions under an energy-as -a-service (EAAS) or
other long term financing options arrangement targeting agro-clusters and MSME’s (iv)
explore emerging technologies like rural telephony and e-mobility (v) discontinue catalytic
grant window and reallocate funds to program components given already existing working
capital facilities in the ecosystem. REA and the mission agreed not to prioritize preparation of
a demand side subsidy program for now, given that the national social registry may not be
ready to be utilized, and instead rely on existing agencies like Nigerian Consumer Credit
Cooperation to bridge the affordability gap.
IV. SUMMARY OF PROGRESS TOWARDS DARES’ EFFECTIVENESS, KEY
DISCUSSIONS, AND AGREEMENTS
18. Subsidiary Agreement and on-granting Agreement: The mission noted that the subsidiary
agreement between the Federal Ministry of Finance and the Rural Electrification Agency of
Nigeria for the US$750 million was executed on July 18, 2024. Out of the program fund of
US$750 million, the REA has agreed to on-grant US$20 million to Lagos State Government
for the implementation of the solar roof top component in addition to a technical assistance
package. The on-granting agreement may possibly necessitate a future amendment to the
earlier executed financing agreement.
19. Project Implementation Manual (PIM): The PIM was adopted on 1 November 2024
technically ushering in the effectiveness of the DARES project. The World Bank internal
administrative steps are on-going to operationalize the project effectiveness, following the
countersignature of the letter for the loan reinstatement and declaration of effectiveness of the
Financing Agreement, on 15 November 2024.
20. Evaluation and Compliance Requirement: The mission team discussed with REA the
evaluation and compliance requirement for developers willing to participate on the DARES
program which largely mirrors that of the NEP program but with stricter measures including
(i) the requirement to provide a productive use strategy for each site application and
commitment to connect productive loads (ii) the requirement to include PUE and capacity
utilization threshold in the financial model accompanying business proposal and (iii) evidence
of state government approval for proposed projects in recognition of increasing roles of state
government under the Electricity Act 2023.
6
21. The National Electrification Strategy and Implementation Plan (NESIP) and Role of
States. The mission also discussed the role of States given the Electricity Act 2023. REA is
proactively coordinating with multiple stakeholders including the Presidency, the National
Economic Council (NEC) and the Nigeria Governors Forum (NGF) to discuss how this
transition will be managed, and technical assistance requirements. Further engagement was
expected to take place before the end of December 2024 to agree on templates that will be
shared to states, specifying baseline data requirements to serve as inputs to the NESIP. More
so, REA has commenced discussions with the Bank team on the Multi-Tier Framework
Assessment for nationwide collation of data in collaboration with the National Bureau of
Statistics (NBS). The outcome of this activity will serve as inputs to the NESIP and other
geospatial platform. The NESIP is the strategic document that will provide a clear road map
for achieving universal electrification of Nigeria. On a similar note, the procurement process
for the consultant that will assist with the NESIP preparation is at award stage and final
decision on the process will be made before the end of December 2024.
22. REA Business plan. A key issue of concern has been REA’s mandate and its institutional and
staffing capacity to fit into its elevated role of the apex electrification agency driving the FGN’s
universal access agenda. The mission team was informed of progress made in closing
institutional capacity gap and preparing a new business plan to meet the performance-based
condition (PBC) of the DARES program in record time. Competitive recruitment of a
consultant to assist with business plan have been concluded and consultant is scheduled to
commence work after aligning task outline with REA given evolving operational landscape.
23. Distributed Renewable Energy Enhancement Facility (DREEF): Programmed under
Component 3. Technical Assistance, Sub-Component 3.2: DARES Ecosystem and
Implementation of the DARES Project, DREEF - a partnership with InfraCredit - seeks to
operationalize an innovative model that will unlock, expedite, and scale access to long-term
local currency capital for DRE projects while propelling project developers up the RESCO
maturity curve, in a streamlined manner. It presents a first of its kind combined approach
towards targeting the technical, operational, and financial hurdles encountered along the
preparation, development, and construction phases of DRE projects to increase the flow of
local currency institutional investment and ultimately enhance DRE access in the country, at
scale. In discussions with InfraCredit, it is noted that the DREEF business plan and governance
structures have been finalized. Following effectiveness of the DARES project, and in
consultation with the REA, operational efforts will be triggered on a phased basis, focusing on
Sponsor Support and Development to strengthen the institutional, technical capacity and
corporate governance of DRE developers/sponsors in Nigeria.
7
24. Regulatory Cap of 1MW for mini grids: A detailed discussion was held with NERC and
REA on the case to increase regulatory capacity cap for mini grids from 1MW to 10 MW.
NERC team noted some concerns constraining their desire to grant the request as follows (i)
the electricity law in Nigeria mandates a license to be issued for projects above 1MW and not
a permit (ii) altering this requirement will require a parliamentary approval and amendment to
the law. (iii) the compliance requirement - technical, environmental, and social safeguards for
projects above 1 MW are more stringent to guarantee health and safety in communities where
the projects are deployed. (iv) The financial implication of these compliance requirement may
be burdensome for mini-grid developers and could translate to high tariff for end-users.
However, given the strategic objectives of the government of Nigeria and the need to scale the
deployment of grid connected DER’s to keep the lights on in the event of national grid
dysfunction, the NERC team are in the process of granting regulatory waivers by increasing
the capacity cap for mini grids to 10MW. Whilst this will be applicable to only grid connected
DER projects deployed under the DARES program, this regulatory waiver will be subject to
REA demonstrating that (i) the selected sites for grid connected DERs under the DARES
program has load demand in excess of one (1) mega-watt (ii) there is sufficient funding under
the DARES program to cater for the grant incentives to finance, build and operate these large
projects via private sector led efforts (iii) the project’s technical requirements and service
standards complies with the grid code.
V. NEXT STEPS
25. Action Plan. The agreed Action Plan for DARES and NEP is presented in Annex A. The
Action Plan will be monitored through weekly and bi-weekly meetings with relevant
stakeholders.
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Annex A: Agreed DARES and NEP Action Plan
DARES ACTION PLAN
# Action Responsibility Deadline
General
1 Counter-sign the memo reinstating the financing agreement and declaration of DARES FMOF, REA Earliest date
effectiveness
2 Conclude the grant agreements and data sharing agreement for all program components REA November 15, 2024
3 Clarify working relationship between REA and LASG REA, LASG November 30, 2024
4 Execute on-granting agreement between REA and LASG REA, LASG December 15, 2024
5 Conclude procurement process for consultants that will assist with the NESIP REA, World Bank November 30, 2024
6 Finalize on state government engagement templates in preparedness for DARES REA, World Bank November 30, 2024
effectiveness
7 Firm-up arrangements with strategic communications team to support public and social REA November 15, 2024
media campaign for the DARES program components
8 Facilitate meeting with Dalberg to align on task outline for the REA Business plan World Bank December 20, 2024
given changing operational landscape
9 Clarify direct disbursement clause and include in the DARES grant agreement REA November 15, 2024
Solar Hybrid Mini-grid component
10 Commence site assessment activities for isolated mini grids for an MST process REA November 30, 2024
leveraging data from synergistic programs like Energizing Economies targeting demand
and productive use clusters that aligns with government economic growth agenda.
11 Commence procurement document preparation for the RFP stage of the MST for REA, RMI, World Bank, November 30, 2024
interconnected mini grids DISCOs
12 Conclude 1st Phase of technical assessment activities for the initial 40 sites selected for REA, RMI December 31, 2024
the MST process
13 Commence analytical work and sensitivity analysis to optimize grant amount, project REA, RMI, INENSUS November 30, 2024
cost and tariff for final subsidy determination under the PBG window for interconnected
mini grids
14 Revert to the World Bank with PIU organizational structure, staffing plan and LSEB November 30, 2024
qualifications of PIU staff
15 Commence procurement of technical/ transaction adviser for the solar roof top LSEB December 31, 2024
implementation.
16 Confirm the suitability of the LASG e-procurement platform and assess possibility to LSEB, World Bank November 30, 2024
integrate with Odyssey platform.
9
17 Clarify E&S compliance requirements for sites selected under DARES MST program REA E&S team, World November 15, 2024
and outline strategies to engage stakeholders and manage potential risk areas where Bank, RMI
requirements could impact project implementation timelines
Stand Alone Solar (SAS) component
18 Review the reverse auction framework for PUE and align with government priority to REA, OCA November 30, 2024
electrify productive use clusters and demand centers
19 Draft TOR to develop a reverse auction framework for PUE and align with government REA, World Bank December 6, 2024
priority to electrify productive use clusters and demand centers
20 Award contract to a qualified consultant to develop a reverse auction framework for World Bank January 15, 2025
PUE
21 Agree on scope for further analytical work on solar business systems and emerging PUE REA, World Bank December 6, 2024
technologies to inform the design of subsequent windows under this component, and
draft TOR
22 Award contract to a qualified consultant for an assessment of emerging PUE World Bank January 15, 2025
technologies and solar business systems
10
NEP ACTION PLAN
Action Responsibility Deadline
General
1 Provide a post project procurement report documenting activities completed, activities REA November 30, 2024
pending, and lessons learnt
2 Prepare a payment/disbursement schedule and submit to the Bank before project closing date REA December 31, 2024
3 Ensure that all invoices from consultants and performance guarantee for closure Audit are REA December 31, 2024
delivered to the Bank
4 Ensure that all expenditures incurred are documented and reflected on client connection to REA November 30. 2024
confirm eligibility of expenditures
5 Prepare a schedule of outstanding works under EEP Phase II component and projected REA November 23, 2024
completion timeline to enable comprehensive review of E&S aspects of outstanding activities
6 Resolve deficiencies in Q3 IFR and timely submission of Q4 2024 IFR. REA Project Accountant February 15, 2025
7 Periodically submit Withdrawal applications to document advance received. REA Project Accountant April 30, 2025
8 Resolve remaining issues in 2023 audit review letter. REA Project Accountant June 30, 2025
9 Submit final audit of the project covering 14 months (January 2024 to April 30, 2025) REA Project Accountant June 30, 2025
Energizing Education Project (EEP) Phase II
10 Complete all outstanding works (Lot 1 - University of Abuja) REA, EPC contractor November 30, 2024
11 Complete all outstanding works (Lot 2 - Micheal Okpara University of Agriculture Umudike) REA, EPC contractor November 30, 2024
12 Complete all outstanding works (Lot 3 - University of Calabar & Teaching Hospital) REA, EPC contractor November 30, 2024
13 Complete all outstanding works (Lot 4 - University of Maiduguri & Teaching Hospital) REA, EPC contractor November 30, 2024
14 Complete all outstanding works (Lot 5 - Federal University of Agriculture Abeokuta) REA, EPC contractor November 30, 2024
15 Complete all outstanding works (Lot 6 - Federal University Gashua) REA, EPC contractor November 30, 2024
16 Complete all outstanding works (Lot 7 - Nigeria Defense Academy) REA, EPC contractor November 30, 2024
11
ANNEX B
List of Officials and Counterparts Met
REA
Name Title
Abba Aliyu Managing Director/CEO
Umar Abdullahi Executive Director Technical Services
Selbyen Gambo Senior Advisor, Office of the MD/CEO
Ebun Mesaiyete Senior Advisor, Office of the MD/CEO
Muzzamil Waziri Technical Advisor, Office of the MD/CEO
Edith Ibeh Head Protocol
NEP PMU
Name Title
Olufemi Akinyelure Head, Project Management Unit
Hadiza Katagum Project Manager, PBG/Acting Component Lead, Mini Grid
Lande Abudu Component Lead, SHS
Engr. Joro Sallau Component Lead, EEP
Clinton Amaji M & E Specialist
Tunde Seriki Procurement Specialist
Blessing Agbabokha Project Accountant
Engr. Jaafar Dikko Senior Technical Design Expert
Engr. Timothy Shekarau Senior Technical Advisor
Susan Igata Social Specialist
Michael Okoh Environmental Specialist
Chinonso Njoku Liaison Officer EEP
Tosin Ipaye Project Officer EEP
Chidera Achinanya Data Management Officer EEP
Bello Salman Senior Technical Project Manager
Tobi Ogunlesi Project Manager OBF SHS
Nabila Maida Data Analyst SHS
Olakunle Owoeye Technical Specialist
Stanley Onwunumah Project Manager, COVID 19 & beyond
Paul Iyogun Project Manager MST
Michael Peter Private Sector Liaison, Mini Grids
Ali Lawan Internal Auditor
Muheez Dawodu Desk Officer at NERC
Odegua Ofoegbu Due Diligence Officer at NERC
Atinuke Odofin Partner ALP
Adejoke Odumosu Project Intergovernmental Relations Lead
Abdulganeey Opeloyeru Project Procurement Officer
Nkeiruka Ekenwa-Charles Project Finance Officer
Okekene Chimaobi Asst. Project Accountant
Makinde Vivian Ejiro Finance Support
Ikenna Obi-Emeruwa Procurement Data Filing Officer
12
Name Title
Khadija Imam Procurement Support
Umar Jega Procurement Support
Suleiman Gimba Financial Support Officer
Gbolahan Temilorun Ministry of Environment Portal Management Officer
Elisha Awojuola Ministry of Environment Portal Management Officer
Abdullahi Sulaiman DISCO & Stakeholder Engagement Consultant
NERC
Name Title
Abba Ibrahim Terab Deputy General Manager, Markets Rates and Competition
Abdulsalam Yusuf Deputy General Manager, Planning, Research and Strategy
Friday Sule Assistant General Manager, Markets Rates and Competition
Olisa Chukwuma Senior Manager, Markets Rates and Competition
Sharfudden Mahmood General Manager, Market Competition and Rates
Chigozie Azikiwe Assistant General Manager, Market Analysis and Competition
Chinedu Onyegbule Market Analysis and Competition
Ibrahim Tajudeen Principal Manager, Tariffs and Rates
Muhammad Yadudu Principal Manager, Market Competition and Rates
Ministry of Energy and Mineral Resources, Lagos State
Name Title
Mr. Biodun Ogunleye Honorable Commissioner of Energy
Engr (Mrs.) Abiola Kosegbe Permanent Secretary
Engr. Salako Senior Special Adviser on Energy
Ajibola M.A Assistant Director, Power
Amodu Titilola M. Assistant Chief Geologist
Lagos State Electricity Board
Name Title
Engr. K.A.T. Balogun General Manager
Adesokan Esther O. Assistant Director, Procurement
Adetokunbo Ladeja Assistant Director, Legal
Engr. Babalola A.M. Deputy Director, Renewable
Olukoya Mariam Team member, Power Department
Adekemi Adeniji Adams Assistant Director, Power Department
Hafeez Momoh Head of Department, Power
Engr. Orunsolu G. A. Power Department
Oseni Wahab S.A. Power Department
German Development Agency (GIZ)
Name Title
Heine Eckhard Head of Component, Sustainable Energy Access
Sharon Kaburuk Head of Component, Capacity Development
Alexander Akolo Technical Advisor, Sustainable Energy Access
13
Jennifer Oluchi Francis Technical Advisor, Sustainable Energy Access
Ifeoma Obiasogu Technical Advisor, Electrification Planning and Data
Management
Victor Chimere Technical Advisor, Sustainable Energy Access
The World Bank Group Task Team
Name Title
Arsh Sharma Senior Energy Specialist, TTL
Ashish Shrestha Energy Specialist, Co-TTL
Collins Chukwuma Obi Energy Specialist, Co- TTL
Arigu Kudu Financial Management Specialist
Akeem Bello Procurement Specialist
Christopher Mays Johnson Senior Social Development Specialist
Elijah Abiodun Siakpere Senior Social Development Specialist
Lucky Erhaze Environmental Specialist
Hadija Kamayo Senior Financial Sector Specialist
Ifunanya Nwandu Consultant
Olateju Abimbola Senior Investment Officer, IFC
Hanning Bi Investment Officer, IFC
Sarah Afridi Investment Officer, IFC
Ufang Ufang John Team Assistant
In addition, the Task Team attended workshop sessions and pre-application meeting with
representatives of the following organizations and entities:
- Representatives of RMI
- Representatives of Infracredit
- Representatives of Odyessy Energy Solutions
14
ANNEX C
Distributed Access through Renewable Energy Scale-up (DARES) Project
Virtual Roundtable/Workshop
November 6- 7, 2024
I. Participants
The Roundtables/Workshops were attended by private sector developers, OEMs, EPC contractors,
investors, financiers and other stakeholders from the public and private sector. Over 1,100
registrations were recorded, but not all interested parties were able to join due to the maximum
capacity caps of the online meeting platforms. The number of unique participants for each session
are presented in the table below:
S/N Session Number of participants
1 Stand Alone Solar (SAS) Component – Solar Home Systems 740
2 Isolated Mini Grids 500
3 Interconnected Mini Grids and Pre-application meeting/workshop 500
The pre-application meeting for the MST for interconnected mini grid is a requirement of a
competitive procurement process that commenced on November 4, 2024, and answers to all
questions raised during the sessions will be collated, published on the Odyssey procurement
platform and disseminated to attendees of the pre-application meeting. Furthermore, the recordings
of all sessions and presentations utilized therein will be circulated to all attendees.
II. Agenda
Day 1 – Wednesday, November 6, 2024
Session 1 - Stand Alone Solar (SAS) Component – Solar Home Systems
Time Activity Speaker
10:00-10:05 5 Mins Welcome address/Opening remarks Abba Aliyu, MD/CEO REA
10:05-10:15 10 Mins Presentation of DARES Overview Femi Akinyelure, Head of NEP Project
Management Unit, REA
10:15-10:35 20 Mins Presentation on the DARES SAS Lande Abudu, Stand Alone Solar System
Component (SHS) Component Coordinator, NEP REA
10:35-10:55 20 Mins DEMO of SAS Geospatial mapping and Nabin Raj Gaihre, Co-founder of VIDA
grant rate
10:55-11:15 20 Mins DEMO of Project Management Platform Susan Smith, Vice President, Concessional
Finance Solutions, Odyssey Solutions
11:15-12:00 45 Mins Q&A Session Tobi Ogunlesi, Project Manager SHS, NEP
REA (Anchor)
Session 2 – Isolated Mini Grids
15
1:00 – 1:25 25 Mins Presentation on the NEP Legacy projects Hadiza Katagum, Mini Grid Component
and DARES Isolated Mini Grid Coordinator, NEP REA
Component
1:25 – 1:45 20 Mins DEMO of Mini grid Geospatial mapping Nabin Raj Gaihre, Co-founder of VIDA
and site analysis (Including Mesh Grids)
1:45 – 2:05 20 Mins DEMO of Project Management Platform Susan Smith, Vice President, Concessional
Finance Solutions, Odyssey Solutions
2:05-2:55 50 Mins Q&A Session Stanley Onwunumah, Project Manager
Mini Grid, NEP REA (Anchor)
2:55-3:00 5 Mins Closing Remarks Femi Akinyelure, Head of NEP Project
Management Unit, REA
Day 2 – Thursday, November 7, 2024
Interconnected Mini Grids Pre-Application Workshop
Time Activity Speaker
1:00 – 1:10 10 Mins Welcome address/Presentation of Abba Aliyu, MD/CEO REA
DARES Overview Femi Akinyelure, Head of NEP Project
Management Unit, REA
1:10 – 1:30 20 Mins Presentation on the DARES Paul Iyogun, Project Manager Mini Grid,
Interconnected/MST-IMG Pre-Bid NEP REA
Application Rep from RMI
1:30 – 1:50 20 Mins DEMO of Project Management Platform Susan Smith, Vice President, Concessional
Finance Solutions, Odyssey Solutions
1:50-2:55 55 Mins Q&A Session Susan Igata, Senior Social Specialist, NEP
REA (Anchor)
2:55-3:00 5 Mins Closing Remarks Femi Akinyelure, Head of NEP Project
Management Unit, REA
16
ANNEX D
Detailed Financial Management (FM) discussion during the Implementation Support
Mission (ISM)
•FM staffing. FM staffing under this project consist of 1 Project Accountant, 1 Assistant Project
Accountant, 1 Finance officer, 1 Internal Auditor and support staff. The FM staff are academically
and professionally qualified and are performing satisfactorily. Staff turnover on the project is low.
FM staff working on this project perform their function effectively, but the accountant needs to
prepare more IFRs. The mission noted that the internal auditor will be retiring from government
service in November 2024. Arrangement needs to be put in place to replace him to ensure internal
audit function on the project does not suffer. There exists adequate coordination between the FM
team and the project team members.
•Financial Reporting and Budgeting. The discussion held confirmed that the project uses
flexible accounting software to prepare its interim financial reports (IFRs). The quarter 3 IFR
delivered to Bank was accepted, but deficiencies were noted in the uses of fund by project activity,
hence the variances in the report cannot be relied upon, including deficiency in the sources and
uses of fund. The accountant who provides FM support to the project could not exercise due
diligence in ensuring that budgeted figures are inputted in uses of funds by project activities and
accuracy of financial data before uploading the IFR in client connection, resulting in poor quality
IFR. The accountant was advised to ensure that IFRs prepared are reviewed by the federal project
financial management department (FPFDM) for quality review before submitting to the Bank. The
Bank discussed the identified challenges with the accountant to ensure that high quality and
acceptable IFR is delivered in quarter 4, by February 15, 2024. The Bank will monitor to ensure
this is done. The mission noted that implementation of activities has continuously been based on
the 2023 updated and approved work plan and Bank’s No Objections obtained for activities not
included in the workplan.
•Accounting and Records Keeping. The mission confirmed that flexible accounting is being used
to post financial transaction, and maintenance of financial record meets the need, size and
complexity of the project. The meeting noted that project expenditures are coded using charts of
accounts, and financial data are backed up in web cloud with IT supports. In addition to the back-
up supports, records are well-kept manually to safeguard against loss of data in the accounting
software. The mission encouraged the FM staff to ensure that accounting records such as the
accounting software, cash books, bank statements including reconciliation, and fixed assets
register are regularly updated as part of their routine function.
•Internal Control and Internal Audit. The discussion noted that internal control on the project
need to continuously be strengthened. The accountant confirmed that there is adequate segregation
of duties, approval and authorization, and that the internal control process complies with the
project’s legal requirements. Also, the accountant confirmed that the FM manual prepared by the
government and the Bank is in place and is being complied with by the project in the daily financial
operation. The mission established that oversight internal audit function on the project is
inadequate. At the time of this discussion, the mission noted that the Q2 project’s internal audit
17
report was finalized only on August 19, 2024. The internal auditor who provides oversight internal
audit function on the project does not pay attention to meeting deadlines, resulting in the delay in
preparing internal audit report, thereby not adding value to the project. The need for Q3 internal
audit report that will be due by November 14, 2024, to be prepared and a copy of it shared with
the Bank by the deadline via email was emphasized. The FM team of the Bank will monitor this
to ensure there is compliance by the internal auditor.
•Funds Flow: Funds flow from the Bank to Project is adequate. As of November 8, 2024, with
less than two months (December 31, 2024) to project closure, overall amount disbursed to the
project was US$272,096,635.88 (84.6%) of total credit of $321,443,776.00. The project is
encouraged to fast track the implementation of activities to ensure 100% disbursement of allocated
fund. The mission noted that issues identified in the last FM mission report, such as the wrong
credit of $2,371.544.62 to the project account by the CBN, since December 2023, was reversed on
September 2, 2024, bringing this matter to a close; this was confirmed through the project’s Bank
statement shared via an email with the Bank on September 19, 2024, and the balance of
N204,320,301.42 in the drawdown account meant for payments to contractors of some Nigerian
Universities for energizing evaluation program (EEP) including payment of outstanding taxes has
been utilized for intended purpose. Furthermore, the need for the project to periodically submit
withdrawal applications to document advances from the Bank by application deadline of April 30,
2025, was emphasized.
•External Audit. At the time of this discussion, the accountant confirmed that one of the issues
noted in the 2023 audit review letter, that is, the differences that exists between the closing balances
of 2022 audit and the opening balances in the 2023 general ledger remained unresolved. The
mission noted that the accountant did not pay attention to ensuring that this matter was resolved.
The need to ensure this is resolved by December 31, 2024, and handled in 2024 audit with external
auditors was stressed by the Bank. Considering that the project will close on December 31, 2024,
it was clarified that the project could deliver to the IDA final audit for period covering of January
2024 to April 30, 2025 (end of grace period) by June 30, 2025. It was further clarified that since
NEP is a federal project, to avoid the challenge of opening escrow account in CBN, it is appropriate
for the project to obtain a Bank guarantee from the auditors by the closing date for the final audit
to conducted as required. The FM team will monitor this process and follow up with the project to
ensure timely submission of the remaining audit report.
18