In a bold move to address Nigeria’s persistent electricity challenges, Kano Electricity Distribution Company (Kano Disco) is actively pursuing a $200 million investment to upgrade its infrastructure, promising to transform electricity distribution for approximately 25 million Nigerians. The initiative, backed by core investors, aims to not only enhance the efficiency of power delivery but also introduce sustainable and environmentally friendly solutions to a region heavily reliant on diesel and small petrol generators.
Strategic Partnership with BlackAion Capital
Exclusive details revealed by BusinessDay highlight Kano Electric’s strategic partnership with BlackAion Capital, a Mauritius-based firm. Together, they are working to secure the $200 million fundraise, specifically targeting interconnected mini-grids and embedded generation projects in Kano, Katsina, and Jigawa States. The collaboration aims to tackle the challenges posed by insufficient grid supply and the prevalent use of inefficient power sources in the region.
Okwu Njoku, Managing Partner at BlackAion, expressed enthusiasm about the investment, stating, “We believe Kano’s network is the most exciting network for investment, not just in Nigeria but in Africa.” Njoku emphasized the urgency of addressing the environmental impact of inefficient power distribution, asserting that Kano’s potential for green investment is unparalleled.
Ambitious Plan for Incremental Capacity
The ambitious plan outlined by Kano Disco’s core investors envisions building at least 200MW of incremental capacity through the establishment of a minimum of 100 mini-grids and embedded generation projects. These projects are strategically positioned to enhance electricity supply in Kano, Katsina, and Jigawa States. Adamu Gumel, Chairman of Kano Disco, highlighted the commitment to prioritize bulk grid supply to industrial consumers while concurrently deploying interconnected mini-grids to augment electricity supply for consumers.
“We are looking at some of our key industrial clusters such as Tokarawa and Sharada for 24-hour supply through embedded generation,” Gumel added, emphasizing the focus on industrial areas for uninterrupted power supply.
Green Energy Transformation: The First “Green DISCO in Africa”
The new core investors in Kano Disco are signaling their intent to make it the first “Green DISCO in Africa.” This vision involves leveraging Embedded Solar Hybrid Power Plants, mini-grids, Energy Storage Systems (ESS), and Power Purchase Agreements with generators providing clean energy, such as nearby hydro-power plants. The strategic incorporation of sustainable energy solutions underscores a commitment to environmental responsibility while addressing the critical need for reliable power supply.
Habib Daura, a representative from the new core investor, Future Energies Africa, and director on the Board of Kano Disco, emphasized ongoing discussions with institutional investors and the Governments of Kano, Katsina, and Jigawa to re-capitalise and re-position the entity as the best-performing DISCO in the country. This collaborative effort reflects a concerted push towards efficiency, sustainability, and excellence in power distribution.
Navigating Tariff Challenges: A Shift towards Liberalized Models
Against the backdrop of a lack of central direction on electricity tariffs, findings from BusinessDay reveal that many Distribution Companies (DisCos) in Nigeria are exploring more liberalised models of supply. With a focus on willing-buyer, willing-seller approaches, these DisCos aim to drive efficiency in the absence of clear tariff guidelines. The evolving landscape signals a shift towards greater autonomy and market-driven dynamics in the electricity sector.
In conclusion, Kano Disco’s pursuit of a $200 million investment marks a significant stride towards transforming Nigeria’s electricity landscape. The strategic partnership with BlackAion Capital, coupled with the ambitious plans for sustainable energy solutions, positions Kano Disco as a trailblazer in the quest for efficiency, resilience, and environmental responsibility. The commitment to becoming the first “Green DISCO in Africa” underscores the transformative potential of this initiative, offering a beacon of hope for improved electricity access and reliability for millions in the region.
Source: Business Day