The African Development Bank (AfDB) has kicked off a feasibility study to explore the potential of electricity cooperative business models in Nigeria and Ethiopia.According to the bank’s statement released on Saturday, the effort is part of the AfDB’s goal of achieving universal electricity access across Africa by 2025.
Currently, power shortages diminish the region’s GDP growth by 2 to 4 percent per year, holding back job creation and poverty reduction efforts.
According to the bank, the study funded by the South-South Cooperation Trust Fund, will be conducted by the National Rural Electric Cooperative Association (NRECA) over three months.
NRECA will consider regulatory, legal, technical and socio-economic factors that impact the creation of electric cooperatives in the two nations, it was learnt.
The bank announced the electricity cooperatives are tax-exempt businesses set up and owned by the consumers who benefit from the services provided in generation, transmission and/or distribution.
It was stated that they are used in many parts of the world to provide last mile connections to rural areas through grid extensions and cooperative enterprises.
Speaking at the kick-off meeting, the bank’s Director of Power Systems Development, Batchi Baldeh, said that the study is timely and aligned with its new deal for energy in Africa.
Underscoring the importance of government cooperation and commitment, he added that the cooperatives rely on strong partnerships among governments, rural or local communities and development partners for implementation and success.
“We selected Nigeria and Ethiopia following dialogue with their respective ministers of Energy during the bank’s Africa Energy Market Place held in July 2018, where they expressed their governments’ commitment to improve rural access through established models,” he said.
He noted that the bank rely on the cooperation to explore the innovative model of delivering our High 5 to light up and power Africa.
Findings of the study will be delivered in May this year.