In a recent conversation, industry leaders from the energy and agriculture sectors emphasized the importance of closer collaboration to better support rural communities. Habiba Ahut Daggash, Andrew Allee, and Zihe Meng shared their insights following a visit to Sa’achi Nku in Niger State.
During their trip, the team discovered that despite the community’s access to 24/7 electricity, many local businesses were struggling to thrive. They observed a number of old and inefficient diesel rice mills scattered throughout the area, none of which were operational, even with abundant rice paddy available. A local technician explained that rising fuel costs, compounded by the removal of subsidies and currency devaluation, made it financially unfeasible to operate these mills. While there are alternatives using cheaper electricity, local processors were unaware of these options and lacked the income or credit access to invest in new machinery, which could cost ten times their monthly earnings. As a result, they continued using outdated mills that produced low-quality rice, making it hard to find markets in urban areas.
Sa’achi Nku is one of nearly 200 communities that have been electrified with solar minigrids by the Rural Electrification Agency (REA) since 2017. Residents, mainly rural farmers, face significant challenges in accessing modern agricultural equipment. The Energizing Agriculture Programme (EAP) has identified several key obstacles: a lack of equipment suppliers with rural supply chains, limited access to affordable micro-loans for unbanked individuals, and insufficient local technicians for maintenance services.
The EAP, a collaboration between the REA and the energy nonprofit RMI, set out to tackle these issues. By bringing together companies from the energy, agriculture, and financial services sectors, the program aimed to develop solutions that would help rural entrepreneurs access and eventually own efficient agricultural machinery over time. The initiative tested these solutions by providing entrepreneurs with minigrid-powered equipment, including walk-in cold rooms, rice mills, corn threshers, electric bikes, soybean grinders, and a small oil palm factory. Beneficiaries were charged modest monthly fees for equipment usage until they could afford the upfront costs.
After one year, transitioning from fossil fuel-powered machines to electric alternatives resulted in energy cost savings of up to 80% for entrepreneurs. Many of the new machines not only increased their output but also produced higher-quality products. For example, a solar-powered oil palm factory in Adebayo, Edo State, generated an additional 57 liters of palm oil per ton of fruit compared to local artisanal mills, representing a 50% increase. In another instance, a cold room in Kiguna, Nasarawa State, successfully saved over a ton of fish from spoiling. The EAP’s investment in 36 pieces of equipment created 70 direct jobs and generated $110,000 in agricultural commodities across 17 communities, signaling a significant opportunity for value creation within Nigeria’s rural economy.
Beyond economic support, successful agribusinesses have also contributed to increased electricity sales for local utilities operating the solar minigrids. These utilities historically struggled with low sales volumes as customers could only afford to purchase limited electricity each month. However, the growing power demand from agribusinesses has strengthened the financial position of rural utilities, allowing them to reduce electricity prices and extend services to additional communities.
The achievements of the Energizing Agriculture Programme illustrate that sustaining rural agribusinesses depends on a coordinated network of service providers capable of offering affordable energy, credit, efficient equipment, and maintenance. Unfortunately, current initiatives from federal and state ministries of agriculture, along with development partners, often work in silos. Clean energy and agricultural projects for rural areas are usually planned and executed separately, which hampers innovation that could reduce energy costs, minimize pollution, and increase business profitability. Additionally, fragmented agricultural interventions are at risk of failure due to the high costs tied to fossil fuels—an issue that solar energy could successfully address.
It is imperative for government and development partners to rethink how energy is utilized in their projects and strive to create the most beneficial solutions for those in need. There is an urgent necessity to explore how renewable energy can serve as a viable alternative to rising fossil fuel prices. Furthermore, the government must implement policies designed to lower market costs for these technologies, which could involve streamlining the import process and eliminating customs duties on components for renewable energy systems.
The African market for productive energy applications, which includes integrated energy-agriculture solutions, is valued at $120 billion. The experiences from the EAP emphasize the significant potential for job creation and the enhancement of Nigeria’s agricultural production and exports—key objectives for the current administration. To fully tap into this potential and advance rural economic development, it is essential for stakeholders in the energy and agriculture sectors to collaborate more effectively.
