Can the Use of Small Hydro Plants (SHPs) be the Solution to

Rural Electrification in Nigeria?


Osasohan Agbonlahor
PhD Student/Graduate Research Assistant
University of Nevada, Reno


This study aims to analyse the use of SHPs and Energy Kiosks which have been successfully executed in rural villages in Tanzania and Mali and examine whether these systems can be implemented in rural villages in Nigeria to improve rural electrification in the country. The methodology employed is the use of descriptive analysis of data relating to Nigeria’s electricity sector from relevant agencies. Also, a review of the strategies and execution of SHPs and Energy Kiosks in rural communities as recommended by UNIDO shall be examined to determine its suitability and feasibility in rural communities in Nigeria.

The link between better access to electricity and achievement of the Millennium Development Goals (MDG) has long been recognized as an integral part of national planning of countries all over the world. However, current statistics reveal that over 1.5 Billion people or 21% of the world’s population are without access to electricity[1]. Nigeria ranks 4th in the world in terms of number of people without access to electricity, with an estimated 76 million of its population without access to sustainable access to electricity[2]. The problem is particularly severe in the rural areas as World Bank (2010), estimates that only 34.58 percent of its rural population have access to electricity. Meanwhile, the rural population constitutes 51.26 percent of the total population with an annual estimated growth rate of 1.09 percent.

Previous attempts at improving rural electrification in Nigeria have so far failed to achieve any appreciable results. Meanwhile, Small Hydro Power (SHP) and “Energy Kiosks” have been used in rural villages in Tanzania, Mali and other developing nations under the supervision of UNIDO to achieve substantial improvements in rural electrification. China supplies over 300 million of its population with electricity generated from SHPs, generating over 28.5 MW of electricity from the scheme annually[3]



Access to electricity is essential for the socio-economic development of a country and there is a nexus between greater access to electricity by the population and poverty eradication in that country. This has been identified as one of the reasons behind the high poverty rate in Nigeria and other sub-saharan African countries where the electrification rate is exceedingly low.

In Nigeria, over 50.2 percent of the population are rural dwellers. 70 percent of this rural population are without access to electricity. As shown in Figure 1, the net effect is that the poverty headcount ratio of the rural population is 63.8 percent[4]. On the other hand, 84 percent of the urban population in Nigeria have access to electricity and the effect is that only 43.1 percent of the urban population live below the poverty line. In total, 50.6 percent of Nigeria’s population have access to electricity, leaving 49.4 percent of the population without access to electricity, with the poverty headcount ratio of the country being 54.7 percent.[5] Therefore, the low access to electricity in Nigeria is invariably linked to the high poverty rate in the country and improving access to electricity will inversely reduce the poverty ratio in the country.


Figure 1: Population without access to electricity in Nigeria (%) 

Source: World Bank data African Development Indicators (2010)


Rural-Urban dichotomy in access to electricity in Nigeria

The rural-urban dichotomy in the access to electricity situation in Nigeria is represented in Figure 1. Though the percentage of rural population in the country (50.2 percent) is fairly equal with the percentage of urban population (49.8 percent), a higher percentage of the rural population(70 percent) lack access to electricity than in the urban population (26 percent). Two factors are responsible for this dichotomy. Firstly, there is concentration of the grid networks for supply of electricity in urban areas leaving the majority of the rural population without access to grid network and consequently without access to electricity.  In 1999, the Nigerian Power grid serviced 34 percent of the population, with only 19 percent of the grid connecting rural communities while 81 percent was located in urban areas of the country.[6]

Secondly, the poverty ratio in rural areas is higher than the poverty ratio in urban areas. Therefore, a large percentage of poor households in rural communities connected to the national grid are too poor to afford the connection charges and the electricity tariffs. Consequently, they resort to biomass for their cooking, lighting and heating purposes.

Nevertheless, the heavy reliance on biomass for cooking is not limited to the rural areas or areas without electricity as statistics reveal that even in urban areas, there is heavy reliance on biomass for cooking, owing largely to the erratic nature of electricity supply from the public electricity supplier[7].


Sustainability objectives of access to electricity

The issue of access to electricity is not restricted to access to grid network for public supply of electricity or mere ability to have access to some form of electricity supply whether on-grid or off-grid. WEC 2010[8] espoused three sustainability objectives for determination of access to electricity coined the 3 A’s. Accessibility, Availability and Acceptability. Accessibility to modern, affordable energy for all; Availability in terms of continuity of supply and quality and reliability of service; and Acceptability in terms of social and environmental goals. Therefore, access to electricity will entail that a minimum level of electricity is available at prices that are affordable (low enough to meet the needs of the poor) and sustainable (cost reflective of the full marginal costs of production, transmission and distribution of electricity by the supplier). Furthermore, such supply of electricity must be continuous, sufficiently reliable and above a minimum quality as to avoid disruption of economic activities. Finally, supplying the electricity must be done in an ecologically friendly way, which addresses public perception to the issues of deforestation, land degradation or soil acidification in the course of supplying the electricity[9].

Re-evaluating the problem of access to electricity in Nigeria within the above context, the country is quite low in achieving the 3 A’s as the electricity sector in the country falls far short of the requirement of supplying sustainable electricity that is acceptable, available and reliable. Even within the 50.6 percent of the population that have access to electricity in the country, electricity supply is mostly erratic, inconsistent and of unusually high or low voltage while black outs and brown outs frequently occur, with a large percentage of the population having to rely on private generators to supplement the unreliable public supply.[10] The report of the vision 20:2020 committee set up by the government revealed that a total of 40 percent of households that have access to the national grid supplement their access to public supply of electricity with private generators while 3 percent completely relied on private generators to save themselves from intermittent electricity supply[11].

Furthermore, government’s subsidy of the electricity sector in a bid to reduce tariffs distorts the market, making electricity tariffs not cost reflective of the marginal costs of production.[12] This is not sustainable in the long run. Between 2008 and 2011, over 1.1 billion dollars was spent by the government in subsidizing the cost of electricity supply to consumers.[13] This distortion in the price of electricity arising from government’s subsidy makes the supply of electricity in the country not sustainable as it becomes unattractive to potential private investors.


Table 1: Percentage Distribution of Households without access to electricity in the six geo-political Zones in Nigeria in 2007 and 2008


GEO-POLITICAL ZONE                                                 2007                                               2008

North West Zone                                                              54.73%

(Sokoto, Katsina, Kebbi, Zamfara

Kano and Kaduna States)


North East Zone                                                               68.22%

(Jigawa, Bauchi, Gombe, Yobe,

Borno, Adamawa and Taraba States)

                       69.42 %

North Central Zone                                                          55.5%

(Niger, Kwara, Federal Capital Territory,

Nassarawa, Plateau and Benue States)

                       61.8 %

South West Zone                                                              26.21%

(Oyo, Ogun, Osun, Ondo, Ekiti

And Lagos States)

                        27.99 %

South East Zone                                                               38.76%

(Enugu, Anambra, Imo, Abia

And Ebonyi States)

                        36.48 %

South South Zone                                                             30.21%                             

(Bayelsa, Rivers, Cross River

Akwa Ibom, Edo and Delta States)

                        32.49 %


Source: NBS/CBN/NCC Social-Economic Survey of Nigeria (2008)



From Table 1, it can be seen that access to electricity in the country is so poor that as high as 69.2 percent of households in the North East Zone lack access to electricity. In Taraba and Yobe states in the North East zone, as high as 91 percent and 82.9 percent[14] respectively of the households did not have any access to electricity in 2007 while Lagos state in the South West has the best figure for access to electricity as only 0.2 percent of the households were without access to electricity in 2007.

The rural-urban dichotomy in electricity access is also reflected in the breakdown of zones without access to electricity in the country. The North East zone of the country which has the highest concentration of rural areas in the country has the highest percentage of households without access to electricity while the South West Zone with a relatively higher concentration of urban areas has the lowest percentage of population without access to electricity.


Impact of poor and unreliable supply of electricity on various sectors of the country

Lack of access to electricity adversely affects the economy and stunts the socio-political development of the country. The impact of inadequate and unreliable supply of electricity in Nigeria can be felt in the following ways:

Industrial Sector:  Electricity accounts for about 25 percent of Nigeria’s total commercial fuels. Inadequate supply therefore leads to low industrial capacity utilization and slow pace of industrialization[15].

Agricultural Sector:Nigeria is an agrarian country with the agricultural sector being pivotal to the country’s economy up until the 1970’s. Most of the foods consumed by the populace are produced by farmers who predominantly live in rural areas without access to electricity and therefore have to rely on manual techniques and hand cultivation in planting and harvesting. This has adverse effects on the growth of mechanized farming in the country and consequently affects the agricultural potentials of the country.

Commercial Sector: Poor and irregular access to electricity in Nigeria has resulted in most firms resorting to private generation of electricity most times at costs of more than three times the cost of publicly supplied electricity. In a 1998 survey conducted on the impact of electricity shortages on the Nigerian economy, it was found that most businesses spend as much as 20 to 30 percent of their initial investment on acquisition of facilities to enhance reliable electricity supply[16]. This has negative impact on the cost competitiveness of businesses in the country even as it is estimated that over 0.5 billion Naira was lost by businesses in 1998 due to poor electricity supply in the country[17].

Residential:residential consumption of electricity accounts for more than 52 percent of electricity consumption in the country[18]. Poor and unreliable access to electricity result in a high percentage of households relying on wood, inefficient stoves and other biomass sources for cooking, heating and lighting, with its attendant health and global environment implications.



As discussed above, the problem of access to electricity is particularly severe in rural areas in Nigeria, therefore any genuine attempt at improving access to electricity must include an intensive rural electrification program which would aim at extending grid network electrification to the rural areas as well as providing for off-grid electrification of the rural areas by means of alternative electricity generation. Such electricity supply must not only be accessible, but also significantly affordable by the poor because advancement of grid to rural areas does not automatically lead to better access to electricity for the poor. It is not proximity to the power line but cost of electricity that constitutes the main factor excluding poor people from grid connection[19]. World Bank evaluation study in 1995 indicated that between 25% and 50% of the population of electrified villages in Africa cannot afford grid connection.[20]

One of such alternatives for electricity generation in rural areas is the use of Small Hydro Plants (SHP). UNIDO, 2010 states that

Small hydro power is cost effective, inexpensive and easy to operate. In the developing world and in less developed countries in particular, there is a huge potential to meet growing rural energy needs with the use of small hydro power”.[21]

SHPs are smaller versions of the conventional hydro power plants, capable of being installed in villages and other rural communities with hydro-power potential, for electricity generation at significantly lower costs and on a lower scale. It is a viable form of satisfying low to medium voltage electric needs such as lighting, telecommunication and providing motive power for small industries. It is particularly suited for rural areas where there is relatively lower electricity demand and consumption owing to the absence of large industries or other electricity intensive users. It has been successfully implemented by UNIDO in several developing nations such as India, Maldives, Sri-Lanka, Indonesia, Tanzania, Kenya and Uganda with appreciable degree of success. China is a classic example of the success story of SHP, as it currently operates 42, 221 SHP plants with a total installed capacity of 28.489 MW and supplying electricity to more than 300 million people in the country[22].

SHPs generally generate a maximum of 30 MW of electricity and can be further classified into-

The Pico, Micro and Mini hydro are personalized hydro plants for individual homes or families and generate far less electricity than SHP which is basically suited for community purposes. The basic advantage of SHP scheme is that it has a lesser environmental impact than the conventional large hydro plants and can provide a range of valuable energy services especially in rural areas where it is the most cost-effective opportunity to energize on-grid and off-grid areas.


Figure 2: Sample of a Small Hydro Power plant


 Source: UNIDO 2010

Nigeria has huge potentials for the implementation of the SHP scheme for rural electrification. It is located within the Niger River basin which is the third largest river basin in Africa after the Nile and Congo River basins, with over 80 million of its population living within the basin. The Niger River basin holds huge hydro potentials for communities and villages within the basin with strong seasonal flows in most of the watercourses within the basin. Nigeria is also blessed with a vast expanse of inland freshwater and brackish ecosystems. FAO 2010[23] indicate that Nigeria has 8 major and over 20 minor rivers, estimated at about 10,812,400 hectares, making up about 11.5% of the total surface area of Nigeria. Also the country has over 11 fresh watercourses and 4 deltas and estuaries.[24] All these water bodies pass through several villages and rural communities where they be harnessed for SHP electrification of the host communities.

According to recent statistics from the Energy Commission of Nigeria (ECN) (2007), Nigeria has reserves of 3, 500 MW of SHP potential[25]with several villages and rural communities having abundant hydro potentials which can be harnessed for SHP purposes. ECN 2007 statistics also reveal that the country has the potential to produce 30 MW (2.6 million MWh/day) for the next 30 years.

Already, UNIDO has begun the implementation of the SHP scheme in some rural communities in the country with appreciable degree of success[26]. These SHP schemes include –

i.    Installation of SHPs in several communities in Enugu State with a generating capacity of over 30 KW of electricity to power community Development Centers for internet connectivity and income generating activities.

ii.   Installation of SHPs in several communities in Bauchi state with a generating capacity of 75KW of electricity for productive applications including information and communication technology and internet connectivity.

iii.  Waya Dam SHP scheme with a generating capacity of over 75KW of electricity for the surrounding rural communities.

iv.  Installation of SHP schemes in Taraba state[27]with a generating capacity of 200 KW of electricity to power several villages and communities in the state.

These projects commissioned by UNIDO under its “Lighting Africa” project, are at various stages of construction while the Enugu and Bauchi schemes which have been completed are awaiting evaluation by UNIDO before becoming operational. However, for these SHP programs to succeed at a national scale, government priorities and electricity market regulations ought to be in favor of SHP based alternatives. The Nigerian government has already indicated its intention to promote SHP schemes for rural electrification by incorporating it into the National Energy Policy, 2003[28] and setting a target of 19000 MW of electricity generation from SHP over the next decade.

From available statistics, there is no doubt that Nigeria has enormous hydro power potential to achieve substantial rural electrification through SHP schemes. Nevertheless, there are vital issues that must be addressed if SHP schemes are to be economically viable in the country.

  1. Economic viability of SHP will largely depend on the combined presence of constant water resources throughout the year and steep hillside along the water courses in the communities, as low head SHP schemes tend to be too costly. Therefore, this factor must be taken into account when situating SHPs in rural communities. In communities where the water courses are subjected to strong seasonal variations and competing uses of the water for irrigation,[29] hybrid solutions can be employed by providing for solar and biomass gas electrification for such communities in dry season where there is low water supply for the SHP.
  2. Also, it is vital that the SHP sites are located within close proximity from the village or point of production in order to avoid the prohibitive electricity transmission costs which will affect the economic viability of the scheme. SHP electricity will only be attractive for rural electrification where it is cheaper and at least of the same quality as grid electricity.

The costs of installation of SHPs are relatively low with an investment cost of between US $1000 - $5000 per KW for each SHP installed, compared to other alternative electricity generation sources such as Solar PV ($4500-$7500/KW), solar thermal ($3000-$6000/Kw) and Bioelectricity ($4000/KW)[30]. However, installation of SHPs is more expensive than large hydropower plants ($1000-$2000/Kw) because of the economies of scale involved which favors hydro power plants.


The use of “Energy Kiosks” for transmission and distribution of electricity

The transmission and distribution of electricity for rural electrification is just as important, if not more important, as the generation of the electricity as its cost implications are more significant than generation costs. The cost of rural electricity distribution and transmission is high because of low population density in rural areas. Therefore, every rural electrification scheme must include the development of a viable and low-cost distribution system as an integral part of the scheme. The utilization of the innovative, low cost “Energy Kiosks” system developed under the UNIDO SHP program in Kenya[31] may prove the panacea to this problem.

‘Energy kiosk’ is a system that reduces distribution costs of electricity by distributing electricity for lighting and other household purposes through rechargeable batteries instead of a grid. It is a low cost option for electricity distribution, in particular for poor households. It is a “stand alone” facility that depends only on locally available resources such as micro-hydro, solar, wind and organic wastes. Energy Kiosks can be run either privately or collectively. It utilizes rechargeable lamps and other battery charging techniques for distribution of electricity to households rather than the conventional method of wiring of houses and connection to power grids. The UNIDO structure of an energy kiosk is depicted in the chart below:


Figure 3.  UNIDO Structure of an Energy Kiosk 


In Nigeria, the power source for the Energy kiosk could be a Pico/Micro Hydro Power (10-30 KW), solar photovoltaic (2-5 KW) system, a wind electric generator (5 KW) and biomass. As already stated, the Micro Hydro Power is the cost effective option and should thus, be utilized. The Power Control Centre (PCC) is the facility where the generated power is stored, converted and distributed. It includes storage batteries banks, inverters, control units and energy meters. The common utility set up refers to the application of the energy kiosk. The energy kiosk makes it possible to have Light Emitting Diodes (LED) recharging of lamps, phones and car batteries. Household could have better lighting through the use of LED lamps which have zero carbon emission, in place of polluting kerosene lamps that have severe health consequences particularly for women and children. Also, the Kiosk system would promote small agro-processing industries that add value to rural agricultural produce like milling, processing, preservation of milk and fruits and other services that increase the shelf life of farm produce. This is a very important benefit as more than 80 percent of rural dwellers in Nigerian are engaged in agro-related jobs and businesses. Other advantages include its fast and easy installation, the empowerment of the local community in managing its own energy resource and the fact that power supply is demand driven rather than supply or technologically driven while the power output can be increased modularly. 

This system will prove particularly helpful for rural electrification in Nigeria as lack of access to power grids and high poverty rate are the major factors responsible for the high rate of non-access to electricity in rural areas of Nigeria. The ‘Energy Kiosk’ system addresses both problems by obviating the need for integrated power grids while providing a low-cost option for distribution of electricity thus making it affordable by poor households. Vietnam government’s rural electrification program increased access to electricity of rural households in from 51 percent in 1996 to 95 percent at the end of 2008[32]. Care must however be taken to avoid the establishment of an “anti-poor” pattern of rural electrification where the larger share of the benefits from rural electrification will be captured by the non-poor in the rural communities.[33]


Figure 4.  Solar Kiosk at Night: “An Autonomous Business Unit” in Lake Lagano area in Ethiopia





Despite the abundant energy resources of the country, access to sustainable electricity among the population is still very low; with the rural areas being the hardest hit as less than 30 percent of rural households have access to electricity, while over 80 percent of urban households have access to electricity. The two factors responsible for this dichotomy are the concentration of grid networks in the urban area and the high poverty rate in the rural area.

The study finds that the use of SHP schemes for electricity generation and “Energy Kiosk” systems for transmission and distribution of electricity has the potential to significantly improve access to electricity situation in rural areas in Nigeria as the rural communities have abundant hydropower potentials which when harnessed for electricity generation by means of SHPs can provide adequate electricity generation to satisfy the low to medium voltage electric needs of the rural communities particularly in view of their low-electricity intensity requirements.



[1] IEA, 2010, World Energy Outlook 2010, International Energy Agency, Paris

[2] World Bank 2010,Africa Development Indicators2010, (available at http://esds80.mcc.ac.uk/wds_wb/TableViewer/dimView.aspx)

[3] UNIDO Evaluation Group, Independent Thematic Review: UNIDO projects for the promotion of small hydro power for productive use, Vienna 2010, pg. 31, (available at www.unido.org/ruralenergy)

[4] World Bank estimates 2010 based on United nations World Urbanization Prospects, supra note 3

[5] World Bank 2010, Africa development Indicators, supra note 3

[6] NBS/CBN/NCC, Social-Economic Survey of Nigeria, Abuja, 2008, (available at www.energy.gov.ng)

[7] Ibid

[8] WEC 2010, supra note 7

[9] UNIDO 2010, supra note 4

[10] Adenikinju, A., Electric infrastructure failures in Nigeria: a survey based analysis of the costs and adjustments responses,  Energy Policy Journal, Vol. 31, Issue 14, November 2003, pp. 1519-1530

[11] Federal Government of Nigeria, Report of the Vision 20:2020 National Technical Working Group on Energy Sector, Abuja, July 2009, (available at www.npc.gov.ng/vault/Abridged_Version_of_Vision2020.pdf

[12] National Electricity Regulatory Commission (NERC) statistics, 2011 (available at www.nerc.gov.ng/statistics/pdf)

[13] Energy Commission of Nigeria statistics 2011,  (available at http://www.energy.gov.ng/index)

[14] These figures dropped to 88.8 percent and 78 percent respectively in 2008

[15] National Energy Policy of Nigeria, 2003, (available at www.energy.gov.ng/energypolicy2003)

[16] Adenikinju, A., supra note 15 at page 1525

[17] Adenikinju, A., Supra note 15 at page 1526

[18] Ibid

[19] UNIDO 2010, Supra, note 4

[20] World Bank, 1995, ‘Rural Electrification: a hard look at costs and benefits’, World Bank OED, 1995, (available at www.worldbank.org/ruralelectrification)

[21] UNIDO 2010, supra note 4

[22] Ibid

[23] FAO statistics 2010, (available at http://www.fao.org/DOCREP/005/T1230E/T1230E02.htm)

[24] Ibid

[25] Draft National Energy Master Plan, Energy Commission of Nigeria, June 2007, (available at http://www.energy.gov.ng/)

[26] UNIDO and Renewable Energy; “Greening the Industrial Agenda” Vienna 2009, pg. 31, (available at www.unido.org/ruralenergy)

[27] Which has the highest percentage of households without access to electricity in the country

[28] National Energy Policy of Nigeria, 2003, supra note 27

[29] Which is the case in most rural communities in the country

[30] UNIDO 2010, supra note 4 at page 3; The SHPs in the Nigerian communities were installed free by UNIDO in what it termed ‘hidden subsidies’

[31] Ibid

[32] World Bank, ‘Vietnam: Reliable electricity in rural Vietnam’, July 2009, (available at www.worldbank.org/vn )

[33] UNIDO 2010, supra note 4 at page 8



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