PRACTICAL ACTIONS FOR ACCELERATING OFFGRID POWER Houssam Azem

PRACTICAL ACTIONS FOR ACCELERATING OFFGRID POWER Houssam Azem – CEO, Lumos Nigeria Confidential

We are producing and distributing far less than we need • 75% of all generated output in Nigeria doesn’t reach the intended end users. • While the minimum capacity requirements for Nigeria is put at ~50, 000 Mw, we are currently producing less than 4, 000 Mw • The Vanguard newspaper opines that ~75% of Nigerians lack access to regular power Source: Nesistats Confidential https: //www. africa-eu-renewables. org/market-information/nigeria/energy-sector/

… resulting in 85% of Nigerians having to provide their own power Source: NOI Polls Confidential

…with significant impact on their disposable income and running costs • According to the World Bank, 75 m out of Nigeria’s 194* million population lacks access to electricity • ~85% of Micro SMEs rely on power generators for electricity • ~61% of SMEs rely on generators • On average, micro SMEs spend N 500 - N 1, 000 per day on fueling generators translating to between N 12, 500 and N 30, 000/Month on fuel • 60 m Nigerians own generators with an estimated annual spend of N 3. 5 tn! • Another ~15 m do not have an alternative to the national grid (where it exists) • With a basic Solar Home System as we provide through the Lumos Yéllo Box, affordable, reliable electricity is indeed within reach for Nigerians. Sources: ODI and NOI Polls, Nigeria Independent, The Nation, *NPC April 2018. Confidential

…requiring solutions Like LUMOS to drive growth and improve quality of life SMALL BUSINESSES Confidential

…while providing cost saving opportunities to stimulate MSME and SME growth • Small Medium Enterprises Development Agency of Nigeria (SMEDAN) identifies some of the basic needs of Micro SMEs, and perhaps core barriers to sustainable growth to include: Access to finance; seed capital, operating expenditure and infrastructure (particularly power and water). • While we in the off-grid space cannot claim to have all the solutions, we can indeed impact two of those variables positively. These are provision of power, and in doing so, drive cost savings for MSMEs Providing reliable, affordable electricity Confidential • Increases efficiencies • Reduces operating costs compared to spending on fueling and servicing generators • No noise, no fumes • Clean, green Monies saved converting from generators to a SHS can then be ploughed into increasing operating income and possibly profits

…accelerating off-grid power not only provides electricity… it saves you money! Micro SME Assuming each SME powers a combination of: MONTHLY SPEND Confidential • • Plastic blade fan Up to 4 DC light bulbs Up to 5 clippers (for barber) A laptop Charge mobile phones Power POS terminals Power up to 42 inch LED TV Cable TV decoder

…Nigeria is moving in the right direction to accelerate off-grid solutions • Providing sustainable electricity in Nigeria requires a flexible energy-mix based on our natural resources. • • Hydropower Carbon Fuels Solar Electricity Wind turbines • Our energy-mix is changing slowly with the entry of renewable energy solutions fueling off-grid generation and distribution. Confidential Nigeria’s Traditional Energy Mix

. . a direction requiring an enabling environment to support growth • The right policy environment to drive private-investment in off grid power solutions • Simple payment methods and payment solutions – in our case, through mobile phone airtime (inclusion). • Education and re-education. We are used to powering anything and everything at once, even when they are not relevant in the moment; we can actually do more with less. • An integrated credit rating system will ensure providers can avail services on a lease to own model (for affordability) without the risk of revenue loss. • Favourable importation tariffs on Solar Panels and SHS components. Favourable tariffs ensures we can transfer savings to consumers and keep products and services affordable. Confidential

THANK YOU! Houssam Azem – CEO, Lumos Nigeria Confidential 0800 -444 -0 -444