A feasibility study has begun into the potential for cooperatives as a business model in electricity provision in Ethiopia and Nigeria. The African Development Bank (AfDB)-managed South-South Cooperation Trust Fund is funding the study, which is being carried out by the United States’ industry association, the National Rural Electric Cooperative Association International (NRECA International). It is scheduled to be completed in May this year and will inform plans to pilot the model in the two countries.
Electricity cooperatives are described by the AfDB as tax-exempt businesses set up and owned by the consumers who benefit from the services. Cooperatives have been used in many parts of the world, particularly for last mile connections in rural areas. NRECA represents more than 900 cooperatives in the US alone. The association will look at the regulatory, legal, technical and socio-economic environment for cooperatives in both countries.
“We selected Nigeria and Ethiopia following dialogue with their respective energy ministers during the AfDB’s Africa Energy Market Place held in July 2018, where they expressed their governments’ commitment to improve rural access through established models”, said AfDB director of power systems development Batchi Baldeh. NRECA International was awarded the contract following a tender launched late in 2018.
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