Nigeria yesterday paid out N1, 952,583,434 out of an about N2 billion that has accumulated into its Rural Electrification Fund (REF) to 12 mini grid power developers and 14 solar home systems (SHS) developers, to enable them develop and deploy 12 mini grid and 19,130 SHS projects across rural homes and businesses.
The winning bidders selected in the first call for funding of rural electricity projects under the REF, were awarded their grant documents at a ceremony supervised by the Managing Director of the Rural Electrification Agency (REA), Mrs. Damilola Ogunbiyi, in Abuja.
Ogunbiyi, however explained that the disbursement came after about 10 years of the REA trying to disburse same unsuccessfully because the framework for its disbursement were not in place until recently.
She explained the REA would fund nominated projects of the awardees to the tune of 25 and 30 per cents within the REF, adding that a funds’ manager was appointed by it to manage the REF and its disbursements with the intention to make the processes accountable.
“One of the rules set out by the government was to make sure we have a trust fund manager that is dependent of the REA and also independent of the grantees to be able to look at what we are doing, monitor it and give us the check and balances we need,” Ogunbiyi said in her remarks at the ceremony.
According to her: “It is very important because while we are using public funds, we must make sure we use public funds well and in a sustainable manner. This is one of the many grant-enabled projects that we have to have to make sure that our underserved areas and unconnected people have power. It has taken us 20 months which makes a lot of difference from the 10 years we had waited.”
According to the REA, the REF which is backed by Section 91 of the Electric Power Sector Reform Act (EPSRA) 2005, and implemented by the REA is funded by the federal government through budgetary allocations and surplus funds from the operations of the Nigerian Electricity Regulatory Commission (NERC). International donors equally contribute to the REF.
Following the passage of the Rural Electrification Strategy and Implementation Plan (RESIP) in 2017, which seeks to expand access to electricity as rapidly as possible in a cost-effective manner using both grid and off-grid approaches, with subsidies being primarily focused on expanding access rather than consumption, the REF became operational and REA called out for investors and operators to apply for consideration in the first tranche of the disbursement window.
Disbursement of REF
The REA in a fact sheet for the REF stated that N995, 667,434 was disbursed to 14 indigenous SHS contractors to install 19,130 units of SHS, while N956, 916,000 was disbursed to 12 indigenous mini grids for the development of 12 mini grid projects.
The projects according to the REA are expected to power 43,000 households and businesses, and reduce carbon emission by over 5,000 metric tonnes.
Beneficiaries of the fund are however expected to deploy the projects within one year, with the projects expected to accelerate economic and human capacity development in rural communities.