Nigeria’s plan to improve electricity supply to her rural communities through the Nigeria Electrification Project (NEP) managed by the Rural Electrification Agency (REA) has gained a fresh funding support worth $150 million from the African Development Bank (AfDB).
OGN gathered from the AfDB that its board of directors has approved a $150 million sovereign loan to the federal government of Nigeria to finance the NEP.
The new financing, it was learnt will support rural electrification efforts in Nigeria by facilitating private sector development and rollout of off grid solutions, as well as the installation of dedicated power systems for federal universities.
The AfDB, equally disclosed that Africa Growing Together Fund (AGTF), a $2 billion facility sponsored by the People’s Bank of China and administered by it, has also approved a $50 million loan to the government of Nigeria to co-finance the NEP.
According to it, the joint financing from the Bank and AGTF will support Nigeria’s efforts to address her critical energy access deficit, and catalyze achievement of universal energy access by 2030 targets.
It added that the NEP, implemented by the REA, presents an innovative approach to addressing the energy access deficit of Nigeria by channelling private sector investments into commercially viable mini grid and off grid solutions.
AfDB’s Vice President for Power, Energy, Climate Change and Green Growth, Amadou Hott, reportedly welcomed the board’s approval of NEP, underscoring the importance of projects that leverage private sector investment into energy access solutions.
Hott, was quoted to have said about this that: “Given the limited amount of public financing available, projects that catalyze private sector investment are critical in enabling the Bank and its Regional Member Countries meet their shared objective of electrifying the continent within the next decade.”
The NEP, according to the AfDB, is aligned with its New Deal on Energy for Africa, the High 5 priorities, as well as its Climate Change Action Plan.
It said the project is further aligned with the government of Nigeria’s Rural Electrification Strategy and Implementation Plan (RESIP), and the Power Sector Recovery Programme whose objective is to increase private investments into the energy sector.
Accordingly, one of the key objectives of NEP is to de-risk and scale up private sector investment in the off-grid sector. AfDB, operating both within the framework of NEP and in the context of its other initiatives in the country’s energy sector, said it will work with public and private sector stakeholders to encourage the development of an ecosystem that is conducive to facilitating the rapid, effective and commercially viable electrification of Nigeria’s off grid communities.
Also at the board, the Bank’s Nigeria Country office Director, Ebrima Faal, celebrated the approval in the light of recent reforms undertaken by Nigeria to facilitate private sector development of the off grid sector.
Faal said: “Nigeria has already implemented one of the most comprehensive regulatory frameworks for off grid development in Africa and has attracted preliminary interest from both large international companies and local firms. NEP will provide the spark that is needed to convert private sector interest into action.”
Equally speaking after the board approval, the Managing Director of REA, Damilola Ogunbiyi, stated: “We are extremely pleased with the African Development Bank’s decision to support NEP. By supporting the electrification of unconnected and underserved communities, NEP will contribute materially to their economic development.”
“Access to reliable, affordable and clean electricity will result in savings for households and businesses, which can be deployed to other uses. NEP will also train and employ thousands of Nigerians with particular focus on women and young people,” Ogunbiyi, added.