The World Bank on Tuesday said it has made available a $350 million loan to Nigeria to develop off grid power projects in her rural communities.
Speaking at the ongoing Action Learning Event on Upscaling Mini Grids for Low-cost and Timely Access to Electricity in Abuja, the Banks’s Nigeria Country Director, Rachid Benmessaoud, said a lot of the $350 million loan would go to the private sector to support their works in the off grid power sector.
The Bank said this at the same time Nigeria’s federal government disclosed it would by 2020, generate up to 3,000 megawatts (MW) of electricity with about 10,000 community-based mini grid projects to electrify rural homes.
Represented by the World Bank Global Lead, Energy Access, Mr. Mac Cosgrove-Davies, Benmessaoud said: “With regards to the question on the loan, yes indeed this is a loan to government.”
“That said, the Rural Electrification Agency (REA) will be the implementing agency for the loan and much of the funds will actually be going to the private sector. A lot of the funds that go from the World Bank to the government will be provided to the private sector,” Benmessaoud stated.
He earlier said during the opening session of the conference that globally, more than one billion people lack access to electricity.
According to him: “Sub Saharan Africa is home to about 600 million of these. In Nigeria, 80 million people are without access and millions more suffer from poor service. REA expects mini grids to fill a substantial portion of that gap covering up to 8,000 villages nationwide.”
Speaking on how the $350 million loan would be used, the Managing Director (REA), Mrs. Damilola Ogunbiyi, said $100 million of the money would be spent on mini grid development.
She stated: “The total loan amount for the electrification programme is $350 million, of which $100 million of that is going to be dedicated to mini grid development. As for the total quantum of electricity being targeted with the 10,000 mini grids, we are trying to achieve 3,000 megawatts.
“Some sites could be 150 kilowatts, some others 20KW, etc, but 10,000 (mini grids) is just a guide because people always need figures when we need to drive something home. So, it could be less than that, but if we can achieve 3,000 megawatts on off-grid, which will be close to the power generated on-grid, we will be very happy.”
Ogunbiyi, also explained that the loan will be disbursed through the World Bank’s Nigeria Electrification Project (NEP) to be implemented by REA after its approval in April 2018.
She added that in Nigeria, businesses spend up to N40 billion every year to generate electricity that are expensive, but that the REA was working with the private sector to provide off grid power supply strategies for businesses in the country.
She explained that about N9 billion worth of profit could be earned from deployment of Solar Home Systems (SHS) and mini grid systems in Nigeria if private investors chose to put their monies there.