As the country battles incessant grid collapses, the Federal Government is in talks with both local and foreign financial institutions to secure $1.1bn for the construction of renewable mini-power grids.
The Managing Director/Chief Executive Officer of the Rural Electrification Agency, Abba Aliyu, disclosed this during the just-concluded Mission 300 Africa Energy Summit in Dar es Salaam, Tanzania.
According to him, the REA signed a Memorandum of Understanding with the International Finance Corporation and five renewable energy service companies – Havenhill Synergy Ltd, Prado Power Ltd, PriVida Power Ltd, Sosai Renewable Energies Ltd, and Virtuitis Solaris Ltd.
The idea, he said, was to expand mini-grid projects in Nigeria, as part of the World Bank Group’s Nigeria Distributed Access through Renewable Energy Scale-up project.
Aliyu noted that the initiative, which aims to provide electricity access to 400,000 Nigerians, is a crucial step toward achieving the REA’s mandate of expanding sustainable energy access, particularly in rural and remote areas of Nigeria.
He disclosed that the International Finance Corporation has committed $200m to the project, while the First City Monument Bank has provided $100m.
The funds were in addition to the $750m grant from the World Bank.
The REA boss maintained that the private sector funding requirement under the DARES project is $1.1bn, expressing confidence that the country would achieve the target.
He said the REA is still in talks with Standard Bank and Stanbic IBTC for funds, adding that 65 mini-grids are set to be inaugurated under the DARES programme.
“It was a very long negotiation (with IFC). It was like a one-year negotiation with IFC to the level that we started joking about IFC, and whether they would bring the funds. But just last year, the MD of IFC came, and we had a round-table and he assured us that the money would be provided, and we are here.
“I want to tell you that, at this moment, we have 65 new mini-grids ready to be commissioned on the DARES project. So, already, we are really moving ahead.
“The requirement for the private sector on DARES is $1.1bn, based on the $750m that we have. The International Finance Corporation provided us with $200m. Even the local financial institutions are providing us with funding. First City Monument Bank in Nigeria provided us with $100m, and we are in discussion with Standard Bank and Stanbic IBTC as well. We would definitely deliver on that target of $1.1bn private sector funding for this project,” Aliyu stated.
On his part, the Minister of Power, Adebayo Adelabu, said no single entity can solve Nigeria’s power challenges.
According to him, the fund required to achieve universal access in Nigeria by 2030 is over $30bn.
“The government alone cannot make this available. It requires cooperation and collaboration with the private sector, both locally and internationally. It’s a combination of the public and the private funds, both equity and debt, that can take us to our destination.
“So, I would like to thank the management of IFC for what they have done, and I want to appeal to you not to relent. Like I said earlier, the reward for hard work is more work, and the power sector is Oliver Twist. We always ask for more,” Adelabu said.
