The African Development Bank’s (AfDB’s) board of directors has approved a $150-million sovereign loan to the Nigerian government to finance the Nigeria Electrification Project (NEP).
The financing will support rural electrification efforts in Nigeria by facilitating private sector development and the roll out of offgrid solutions, as well as the installation of dedicated power systems for federal universities.
The Africa Growing Together Fund (AGTF) has also approved a $50-million loan to the Nigerian government to co-finance the NEP.
The joint financing from AfDB and AGTF will support the Nigerian government’s efforts to deal with a critical energy access deficit in the country and catalyse achievement of universal energy access by 2030.
The NEP, which will be implemented by the Rural Electrification Agency (REA), presents an innovative approach to address the energy access deficit by channeling private sector investments into commercially viable minigrid and offgrid solutions, the AfDB said in a statement on Monday.
AfDB VP for power, energy, climate change and green growth Amadou Hott welcomed the board’s approval of the NEP, stating that it underscores the importance of projects that leverage private sector investment into energy access solutions.
“Given the limited amount of public financing available, projects that catalyse private sector investment are critical in enabling the bank and its regional member countries to meet their shared objective of electrifying the continent within the next decade.”
AfDB’s Nigeria country office director Ebrima Faal celebrated the approval in light of recent reforms undertaken by the Nigerian government to facilitate private sector development of the offgrid sector.
“Nigeria has already implemented one of the most comprehensive regulatory frameworks for offgrid development in Africa and has attracted preliminary interest from both large international companies and local firms. The NEP will provide the spark that is needed to convert private sector interest into action,” Faal said.
REA MD Damilola Ogunbiyi, meanwhile, noted that the REA is “extremely pleased with the AfDB’s decision to support the NEP. By supporting the electrification of unconnected and underserved communities, the 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. The NEP will also train and employ thousands of Nigerians with a particular focus on women and young people.”
The NEP will also create jobs and impact the Nigerian government’s broader education sector goals by increasing access to affordable electricity at federal universities through hybrid power plants that reduce heavy reliance on diesel generators.