Grid and off-grid distributed energy developer PowerGen is partnering with CrossBoundary Energy Access (CBEA), Oikocredit, Triodos Investment Management, and EDFI ElectriFI to electrify the homes of 55 000 people in rural Nigeria.
The project is supported by grant funding from the World Bank and the Nigeria Rural Electrification Agency’s Nigeria Electrification Project, which provides a fixed grant for each customer connected.
The electricity will be provided by 28 distributed renewable energy systems, designed as solar photovoltaic and battery-powered minigrids.
Oikocredit, Triodos Investment Management, and EDFI ElectriFI are acting as the construction financiers for the transaction, providing $9-million in financing for the construction phase of the project.
Once operational, CBEA will buy the portfolio, becoming the long-term owner of the systems and providing the construction financiers with an exit.
PowerGen says this showcases how innovative financing structures can bring private capital into the sector.
PowerGen will build the systems and continue to act as the long-term operator of the project after the transfer to CBEA. The project will serve a base of residential, commercial and productive use customers.
PowerGen has already commissioned six sites, including the pilot site, Rokoto. The financing will be used to develop and build the remaining sites in the portfolio.
Nigeria is Africa’s largest economy, but 85-million Nigerians do not have access to grid electricity, according to the 2020 World Bank Doing Business report.
This lack of reliable power is a significant constraint for citizens and businesses, resulting in yearly economic losses of about $26.2-billion, which is equivalent to about 2% of gross domestic product.
Many businesses and households have turned to fossil-fuelled alternatives like diesel generators and kerosene resulting in poor air quality, higher greenhouse-gas emissions and noise pollution.