Financial Energy Review
The Rural Electrification Agency (REA) says it has signed 267 agreements worth about $395 million to provide electricity to unserved and underserved Nigerians under the Nigeria Electrification Projects (NEPs).
The Managing Director, REA, Salihijo Ahmad, told journalists in Abuja that the NEP Nigeria is currently funded by a $350 million World Bank loan and $200 million African Development Bank (AfDB) loan to provide electricity to Nigerian communities.
He said that about $64.8 million of the commitments have been disbursed to private sector partners for the execution of the projects.
According to him, the programme is expected to provide off-grid reliable and clean electricity supply to 705,000 households, 90,000 micro, small and medium enterprises (MSMEs).
It will also provide 100 isolation and treatment centres and 400 primary healthcare centres in unserved and underserved areas of the country.
To achieve this, a lot of funding is required and what we are used to doing is that every year we wait and get government’s money from the budget, go to the site and then implement the projects.
Ahmad said over the years, REA has moved from being just an implementer of Federal Government projects in the sector to a hub and an enabler of business in the sector, adding that the agreements signed with private developers led to over a million connections across the country.
“The REA has the mandate of taking power to unserved and underserved Nigerians. How it goes about doing this depends on where the funding comes from.
“According to the rural electrification strategy plan, we have targets to reach Nigerians everywhere in the country and the numbers at the moment, are being quoted to be as high as 80 million people,” he said.
“To achieve this, a lot of funding is required and what we are used to doing is that every year we wait and get government’s money from the budget, go to the site and then implement the projects.
“However, if you are to do this for the next 100 years, you will not be able to meet those targets hence it became important for the Agency to ensure that its mandate does not end at implementation,” he said.
Ahmad continued: “Now government money is used as an enabler to attract private investment. For instance, for the Rural Electrification Fund; if you have a capital subsidy where a project costs N100 million, that subsidy will come in, maybe at 50-60%.
“The private developer will come up with the rest of the money to deliver the service to the community and go into an agreement with the community for the rest of the money,” he explained.
The Head, Programme Management Unit, NEP, Ms Anita Otubu, explained that the programme had five components.
These include the solar hybrid mini-grid worth $213 million; standalone solar home systems $75 million; energising education programme $250 million; energy efficient equipment and productive use of appliances $20 million; and technical assistance at $37 million.
She said that so far, 67 mini-grids have been completed with 995,396 solar home systems deployed, adding that with this, about 1,151 jobs were created. (NAN)
