Home Electricity FG to use $550 million loan to electrify rural communities

FG to use $550 million loan to electrify rural communities


As part of the moves to improve electricity in Nigeria, the Federal Government, has said $550 million loan borrowed from World Bank and African Development Bank (AfDB) is currently being spent to electrify rural communities across Nigeria.

The fund, targeting unserved and underserved communities, comes under the Nigeria Electrification projects (NEP) and implemented by the Rural Electrification Agency (REA).

About 267 agreements totaling $395 million have already been assigned for renewable electricity deployment, REA said in a media parley in Abuja while adding that $350 million of the loan came from the World Bank while $200 million loan came from AfDB.

The agency, in a briefing, noted that $64.8 million of the commitments have been disbursed to private sector partners for the execution of the projects.

The plan would provide off-grid reliable and clean electricity supply to 705,000 households, 90,000 micro, small and medium enterprises, 100 isolation and treatment centres and 400 primary healthcare centres in unserved and underserved areas of the country, Managing Director of REA, Ahmad Salihijo Ahmad, said.

Ahmad said: “Now government money is used as an enabler to attract private investment. For instance, for the rural electrification fund, you have a capital subsidy where if a project costs N100 million, that subsidy will come in at may be 50-60 per cent and the private developer will come up with the rest of the money, deliver the service to the community and go into an agreement with the community for the rest of the money.

“What we are used to doing is, 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 end at implementation.”

He explained that with the Rural Electrification Fund, which is a private sector driven initiative, REA became a hub and enabler to ensure that funding comes from different areas to enable it to deliver on its mandate.

Head of the Project Management Unit at the Nigeria Electrification Project, Anita Otubu explained that the Nigeria Electrification Project have five components including solar hybrid mini-grid ($213m), standalone solar home systems ($75m), energizing education programme ($250m), energy efficient equipment and productive use of appliances ($20m) and Technical assistance ($37m).

She said 67 mini-grids have been completed with 995,396 solar home systems deployed and 1,151 jobs created.


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