The Federal Government has, said unless the private sector invests about $3.5 billion yearly, raising electricity generation capacity to 30, 000 megawatts in the next seven years would remain a mirage.
This brings Nigeria’s investment need to at least a cumulative $24.5 billion if the aspiration of raising electricity capacity to 30,000 before 2030 will be realistic.
Minister of Power, Aliyu Abubakar, who spoke at the ‘Solar Power Naija Programme Investor Matchmaking Event’ organised by the Rural Electrification Agency (REA) in Abuja, linked the industrial revolution of the country to the power sector, adding: “Federal Ministry of Power is at the centre of undertaking critical actions that would transform the industry from public to a private sector-driven.”
While Nigeria privatised the electricity sector in 2013, hoping to turn around the despondent state of the sector and bring to reality the year-long aspiration for reliable and stable electricity supply, the initial optimism remains elusive as the country’s actual generation remains around 4,000MW.
Represented at the event by the Director, Investments and Power Sector Development, Ministry of Power, Eyo Babalola, the minister said FG has put in place the electricity power sector reform (EPSR) Act and recently signed into law the bill empowering the state government to generate, transmit and distribute electricity to boost investment.
Abubakar insisted that the investment opportunities in the Nigerian power sector are endless. Managing Director of REA, Ahmad Salihijo, noted that budgetary allocation would not bridge the gap in rural electrification in the country, stressing that concerted efforts were needed to attract the private sector to the space.
Salihijo said the Solar Power Naija team, with support from the REA, has been working to increase access to financing for developers in the solar power space, holding discussions with potential investors and guarantors interested in investing.
According to him, the engagements and discussions have yielded significant progress, adding that the investor matchmaking would fast-track funding options and scale up electricity access to unserved and underserved communities in the country.
The Solar Power Naija Programme was launched as part of the Economic Sustainability Plan (ESP) to achieve the roll-out of five million new solar connections in off-grid communities.
The programme is expected to generate an additional N7 billion increase in tax revenues yearly and $10 million in yearly import substitution. With the programme, the Federal Government is expected to expand energy access to 25 million individuals, increase local content in the off-grid solar value chain and facilitate the growth of the local manufacturing and assembly industry and Incentivize the creation of 250,000 new jobs in the energy sector.
The Head of the Programme, Barbara Izilein, revealed that the initiative started with the Federal Government creating access to N140 billion from the excess cash reserves of commercial banks at single digit interest facility for Solar Developers.
According to her, the process required the commercial banks to go through a pre-qualification and evaluation process to ensure that companies met their credit requirements.
Izilein disclosed that the programme has been expanded bringing onboard other potential investors interested in making significant investments in the solar space.